The moment Thomas Fullagar realized things were not going as expected came in April, six months into the job hunt. He applied for a position at CivicPlus, a tech company in Manhattan, Kansas. The role? Straightforward data analysis — a step below the complexity of the work he tackled during his Ph.D. at the University of California, Santa Barbara.
Despite the hometown advantage — he grew up there, and his mother even had a connection who fast tracked his application — he didn’t get a second interview. “It was in Manhattan, Kansas — who the heck is applying for this?” said Dr. Fullagar, 33. “That one was really baffling.”
From Prestige to Panic
For decades, a Ph.D. in economics opened doors to lucrative and prestigious jobs. Even as advanced degrees in history, English, or anthropology often led to dead ends, economists were in demand. Universities offered tenure track teaching roles, government agencies recruited economists in large numbers, and private sector employers like Wall Street and tech companies paid handsomely sometimes treating them like “a bespoke cryptocurrency.”
According to the American Economic Association, the average base salary for new economics professors at major research institutions was over $150,000 last year. Factoring in bonuses and summer pay, that number rose to $200,000. The association’s Committee on the Job Market, chaired by John Cawley, reported 100% employment within months of graduation in the 2023–24 academic year, with job satisfaction exceeding 85%.
But those “glory days seem to be ending.” Universities and nonprofits are cutting back hiring due to shrinking state budgets and reduced federal funding. The Trump administration has frozen government hiring and laid off economists.
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Tech Pullback and A.I. Uncertainty
Tech companies, once hungry for economists, have also slowed hiring. “The advent of A.I. is also impacting the market for high skilled labor,” noted Betsey Stevenson, a labor economist at the University of Michigan. “So the whole thing is kind of a mess.”
These changes are affecting more than just economists. Employment challenges are surfacing for scientists, social scientists, and recent college grads, whose jobless rate remains high despite a “strong economy.” Publicsector payrolls and funding reductions are serious concerns — “they support two to three times as many jobs for college graduates as for those without degrees.”
In a ripple effect, Ph.D. holders are pushing out those with master’s or bachelor’s degrees. Marcia McNutt, president of the National Academy of Sciences, warned: “When the top people go elsewhere, we’ll be left with the B team in America.”
Cracks in the Academic Pipeline
Even before Trump’s new policies, economists like Dr. Fullagar were worried. Though hiring rebounded in 2022 after a shaky pandemic stretch, by 2023, listings on the American Economic Association’s job board dropped 20%. Tech firms and universities were shifting into “austerity mode.”
Universities increasingly rely on non tenure track faculty, and retirements are delayed by aging baby boomers. At UC Santa Barbara, only about one third to one half of economics Ph.D.s secure tenure track jobs immediately. Dr. Daniel Martin, the graduate program’s job placement officer, said he began encouraging students to pursue summer internships and warned: “Industry jobs are not something that just come to you anymore — you have to aggressively pursue them.”
The warning was justified. At Harvard, labor economist Lawrence Katz said only three of his seven students seeking academic posts landed tenure track roles; the rest opted for private sector jobs or fellowships requiring a return to the job market in a year or two. Before the pandemic, Katz said, “all of those who wanted academic jobs would have gotten them.”
Competition Has Intensified
Victoria Wang, a recent UCLA Ph.D., observed that finalists for an assistant professor role at her school’s public policy department were already employed as assistant professors or were postdocs. “There was no one that was straight out of a Ph.D. program,” she said. Wang sent out 386 applications and eventually landed a tenure track position at Wellesley College.
At less elite institutions, things were worse. At the University of Illinois Chicago, two of six Ph.D.s landed state government jobs — less research focused and with “lower pay, less prestige,” according to economics professor Marcus Casey.
A Shrinking Path for Top Talent
Dr. Fullagar focused his search on government and private sector roles. Consulting firms traditionally offered Ph.D.s around $200,000 and heavily recruited from Santa Barbara. But in fall 2023, those firms interviewed fewer students. “That was the first indication,” he said. He got two nibbles from consultancies neither materialized.
Then, “in January, Mr. Trump took office and put the kibosh on federal hiring.” Hundreds of roles disappeared overnight, including more than a dozen Fullagar had applied to at the Treasury and Census Bureau.
“That was a brutal moment,” Dr. Martin admitted. He warned his department: “I need to prepare you for the possibility that we may be graduating people without jobs” — a scenario not seen in recent memory.
Postdocs, Rejections, and Moving Home
In March, Fullagar spotted a glimmer of hope. A West Virginia University economist advertised two postdoctoral roles and appeared desperate. “Any time someone says, ‘Email me,’ and it’s not an automated process, you’re more hopeful,” said Fullagar. But a generic rejection followed — too many applicants.
Dr. McNutt stressed the value of social scientists’ research in helping the government navigate critical issues, like national defense motivations or health policy adoption. In contrast, private sector research is narrower and less likely to be public.
L. Rafael Reif, former MIT president, added: “Industry generally does research to advance a road map. The research of universities creates new road maps, new avenues.” He emphasized the importance of academic economists analyzing A.I.’s societal impacts.
A Profession at the Crossroads
Dr. Martin still sees long term promise for economists, suggesting the downturn is relative. “Not even computer science has been able to place people just at will,” he said.
Still, he acknowledged the discomfort: “It’s not comfortable to be at end of boom.” He warned that the coming academic year — the first full one in Trump’s second term — could be “considerably worse.”
As for Fullagar, he’s trying to stay upbeat. In late July, he received an offer from a state government job he’s unsure about. He’s holding out hope for an interview at a well known tech firm. For now, he’s living in a subsidized Santa Barbara apartment.
“My lease ends in August,” he said. “If I have to move back home, then that will suck. But at this point, I’m not panicking.”
Source:
Original article from The New York Times (retrieved August 2025)
