|Taken at the Chicago Board of Trade.|
There's another group of people who have a difficult time deciding whether or not they should undertake a lengthy endeavor: farmers. How do they hedge the risk of planting in April and not knowing the price of corn when they'll be delivering in October? Well, there's always the futures market.
How it works, thanks to a helpful explanation from the Kansas City Board of Trade:
A futures contract is just what it's called - a contract. It is not equity in a stock or commodity. It is a contract - a contract to make or take delivery of a product in the future, at a price set in the present. If you agree in April with your Aunt Sue that you will buy two pounds of tomatoes from her garden for $5, to be delivered to you when they're ripe in July, you and Sue just entered into a futures contract. [snip]
Professionals such as grain merchants, energy firms and portfolio managers use futures and options to reduce the risk to their business associated with volatile prices. For example, a flour miller might use a futures contract to set a price now for wheat that he knows he will need to purchase in the future, rather than face the chance that prices could be even higher when he buys the wheat. Similarly, a natural gas producer might use a futures contract to set a price now for gas he will sell in the future, locking in a profit rather than being exposed to the possibility of lower prices. These types of futures and options users are known as hedgers, and are in the market specifically to reduce risk.One could imagine a futures contract made with employers after a graduate student's candidacy exam, i.e. 2-3 years ahead of graduation: the student agrees to take a position at a specific wage in the future, locking in a somewhat lower wage in exchange for some stability. The employer agrees to "take delivery" of the Ph.D. student, with a knowledge that they won't be subject to spikes in labor costs. If this were to happen on an exchange (anonymized, in some fashion), people could see what the going rate for future chemists were, and whether or not they should attempt to "plant" more chemists.
I doubt that employers would be interested in participating in this sort of system; I assume there will always be plenty of chemists for them to choose from. I'm sure there are other awful flaws in my thinking, and there's no guarantee that there won't be a warehouse full of shrink-wrapped pallets of postdocs down by the docks who are all owned by Goldman Sachs. But there's something to be said for getting some price discovery on a future in chemistry.