Psychologists’ job outlook: Good news and bad

By James Bradshaw Assistant Editor
July 1, 2006



There’s good news for psychologists as a whole in the latest occupational outlook from the U.S. Department of Labor’s Bureau of Labor Statistics – but not necessarily for independent practitioners.

“Overall employment of psychologists is expected to grow faster than the average for all occupations through 2014,” states the 2006-07 Edition of the bureau’s Occupational Outlook Handbook.

But the devil’s in the details.

Although the handbook notes that “about four out of 10 psychologists are self-employed, compared with less than one out of 10 among all professional groups,” the job outlook is best for those employed by someone else.

The increased demand, the handbook predicts, will be greatest in schools, hospitals, social service agencies, mental health centers, substance abuse treatment clinics, consulting firms and private companies.

Demand is projected to be strongest for those holding doctorates from leading universities in applied specialties, such as counseling, health and school psychology. In those areas psychologists with only master’s degrees will be at a disadvantage because of doctorate requirements for many openings.

Not so, however, in independent practice where Nicholas Cummings, Ph.D., sees the addition of more psychologists to the field as further depressing incomes.

“That’s bad news because we have too many psychologists now,” said Cummings, a former president of the American Psychological Association who has been a leader in practitioner advocacy since the 1980s.

Cummings said for every doctoral level psychologist there are four to five master’s level psychologists, which has allowed the marketplace – particularly the market covered by managed care – to set payment levels at the lower master’s level.

“They (master’s trained psychologists) have flooded the field,” he said.

Payment levels are further depressed because behavioral health insurance payers also often accept other service providers, such as counselors or social workers, Cummings said.

Hawaii is an exception that demonstrates how that has come about, he said, pointing out that social workers are not licensed in Hawaii, which means they cannot qualify for third-party payment in most instances. As a result, psychologists in Hawaii average $120 to $130 an hour, Cummings said.

The labor handbook included median incomes as of May 2004. The median for clinical, counseling and school psychologists at that time was $54,950 and was highest – at $64,460 – for those working in the offices of other health professionals. The median income for industrial-organizational psychologists was $71,400.

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