Thursday, January 27, 2011

Oregon University Funding and Faculty Salaries

Oregon Business Magazine reports on the Oregon University System's latest self study. The above chart is part of it and shows faculty salaries in Oregon as compared to all other states.  Oregon does poorly.  A few things to note about this - the first being that I clearly need a raise.  But seriously, there is a lot of talk about the generous benefits Oregon offers state employees, and they are pretty generous, but without them we would lag badly in terms of relative pay, these generous benefits vault faculty salaries from 43rd in the nation to 31st.  So talk of cutting into benefits has to take into account the fact that benefits are a component of overall compensation, so if  you cut benefits you will have to increase salaries to stay competitive.  And you will too because the second thing to notice is how states 44 through 50 offer a much lower cost of living.  I suspect that if you remade the left hand table with figures normalized by cost of living, Oregon would come out dead last.

But my experience is that faculty are not as self-interested as you might think and what rankles academics in the state is the funding cuts that affect class size, instructional support, research seminars, travel to conferences to stay current in your field.  Academics became academics for the most part because they are passionate about their fields of study and they want to be able to effectively translate their expertise into knowledge for the next generation.  Most of us went into academics knowing that we could have become wealthier if we chose a different path, so it is not as much about personal gain as you might think.  I think deteriorating working conditions are more responsible for the recent loss of two professors in my department than the fact that they now command much, much higher salaries at other state's universities.

Still academics are not immune to personal compensation.  There is a lot of talk about the fact that part of the compensation for working in Oregon is being able to live in Oregon and this is true.  Economists call this a compensating wage differential.  It is exactly what led me to choose a 25% lower salary but the opportunity to come back to Oregon, and there are many others like me.  But not that many.  There are lots of good places to live in the US and the world and if Oregon is unable to offer at least somewhat competitive salaries they are not going to be able to recruit the better talent and ultimately it will be the students and the state that suffer.  The research that gets done will not be as relevant or cutting edge (you'd better believe that the academic market prices these things), the knowledge that gets passed on will not be as timely or sophisticated and the students produced will not be as dynamic or productive.

If Oregon is unable to adequately support state universities, universities must be allowed to do what is necessary to support themselves.  I support the efforts by the OUS to become a university system and achieve more independence.  But more on that later.


Jeff Alworth said...

It's also worth clarifying that not all professors in Oregon make $73k. Some disciplines pay their faculty 20k below that--or more.

Whenever you're discussing equity, there are a lot of data points to cover. Low-salaried profs are one.

Ben Price said...

Full Professors in Oregon are vastly underpaid So is every other profession in a competitive market. Every dollar a worker makes above margins is a dollar that could otherwise be spent maximizing profit or increasing investment. Efficiency wages are anomalous.

Should the state spend more on Professors... Well that depends entirely upon the answer to this question: Are Oregon Professors producing students and research deserving of an increase in pay, in aggregate? Put differently: Are Oregon's institutions of higher education outperforming relative to others, their competitors?

Emperor Ed Ray sure likes to advertise the value a student gets out of every dollar in tuition. This is achieved partially by maintaining low wages.

In fact I'd argue that all this talent is being held captive by Oregon, by the environment itself. As such Oregon's universities are exploiting the value professors are placing on being here to leverage them into lower wages. And you may not like it, but unless people are being held against their will, it is entirely self inflicted. Professors could always move to wonderful states like Texas, or just move a little North to Washington. You'll have to pay that sales tax, but hey your income is significantly higher.

I just don't understand the complaining, I want to live in Oregon, it is obvious to do so I will make less money over time unless I can beat the trend of course. So if Professors want to make more money, for no other reason than they're underpaid. Or they feel they should make more. Well there's the door, leave en masse, if enough of you do that you'll leverage your wages higher.

Marvinlee said...

Are some professors underpaid? Probably. What if one reduced pay on the least productive and used that amount to pay more to the most productive? Some of that must occur now, but has the tailoring been optimized?

Also, what about the recent research report showing that many college students appear to learn little during their first two years of college. Have colleges lost rigor? Is that why graduate income dispersion increasing?