University Administrator and Faculty Pay in the New Gilded Age

BY PAUL CAMPOS

The following is reposted with permission from the Lawyers, Guns, and Money blog.  Paul Campos is Professor of Law at the University of Colorado, Boulder.

Here are some numbers that I hope speak for themselves. ALL FIGURES ARE INFLATION-ADJUSTED INTO CONSTANT 2018 OR 2019 DOLLARS.

Salary of full-time faculty at American colleges and universities

1970-71: $81,798

2018-19: $88,703

Percentage of university faculty that were full time

1970-71: 77.8%

2018-19: 53.8%

What this means, of course, is that the average salary of the people who do the teaching in American higher education has declined substantially over the past half century, since over that time full-time faculty salaries have barely budged, while the percentage of faculty who are poorly paid part-time contingent workers has shot up dramatically.

This is true despite the nonsense we hear constantly about how university operating expenses are driven by Baumol’s cost disease, i.e., the idea that costs remain high in sectors where technology is less able to improve labor productivity, such as teaching.

In American higher education, per instructor salary costs have plunged over the past half century, even though the revenue per student American higher ed has pulled in over this time has literally doubled:

Revenue per student at American institutions of higher education

1970-71: $17,624 (2018 dollars)

2017-18: $35,234

Hey, where’s all that extra money going anyway?

Mean salary of American college and university presidents in 1983

$160,640 (2018 dollars).

Median compensation of private college and university presidents in 2018

$668,000.

Median compensation of public college and university presidents in 2019

$495,808

Mean compensation of the ten highest-paid private college and university presidents in 2018

$4.03 million.

Mean compensation of the ten highest-paid public college and university presidents in 2019

$1.49 million.

And of course if your university president is getting paid seven figures, that means that dozens of sublunary administrative demiurges must be paid salaries that are several times higher, in real dollars, than the typical university president was getting paid when I was an undergraduate in the early 1980s.

Here’s a quaint passage from a 1982 New York Times story, when Texas A&M shocked the world of higher education by luring football coach Jackie Sherrill away from the University of Pittsburgh for the astounding sum of $280,000 per year in total compensation:

Jackie Sherrill, head football coach at the University of Pittsburgh since 1977, yesterday was named coach and athletic director at Texas A & M and signed a six-year contract whose worth was put by knowledgeable sources at the College Station, Tex., campus at $1.7 million.

The contract apparently makes the 38-year-old Sherrill the highest paid university employee in the nation. Though declining to comment on the total value of the pact, Sherrill confirmed in a farewell news conference at Pitt that it was for six years and said that his base salary would be $95,000 a year. But the addition of benefits – including a home, new cars, insurance policies and money-fund investments – brings the entire package, the sources in Texas said, to an average of more than $280,000.

According to the best estimates of several officials with a broad knowledge of higher-education matters, no other person has ever received so much in pay from an American university.

”No president or chancellor or professors at any university that I know of, including our chancellor, are paid anywhere near that much,” said Dr. Ed Bozik, assistant chancellor at Pitt.

It was a simpler, more innocent time.

$280,000 in 1982 is $747,000 today. Columbia University by itself, to choose an example at semi-random, is probably paying 30 people more than that right now. Oh, let’s check:

From the 2018 990 tax filing of this tax-exempt charitable organization:

General Counsel: $773K

Provost: $866K

Senior Exec Vice President for Maximizing Synergistic Interdisciplinarity: (last four words may have been interpolated): $854K

Another Exec VP for Something Really Important: $801K

Exec VP for Health Sciences: $1.97 million.

[Thomas Dolby voice] Science!

The island of doubt is like the taste of medicine:

Clinical Professor: $4.05 million

Prof. of Surgery: $2.8 million

Prof. of Surgery: $4.8 million

Prof. of Surgery: $3.78 million

Prof. of Surgery: $3.18 million

Oh yeah, the university’s president and my old Con Law prof: $4.55 million.

