What you should know BEFORE you start grad school in English Literature: The economic, financial, and opportunity costs
This post started life as an e-mail to a teacher who is thinking about going to grad school in English Literature. I expanded and cleaned it up slightly for the blog, but the substance remains the same.
Pleasure meeting you the other day. I’m too well-versed in the anti-grad school lit, but I’ll link to a few things here. If you haven’t read Thomas Benton’s articles, like “The Big Lie About the ‘Life of the Mind’” and “Graduate School in the Humanities: Just Don’t Go” in the Chronicle of Higher Education, you should do so now, before you go. Then read Louis Menand’s The Marketplace of Ideas, and pay special attention to the sections where he discusses supply and demand. I’m not saying you’re one of these people, but I get the sense that a lot of people spend more time deeply, critically thinking about and researching which restaurants to go to dinner than whether they should go to grad school, or what life afterwards is like. Menand’s basic point is simple: most people in English PhD programs are not going to be researchers and tenure-track professors at universities. 
You shouldn’t put too much stock in stories like “From Graduate School to Welfare: The Ph.D. Now Comes With Food Stamps,” but they are out there for a reason. Nonetheless, I bet many of the grad students it describes are now cursing themselves for starting grad school in the first place. If I didn’t have a second job working for a real business, I’d probably be close to qualifying for food stamps—and I wouldn’t have made it this far in grad school, because it’s almost impossible to live a reasonably normal life on $13,000 – $16,000 per year. I know grad students who don’t want to get a $7 sandwich at Paradise Bakery because it’ll blow their food budget for the month. They have to bring lunch to campus every day because they literally can’t afford not to. Tired in the morning? Tough luck. Make your bean-sprout sandwich or your lentil curry. It sucks if you need or want a book and can’t get it easily or expeditiously from the library and find yourself unable to buy it.
In addition, consider what you’ve got. You’re a teacher, so I’d guess you make ~$30,000 – $40,000 a year. Call it $35,000. If you spend five years getting a PhD, you’ll be giving up at least $100,000 ($35,000*5=175,000; $15,000*5=$75,000). And that’s not taking into account the raises you might get as a teacher or the benefits, which can be substantial (especially if you’re on a 30-year retirement track). If you take 10 years, like the median PhD student, you’ll be giving up $225,000, not counting benefits, which are certainly better as a teacher than they will ever be as a grad student. If you get a tenure-track job, you could make up that amount over the course of your lifetime. If you don’t get a tenure track job, you may wish you had a couple extra hundred thousand dollars. These are only loose numbers, but I’d guess that making them more precise by counting opportunity / investment costs would only weigh them more heavily to being a teacher, not less.
So who is grad school good for? Again, let’s follow the money, and I’ll use the University of Arizona as an example because that’s where I am. The out-of-state credit-hour fee for undergrads for Spring 2012 was $1,024. For in-state students it was $651. About a quarter of Arizona undergrads come from out-of-state. Grad students teach about 50 freshmen per semester, or about 100 per year. That’s $48,825 in in-state tuition collected, and $25,600 of out-of-state tuition—but each grad student teaches three credit hours. Triple those numbers. They’re $76,800 for out-of-state students and $146,000 for in-state students, for a total of $222,8000. Some of that money goes to pay profs who run grad seminars, to facilities, to various other administrative functions, and so on. (Grad students also get a couple of one-semester, one-class waivers), but the basic calculation shows why the university as a whole likes grad students. Most universities especially like ABDs, who don’t consume a lot of university resources. Menand says:
One pressure on universities to reduce radically the time to degree is simple humanitarianism. Lives are warped because of the length and uncertainty of the doctoral education process. Many people drop in and drop out and then drop in again; a large proportion of students never finish; and some people have to retool at relatively advanced ages. Put in less personal terms, there is a huge social inefficiency in taking people of high intelligence and devoting resources to training them in programs that half will never complete for jobs that most will not get. Unfortunately, there is an institutional efficiency, which is that graduate students constitute a cheap labor force. There are not even search costs involved in appointing a graduate student to teach. The system works well from the institutional point of view not when it is producing PhDs, but when it is producing ABDs [...] The longer students remain in graduate school, the more people are available to staff undergraduate classes. Of course, the overproduction of PhDs also creates a buyer’s advantage in the market for academic labor.
