# Scientists: Bringing Home the Benjamins

by on June 2, 2010

While astronomers as a rule handle grant money responsibly, they’re often terrible with their own finances.  The gamut ranges from reckless experimentation, to willful obliviousness, to resigned acceptance of lifetime poverty.  In part, our attitudes toward money are reflections of our career choices — toward “pure science”, away from commercial pressure.*

In practice, many of us follow something like this financial path:

• Pay for college by working and going into debt (unless we have rich parents or a scholarship).
• Go to graduate school, funded by a research assistantship (RA) or teaching assistantship, which waives tuition and pays a modest stipend.  (Is $23-30K/yr the ballpark stipend now?**). If the city has a low cost of living, grad students may buy a house. (California grad students, ignore these rumors — they will only depress you.) • Spend ~6 yrs as a post-doc at$50-60K/yr.  Grant–supported postdocs generally get a retirement account, but don’t stay long enough to vest.  Fellowship postdocs are often excluded from the retirement plan.  Pay off  student loans.  Buy a house if the cost-of-living is low and the postdoc duration long.
• (Hopefully) find a more permanent position, earning a range of salaries.  A plot from the 2006 AAS meeting shows starting assistant professor 9-month salaries at $51K to >75K; that’s$68K to $100+K for full-year salaries (in 2006 dollars.) Get a retirement account and a mortgage, if none already. As a result of this career path, the average astronomer is spending their early 20s and 30s dramatically underpaid compared to equivalent salaries in industry, and establishes a retirement account only in their mid-to-late 30s. Thus, we have a profession in which some of the hardest–working practitioners are earning only$25K/yr, while some of our famous senior peers win million-buck Cosmology prizes (often for work done as under-paid junior scientists.)  What do y’all think about this?

I think we need to change that system — raise graduate student stipends, especially on the low end; pay postdocs more; mandate retirement accounts for all postdocs including fellows.  A barrier to doing that is that there’s no shortage of bright junior people eager to be paid poorly to do astronomy.  AstroBetter readers, do you have bright ideas on this topic?  Can you brainstorm some institutional solutions?  If so, let’s get a discussion going in the comments.

(In the next post, I’ll talk about how underpaid junior astronomers can take charge of their own personal finance).

*To quote the greatest lab report ever written, “Going into physics was the biggest mistake of my life. I should’ve declared CS. I still wouldn’t have any women, but at least I’d be rolling in cash.”

**That’s the range of 2009 stipends published on the astronomy department websites of U Michigan, Rutgers, UCSC, and Vanderbilt.)

1 Ken June 2, 2010 at 8:03 pm

I think the issue of wanting higher grad and post-doc salaries is directly related to the difficulties our field has in generating revenue sources and overstocking departments with non-faculty members. So basically I’m pointing a finger at the overproduction issue and the tight budgets of universities/institutions.

Some forward-thinking department may someday challenge their faculty/staff to take less in salary to give a bump in pay via supplementary stipends to grads/post-docs. But, any department that does that runs the risk of hamstringing themselves when it comes to competing for new hires. Similarly, I would expect a department with such long-term vision to limit their grad/post-doc load to balance the demand within the field. I don’t see any such effort from the A1’s, so maybe I’m asking for the Moon.

2 John O'Meara June 2, 2010 at 8:07 pm

One possibility is to extend the summer salary system that faculty use to pump up their salaries to earlier in the career stream. Postdocs and grad students who are part of grants could get a nice giddy-up that way.

The retirement issue is a different one entirely…..I got nothing for that one.

3 Tanya June 2, 2010 at 8:34 pm

I don’t know, I don’t think raising grad student’s money is the way to go. I remember when I was a TA and this guy came by to get me to join the Union. One of his pitches was that we would get better salaries. “But I don’t want a better salary!” was my response. “I’ll just get complacent, because I really like it as a grad student and I won’t be encouraged to move on, publish etc.”. He stared at me blankly and left.

I do see some sort of weird dichotomy between the grant-funded jobs and more permanent positions, in everything: pay, prestige, heartache, etc. But I’m really not sure how to fix it…

Another point I do agree with are that grad students and postdocs should have some sort of option to pay into their retirement. I know I’ve been saving, but a employee plan would’ve been nicer.

4 Ben June 2, 2010 at 8:43 pm

I am not qualified to give financial advice. But two thoughts on the retirement account:

1. If you are only starting an account in your mid- to late-30s you’re starting too late. The transition from grad-student to postdoc is the biggest percentage salary jump you’ll ever get, even with the student loan burden. Save some of that extra money and start putting it in a Roth IRA, in some mutual fund that has minimal fees and doesn’t do too many stupid trades. (e.g. Vanguard)

2. If you are paying into TIAA-CREF at one institution and then move to another institution that uses TIAA-CREF, you may be able to get that institution to vest you, even though your duration of employment is not long enough to meet the usual requirement for vesting. This is the only **FREE MONEY** you will ever get, so take advantage.

