I don't know that academia is the problem; I know many friends who work private sector and are, or were, miserable for numerous reasons. Rather, I think that an academic career is one that carries an air of prestige in society, is misunderstood in general, and even in academic circles is believed to be something to be cherished and coveted. In short, the problem might be more of how we (society and academics alike) perceive what it is to be a faculty member. Perhaps part of the problem is many of us have a tendency to think of an academic career as something encompassing all of life rather than merely being a career.
Here are the pros and cons of an academic career in psychology versus the non-academic path. I'm considering non-clinical psych fields here, as I am not a clinical psychologist.
Psych Faculty Pros
- Significant freedom with teaching, research, and often even scheduling
- Usually a 9 or 10 month contract (which means the low pay isn't so low)
- A 403B retirement plan
- Ability to pursue what we find intellectually curious
- Work that is meaningful - whether research or assisting students in achieving their goals
- Fair job security if on the tenure-track
- Career has a "cool" factor
- Ability to travel for career related purposes
Psych Faculty Cons
- Tough to get started in a tenure-track career
- Heavy competition for grant and publications (more a concern with R1 level or related)
- Heavy teaching loads (for non R1/R2/Elite SLACs)
- Unpaid service work (which can get nasty at smaller institutions)
- Low pay relative to private sector
- Lack of vacation time to use whenever you want
- Hard to move around or go to the locations you want for your career
Private Sector Pros
- 12 month work (less of a roller-coaster than faculty work)
- Usually pays far better than faculty positions
- Easier to get to a location you want
- Flexible vacation time you can use just about whenever
- Might have better resources/technology
- Lack of teaching (if you want mainly research)
Private Sector Cons
- Might not have as much freedom to pursue what interests you
- Stricter deadlines with producing outcomes
- 12 month work (having summers partially off is really nice)
- Need to use some vacation time for holiday travel usually
- Less opportunity to teach (if you like teaching)
- Hard to get back into the faculty stream unless you're in an applied field
… To me, if you're motivated by an ideal location or money, the private sector makes sense. I'd say it also makes sense if you mainly are interested in research but are stuck at a place with a heavier teaching load. In such a case, the private sector may work well - I know this proved true for at least one colleague of mine. I concur that happiness is something we should all strive for. That said, if you like work as a faculty member but are mostly displeased with where you live, you could go on the academic market and apply for assistant professor positions at stronger institutions. Presuming your present place is on the lower end of the pay scale, this could work well and give you a nice salary boost. I know another colleague who did this.
I hope these thoughts help in some way.