How academia resembles a drug gang

This took me by surprise! Published in 2013 on LSE, I stumbled on this from a random discussion. It’s a long read and my paraphrase follows here. I hope you enjoy reading the original source.

Academic systems rely on the existence of a supply of “outsiders” ready to forgo wages and employment security in exchange for the prospect of uncertain security, prestige, freedom and reasonably high salaries that tenured positions entail.
Drawing on data from the US, Germany and the UK, Alexandre Afonso looks at how the academic job market is structured in many respects like a drug gang, with an expanding mass of outsiders and a shrinking core of insiders.
In 2000, economist Steven Levitt and sociologist Sudhir Venkatesh published an article in the Quarterly Journal of Economics about the internal wage structure of a Chicago drug gang.
The title of the chapter, “Why drug dealers still live with their moms”, was based on the finding that the income distribution within gangs was extremely skewed in favor of those at the top, while the rank-and-file street sellers earned even less than employees in legitimate low-skilled activities, let’s say at McDonald’s.
If you take into account the risk of being shot by rival gangs, ending up in jail or being beaten up by your own hierarchy, you might wonder why anybody would work for such a low wage and at such dreadful working conditions instead of seeking employment at McDonald’s.
The reason for this is that the prospect of future wealth, rather than current income and working conditions, is the main driver for people to stay in the business: low-level drug sellers forgo current income for (uncertain) future wealth.
With a constant supply of new low-level drug sellers entering the market and ready to be exploited, drug lords can become increasingly rich without redistributing their wealth towards the bottom.
There is an expanding mass of rank-and-file “outsiders” ready to forgo income for future wealth, and a small core of “insiders” securing incomes largely at the expense of the mass.
The academic job market is structured in many respects like a drug gang, with an expanding mass of outsiders and a shrinking core of insiders.
Academia is only one example of this trend, but it affects labour markets virtually everywhere.
Dualisation is the strengthening of this divide between insiders in secure, stable employment and outsiders in fixed-term, precarious employment.
Academic systems more or less everywhere rely at least to some extent on the existence of a supply of “outsiders” ready to forgo wages and employment security in exchange for the prospect of uncertain security, prestige, freedom and reasonably high salaries that tenured positions entail.
Figure 1 shows the proportion of PhD holders as a proportion of the corresponding age cohort in a number of OECD countries at two points in time, in 2000 and 2009.
As you can see, this share has increased by about 50% in 9 years, and this increase has been particularly pronounced in countries such as Portugal, Greece or Slovakia, where it nearly tripled, however from a low starting level.
Even in countries with an already high share, the increase has been substantial: 60% in the UK, or nearly 30% in Germany.
Since 2000 the number of OECD-area doctorates has increased at an average of 5% a year.
So what you have is an increasing number of PhD graduates arriving every year into the market hoping to secure a permanent position as a professor and enjoying freedom and – reasonably – high salaries, a bit like the rank-and-file drug dealer hoping to become a drug lord.
To achieve that, they are ready to forgo the income and security that they could have in other areas of employment by accepting insecure working conditions in the hope of securing jobs that are not expanding at the same rate.
Because of the increasing inflow of potential outsiders ready to accept this kind of working conditions, this allows insiders to outsource a number of their tasks onto them, especially teaching, in a context where there are increasing pressures for research and publishing.
In many countries, universities rely to an increasing extent on an “industrial reserve army” of academics working on casual contracts because of this system of incentives.
However, the boundary of the insider and outsider group varies across countries, for instance between the United States, Germany and Britain.
In the United States, numbers from the department of education reported in The Atlantic (Figure 2 below) show that more than 40% of teaching staff at universities are now part-time faculty without tenure, or adjunct lecturers paid per course given, with no health insurance or the kind of other things associated with a standard employment relationship.
This doesn’t mean that the absolute number of faculty has diminished, it has actually increased substantially, but it has been massively outpaced by the expansion of teaching staff with precarious jobs and on low incomes.
Germany is another case where there has traditionally been a strong insider-outsider divide, essentially because of the hourglass structure of the academic job market.
On the one hand, there are relatively good conditions at the bottom at the PhD level, and opportunities have expanded recently because of massive investments in research programs and doctoral schools generating a mass of new very competitive PhDs.