There’s little to no incentive for universities to try and speed up the grad school process. If anything, their incentive is to slow it down further.
Most people I know who aren’t in grad school and talk about going discuss the life of the mind, the transformative power of education, how they want to be a professor, their interest in teaching, and so forth. Most people I know who are in grad school talk about finances, economics, and the job market. Not all the time, to be sure, and I’ve had some lovely conversations about The Professor of Desire and Billy Collins and Heart of Darkness. But jobs and money are on almost everyone’s mind, especially as peers from high school or college are getting jobs at Google, or finishing their residencies, or getting promoted enough to discuss their “401(k),” which is a sure sign of aging, along with in-depth real estate analysis (remember back when we only talked about sex and art?).
Some people complain about being financially exploited by universities, but it’s hard to exploit highly educated people who have terrific reading and writing skills and who should know better, or at least do some cursory research before they spend as long as a decade getting a degree. The anti-grad school literature is vast—and highly accessible: type “Why shouldn’t I go to grad school?” into Google, and you’ll see what I mean.
People who aren’t in grad school, along with people who are professors and have jobs, also talk about wanting to be involved with “the Conversation” (I capitalize it in my head), which means the book chat that happens in peer-reviewed journals and books about writers and ideas. But if you want to contribute to the Conversation, get a blog from http://www.wordpress.com and start producing valuable work. Comment on the work of other book people. Write about what you notice This will not get you tenure, and it will probably not get you read by professors, but, if you’re any good, you will probably have more readers than the average literary journal.
To be sure, some people succeed in grad school. Maybe I’ll be one. Maybe you’ll be one, if you go. A PhD is not a lottery ticket, but it can start to feel like one. And, believe it or not, I’m not telling you not to go. But I am telling you that, if you do go, you better know the odds and know the costs, financial and otherwise. You better know that there are very, very few tenure track jobs, but a lot of one-year gigs at random places that are only too happy to offer you not very much money for not very good job security. A lot of people enter grad school so they can pointlessly delay adulthood. Again, not all, but more than is obvious from the outside. The problem is that adulthood arrives sooner or later anyway. A lot of people also enter grad school because they’ve succeeded by conventional academic metrics and hoop-jumping through most of their lives and find the big, amorphous real world terrifying. But grad school, if it was ever a good way of avoiding the real world, surely isn’t now, because the real world is a harsher place when you’re 32 and have a degree of dubious value and are trying to cobble gigs together to pay rent (see again the link above concerning PhDs on food stamps.)
I don’t know anyone in the business who is really gung-ho about encouraging smart, motivated undergrads and recent graduates to go to humanities grad programs.
In addition, if you don’t thoroughly read everything I’ve linked to in this post, you shouldn’t go to grad school because you haven’t invested enough time in thinking about and learning about what you’re getting into.
* Robert Nagel’s Straight Talk about Graduate School.
 Menand writes:
Between 1945 and 1975, the number of American undergraduates increased 500 percent, but the number of graduate students increased by nearly 900 percent. On the one hand, a doctorate was harder to get; on the other, it became less valuable because the market began to be flooded with PhDs.
This fact registered after 1970, when the rapid expansion of American higher education abruptly slowed to a crawl, depositing on generational shores a huge tenured faculty and too many doctoral programs churning out PhDs. The year 1970 is also the point from which we can trace the decline in the proportion of students majoring in liberal arts fields, and, within the decline, a proportionally larger decline in undergraduates majoring in the humanities. In 1970–71, English departments awarded 64,342 bachelor’s degrees; that represented 7.6 percent of all bachelor’s degrees, including those awarded in non-liberal arts fields, such as business. The only liberal arts category that awarded more degrees than English was history and social science, a category that combines several disciplines. Thirty years later, in 2000–01, the number of bachelor’s degrees awarded in all fields was 50 percent higher than in 1970–71, but the number of degrees in English was down both in absolute numbers—from 64,342 to 51,419—and as a percentage of all bachelor’s degrees, from 7.6 percent to around 4 percent.
Fewer students major in English. This means that the demand for English literature specialists has declined.
The number of undergrads in English Lit has declined while the number of people getting PhDs has remained constant or, if anything, risen. There is basically no industry for English PhDs to enter. You do not have to be an economist to understand the result.