(For those who have not been thinking about this, “Vesting” in this context = you get to keep your employer’s matching contributions to the retirement account. Typically you have to work for a place for N years before the employer’s contributions are vested.)

This comment is the sum total of my knowledge of personal finance!

5 anonymous June 2, 2010 at 11:32 pm

Or you can do what I did, which is to get an adjunct faculty job in the middle of grad school, earn more in 6 months than I was earning in entire years, put the max amount I could into my Roth IRA, and… then watch the stock market collapse, because I did this in mid 2007.

Does no one have a better idea for retirement saving than putting money into a stock market that seems totally disconnected from reality?

6 jd June 3, 2010 at 1:01 am

I don’t know that just upping grad student and postdoc salaries would work out exactly as intended. As it is, astro postdocs can make close to (or, in the case of Hubble Fellows, more than) starting assistant professors (many of whom will not be getting summer salary, in today’s grant climate), while having far fewer responsibilities. From a PI’s perspective, it’s getting to the point where hiring a grad student is about 75% of the cost of a postdoc, once tuition is included (i.e. only a fraction of the cost to the grant winds up in the student’s pocket). Since most grants are essentially contracts to get tasks X, Y, and Z done, you’ll find more PI’s opting to hire fully-trained postdocs instead of still-wet-behind-the-ears grad students, if the cost incentive to take a risk with junior personnel disappears. While maybe this would wind up reducing overproduction of grad students somewhat, it would exacerbate the problem of keeping PhDs in a long series of temporary gigs. I’m not saying the current system is perfect by any means — it’s just that the ramifications of changes are often difficult to anticipate.

In my view, keeping the time to PhD short is one of the simplest things to do. Switching career paths (and earning potential) when you’re 26 is way different than switching when you’re 30. I’d also like to see a better system for professional astronomical staff. Biology is used to the concept of having long term staff as part of the enterprise, even at universities. Unfortunately, university-based astronomy doesn’t yet have established tracks for this, whereas the sophistication of projects frequently now demands it.

7 Becky June 3, 2010 at 1:16 am

How much of this needs to be addressed at the NSF and NASA (i.e. grant source) level, rather than the university level? That’s where most of the salaries are coming from. It’s been well established that most universities have no earthly idea what postdocs are (as when the UC system thought they could save money by cutting all salaries, regardless of funding, like, wtf), so they’re going to be useless.

I’d love to hear suggestions for cutting time to PhD — so many things depend on the institution and the advisor and the student and the project and the committee and . . .

8 bph June 3, 2010 at 1:30 am

The retirement issue might be a solvable one. It would require some university administrations to change how they deal with postdocs, but putting the retirement contributions in an IRA or 403b would go a long way to allowing postdocs (and possibly grad students) to build up savings. At at least one state institution, I know that 403b contributions can be rolled over into an IRA (tax-free) when you leave.

Frankly, I am amazed at how much astronomy postdocs are paid. Biologists get nothing in comparison. I wonder how much longer this will last, given the glut of PhDs (all of whom are ridiculously smart) and the flat profile for future funding.

9 Ken June 3, 2010 at 3:28 pm

Lots of good advice and ideas here for the young astrophysicist. Ben’s point about stashing money away when moving from grad student to post-doc bears repeating. Having adapted to the lifestyle and financial burden of being a grad student, a post-doc salary looks like a fortune! New post-docs should be encouraged to capitalize on this huge bump in pay and save the “extra” income for later investment. Incremental contributions to an IRA or staggered CDs is a very simple investment strategy for this found income.

“Biology is used to the concept of having long term staff as part of the enterprise, even at universities. Unfortunately, university-based astronomy doesn’t yet have established tracks for this, whereas the sophistication of projects frequently now demands it.”

There is also a huge difference between the finances of a biology dept and an astro dept. Industry and private contributions to bio and chem research dwarf those of astro. So modeling our field after one of these others may not be the wisest strategy. Unless, of course, we enter the age of Star Trek and astronomers and astrophysicists become a vital component of operations! 😉

10 Christian Ott June 5, 2010 at 2:04 am

Postdoc at $50-$60k? My postdoc in Astronomy was \$40k at the University of Arizona in 2006!

11 Kurtis W. June 6, 2010 at 6:15 pm

The problem with many of the ideas here is that what sounds like a good solution to one or many of us may not work for everyone. Socking away money as a postdoc is great if you are willing and able to continue to live the spartan life of a graduate student. But it you have student loans, want to start a family, want to buy a house, and want good health insurance for the first time in your life, that extra income is more than gone. Likewise, retirement benefits, vestment, roll-overability, etc. vary wildly from place to place. Raising salaries inflates grants at a time when the money available is not keeping pace with inflation, let alone growth in the field.