And the piece de resistance: [Drum roll]

EXECUTIVE VICE PRESIDENT OF INVESTMENT MANAGEMENT: $6.17 million, which believe me doesn’t go nearly as far south of 110th Street as you might imagine.

I think that’s enough for now.

Sources:

Faculty Salaries and Full v. Part-time Ratios

Presidential salaries in 1983

Presidential Salaries in 2018/19

Columbia University Form 990

6 thoughts on “University Administrator and Faculty Pay in the New Gilded Age

  1. Pingback: University Administrator and Faculty Pay in the New Gilded Age | Ohio Higher Ed

  2. Pingback: University Administrator and Faculty Pay in the New Gilded Age | Ohio Labor

  3. Pingback: University Administrator and Faculty Pay in the New Gilded Age « By the Numbers

  4. This is hardly surprising. It is, surely, a commonplace that U.S. universities today are largely run by, for, and in the interest of their administrators.

    At my own institution, the number of FTE faculty has remained virtually level over the past twenty years, as has student enrollment. The number of non-instructional administrators and staff has increased by more than 250% during the same period. And, if the *Chronicle of Higher Education’s* recent figures are to be believed, in 2018 our president received approximately four times the salary of our highest-paid professor.

  5. This real wage gap is consistent across nearly all analogue industrial categories and classifications, and further underscored if off-shoring wage differentials are included in labor cost categories (that is, if labor wage rates in say Mexican or Chinese US subsidiaries are included, or if even compared to most foreign higher education wage rates).

    There are otherwise at least two variables that should be untangled. One is tuition inflation which stems from a number of factors. The other, probably more relevant to the writer’s observation is the “corporatization” of higher education. The fantastic wealth creation starting in the early 1980’s (when the DJIA was around 1,000) coupled to technology incubation and commercialization including defense work (e.g. MIT and Lincoln; Stanford and Silicon Valley; Harvard; UTexas at Austin including its oil and gas annuities; or UChicago and Fermi and Argonne) pulled universities into more tightly coupled growth and financial objectives, and with that a modification in the definition of university administration that sought–and still seeks–a corporate counter-part recognition in status and remuneration. That is, university presidents wanted to be “CEOs” and were encouraged by Boards largely drawn from commercial corporations, in part as a marketing signal for private, government, and corporate donation facilitation (executive salaries are used largely to create impressions of competence, value and scarcity in competitive dimensions, and reinforced by compensation consultants).

    Other factors generally include easy money policy in student loan markets (nearing $2 Trillion in outstanding debt, and half that impaired in some manner) and federal intermediation in higher education that demanded counter-party regulatory staffing. This includes a deep political component such as Obama’s “DCL” campaign that blanketed universities with reinforced civil rights law causes, and legal risk. The university sector is also fully if overly supplied, including law schools for example, and consolidation and restructuring will help in cost rationalization (assuming some regulatory guidance).

    One might otherwise wonder if we have pulled the university mission out of its legitimate topology, including state-level financial priorities. For this, some accountability has to centered on university governance Boards that are largely passive, or commercially motivated and conflicted (biosecurity development is an example). See for possible solutions: https://www.chicagomaroon.com/article/2019/6/7/university-goes-corporate/, https://www.dissidentprof.com/8-home/166-a-new-direction-or-the-status-quo-for-university-leadership-the-case-of-the-university-of-chicago, and https://www.ft.com/content/2676282a-70f1-11e9-bf5c-6eeb837566c5. Regards, ’96 UChicago; ’84, UTexas at Austin

  6. This comes as no great surprise. The era of learning-for-the-sake-of-learning is over. Academia has becomes as corporatized as a . . . corporation. Many individuals DO care about the quality of learning at American colleges and universities, but this is not highly valued in the new world of higher education. And the crushing debt that students have acquired? It goes to pay those cushy salaries. No trickle-down theory here. It trickles UP – overall, colleges want to hire more temporary, at-will faculty and pay them as little as possible, while paying admin (the NON-teachers) as much as possible. Nothing short of a general, nationwide faculty strike will change the situation. Some decent schools will remain decent, while others will slide into general mediocrity.

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