A labor market solution to the shortage of doctors and pilots.

The labor markets for doctors and pilots are surprisingly similar and are driven in large part by similar constraints:

  • Both industries are categorized as “high reliability” and are greatly regulated by the government.
  • The work is mentally challenging and physically demanding in terms of motor skills and stamina. This naturally results in a limited pool of candidates who are able to qualify for available positions.
  • Workers must be trained and certified to operate routinely and safely in a high reliability environment where even the smallest of errors can produce outsized and even catastrophic events in terms of human, property and financial costs. Training standards are very high which serves to limit the number of candidates that qualify for positions, and in fact limits the number of individuals that can succeed at training.
  • Due to the highly skilled and inherently dangerous nature of the work, new doctors and pilots can expect to work for many years in what is essentially an apprenticeship system to further develop required skills.

Given the realities of these labor markets, it would be reasonable to conclude that a lucrative career awaits those that qualify and who can succeed during their training and apprenticeship.   Why is it then that both industries are experiencing a shortage of young candidates seeking careers as doctors and pilots?

The reasons for the current and predicted shortages of pilots and doctors are easily understood from an objective economic perspective: an increasing demand for labor and reduced supply of those willing to devote their productive work to the industries. The demand side in fact is very simple to explain: both medicine and professional aviation are retiring baby boomers at a prodigious rate at the same time these industries are experiencing rapid growth.

The supply side shortage can be explained from the standpoint of young people making a rational economic decision based on a rational risk – reward analysis. Both careers are increasingly less attractive to candidates who consider the staggering personal investments of time and money required to get to a point where they can expect a level of compensation commensurate with this investment. It takes roughly a decade to fully educate and train both pilots and doctors and at least another decade, often much longer depending on economic cycles, for a pilot to reach a reasonably high level of income with a major airline. While new doctors can leave medical school with debts in excess of $350,000, it isn’t unusual for young pilots to also have educational and training debt and other commitments approaching $200,000, yet starting salaries in the aviation industry can be as low as $25,000.

Additionally, while the adverse, low paying and unpredictable working conditions for doctors during their internships and residencies has been well documented, the onerous working conditions for young pilots attempting to start a career has only recently been discussed at a broad level. The pilot apprenticeship phase demands long hours at very low pay, generally offers very little predictability, and is measured in years. Those fortunate enough to qualify for shrinking number of military aviation training positions incur obligations of up to 15 years, and are increasingly electing to pursue other career interests outside of commercial aviation, should they decide to leave the military after this obligation.

To be sure, work for employees in many industries demands long hours, low pay (especially initially) and significant unpredictability. However, most of these do not face the the inherent labor market constraints described above, or if they do, total compensation reflects this risk both in size and when it becomes available (legal and financial professionals, for example).   Simply put, young people considering careers in medicine and aviation are voting with their feet. The perceived financial and quality of life rewards won’t come soon enough and won’t be large enough to outweigh the personal investment in time and money. Risk versus reward.

Some leaders and pundits in both industries have called for a lowering of training standards as a way to create more doctors and pilots more rapidly. Others, particularly in the aviation industry, have called for a redistribution of wealth from senior pilots flying at major airlines to the junior pilots flying at regional airlines and other low paying aviation companies and/or an increase to the mandatory retirement age of 65 for commercial airline pilots. These solutions fail to addresses the fundamental economic risk-reward problem that is driving the shortages.

Solutions that force the “invisible hand” of the labor market through regulation are fundamentally inefficient and would actually serve to worsen the supply problem. No one suggests paying Silicon Valley or Wall Street executives less so the savings can be shifted to new employees. To do so, or to raise the mandatory retirement age of pilots would serve only to further disincentivise career seekers by reducing (either early or late in a career) the total value of what should be a very difficult to obtain and therefore lucrative career. Additionally, lowering senior pilots’ pay late in their careers would further exacerbate the demand problem, as many experienced pilots would elect to leave the profession before reaching retirement age. Finally, years of data in both medicine and aviation have proven that inadequate training and experience inevitably serve only put the public at increased risk. Current training standards, especially in the commercial airline industry, are data and results driven and reflect an unmatched safety culture that learns from its errors and is dedicated to driving the accident rate to zero. Training and experience is expensive, but there are no substitutes or shortcuts in high reliability industries.

Despite arguments calling for regulatory fixes, the labor market is not broken for medicine or the airline industry any more than it is for lawyers, the NBA, Wall Street or Silicon Valley. The demand problem is real and will remain so, as long as the risk to new entrants into the aviation and medical industries remains too high relative to the reward. Therefore, any genuine “fix” must address the currently out of balance risk-reward analysis that is driving talented young people to seek less risky careers that are easier to obtain, start with less debt, and have higher starting salaries which increase rapidly. Additionally, the “fix” cannot diminish the overall total value of the respective careers or cause senior and experienced professionals to leave the industries early. Said another way, money talks — pay more and young candidates will flock to these job again.

Brian Hennessy is a pilot and principal at Blue Hawk Aviation, an aviation services and advisory company based in New Orleans.  www.bluehawkaviation.com

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