I can think of two ideas that, while not solving any problems, may at least provide information that I never had nor thought to seek out as a young and starry-eyed student. First, if we could come up with a realistic estimate of the cost of a traditional academic career vs. an industry career (exiting from academia at various points), we could go to our undergrads thinking of grad school and say, “Accounting for all forms of income, getting a PhD is a million dollar bet on a 1-in-4 chance of a lifetime academic career” (or whatever the numbers are).

Second, grad students and postdocs should be strongly encouraged to seek financial planning advice. While I had these opportunities in my postdocs, I never took advantage of them due to inertia, not wanting to give up several hours, not wanting to admit that I can’t use my own money efficiently, etc. But if we brought financial counselors into the department and encouraged young astronomers to make use of that resource, maybe more people would get that assistance.

12 Marcos June 6, 2010 at 7:30 pm

I’m with Ken, it comes back to overproduction. It still amazes me that we pump federal money into postdocs and grad students, creating a bigger pool of people for jobs that don’t exist. Fewer grad students. Better salaries. In fact, given the realities of the job market, if we’re going to crank out grad students with no regard for the actual demand for Ph.D.s, we should pay them a decent salary.

13 Vicky June 6, 2010 at 11:55 pm

I agree with the above comment from Marcos. Not wanting to discourage anyone from doing a PhD, but it’s getting increasingly difficult to get a postdoc at the end of it. In the UK for example (where I’m from), the research council cut *all* their fellowships this year. Advanced fellowships were still on, but none of the standard ones. These were already stupidly oversubscribed, but it was just another blow to the young scientist.
Another problem is the international nature of the job. The impression I get is that it is easier to keep your entire career in one country in the US (where I am now based). But if you have to move countries between postdocs, as a large fraction of Europeans do, you’re screwed by the retirement plans anyway. When I started my postdoc over here the HR person told me not to even bother setting up the retirement plan I was offered as there was no point in having it if I was going to return to Europe at the end of my contract. Never mind the fact that I’d actually have to find a job there for that to happen. I agree with the earlier post that suggested financial advice for students/postdocs. Honestly, I think that would be the most valuable thing we could get, much more so than raising salaries.

14 Jane Rigby June 8, 2010 at 5:32 pm

Thanks for this excellent discussion, all. Let’s keep it going! I’ll take a few minutes and synthesize.

Some comments focused on policies of our institutions and funding agencies. Should departments pay postdocs and grad students more? If so, how would this happen? Is there any way to constrict the restrict the number of new graduate students, to address the oversupply issue? What are the ethics of this? Kurtis proposes giving all astro u-grads (& 1st year grad students) a lecture on the financial trade-offs of an academic career, and the latest best estimate of the PhD overproduction rate. In my opinion, we owe this to our students.

JD makes the point (#6) that shortening the time spent in grad school may be easier than raising grad salaries. I agree, but does anyone have advice on how to get committees to actually do this? If we shorten the time to graduation, we presumably shorten the thesis — yet I know committees that balk at “only 3 papers” in a thesis.

S(gstudent) ~ 0.55 S(postdoc) ~ 0.38 S(asstprof), give or take. JD mentioned that it’s increasingly economically favorable to hire a postdoc rather than a student to complete a project, and that raising grad salaries would shift this balance further. Thoughts?

BPH’s comments that getting retirement benefits for postdocs may be an achievable goal. I agree. As I understand, universities have the power to open their 403bs to postdocs, and may already do. Some (e.g. Caltech) even vest postdocs quickly. Often, these same universities declare that fellowship postdocs are not employees, and thus not eligible for retirement. (Disclosure: this is the tiresome practice of my current institution.) I suggest that the fellowships themselves (the Einstein, Sagan, Hubble, NSF, etc) should declare that institutions must provide a retirement account. They did this a few years ago for health insurance, with great results. Is this something you feel is important? If so, that’s something to take to the AAS Employment Committee.

Ben’s comments on personal finance (comment #4) are worth reading, twice. I endorse everything he said. That CREF trick is sweet — I know of at 2 astronomers who used it to gain 3 extra years of retirement contributions.

Kurtis and Ben disagree about whether it’s possible to sock away extra money (and belatedly start a retirement acct) upon the student-to-postdoc salary bump. I partially agree with Kurtis — it’s hard! but I disagree with him that it’s possible. I’ll elaborate on those thoughts in a future post.

Finally, I’m relieved that we’ve avoided an ugly catfight about which subset of us underpaid scientists (grad students, postdocs, assistprofs, research staff) is the only one deserving of a raise. Thanks.