Higher Education Strategy Associates

Added Thoughts on Faculty Salaries

Back on Tuesday, I published some data on faculty salaries, which always gets people’ attention.  I’d like to address some of the feedback I received and make a couple of additional points.  The comments mostly converged on two areas: the appropriateness of the comparisons to the US and the interpretation of the reason for the rise in Canadian salaries.

First, the US comparisons.  Some questioned the appropriateness of the dollar conversion factor.  I used Statscan’s published US-Canada PPP figure for the start of the academic year for the most recent year for which data was available.  Some suggested I should have used current values (wouldn’t have changed much) or that I should have used exchange rates, which actually would have made Canadian salaries look even higher, as in September 2014 the dollar was at 91 cents.  I think on the whole, since most salary gets used to purchase goods in one’s home market, PPP was the right choice.  Some also questioned whether the AAUP’s public doctoral category, which contains 156 institutions, was the right comparator for the U-13 (that is, the U-15 minus Laval and Montreal, where data was not available), given the diversity of institutions it covers.  There is some truth to this: I think on our U-13 is probably a slightly more elite group than its American competitor.  It’s possible that if I’d added, say, SFU, Guelph, Carleton, Concordia and Memorial, the comparison would be a little closer.  But then I’d probably (rightly) be criticized for arbitrarily including certain institutions.  So I’m prepared to take the rap on that because I’m not sure what other comparator I could reasonably have used.

One point on which I should make a mea culpa is that the way average salaries for “all ranks” was calculated for Canadian and American profs is slightly different.  The American figures include salaries for “no rank” professors (i.e. professors at institutions which do not have ranks, not sessionals) and visiting professors while the Canadian ones do not.  This probably depresses the American figures slightly compared to the Canadian ones.  Not by much, but it’s a caveat I should have noted.

The second area where I received questions and comments is with respect to what caused the run-up in average salaries.  One person suggested comparing average wage gains in the population (inflation + 0.3%) to those of professors (inflation +2.5%) was unfair because the former churned whereas the latter did not; in a similar vein, one person suggested the problem was related to hiring, or lack thereof.  If only more new staff had been hired, the argument went, the average would have decreased.

With respect, this is point-missing on a fairly large scale.  Universities hire based on what they can afford from their total budget, not to hit some arbitrary target on individual salaries.  And if their largest single expense is growing at more than twice the rate of inflation year after year, then they aren’t going to hire a whole lot of new staff (for the record, over the five years at the 38 institutions examined, the number of full professors increased by 9%, the number of associate profs increased by 15%, and the number of assistant profs dropped by 22% for a total gain in size of 3%).

The root cause here is simple.  Professors no longer have to retire at 65 and an increasing proportion of them are electing to remain on the payroll.  That means an increasing number of professors are earning very high salaries.  All full professors in Canada are in the top 5% of wage distribution in the country (threshold = $102,300), and a non-negligible proportion are in the top 1% (threshold = $191,000 which is right about the *average* wage of full professors at the University of Toronto).  Yet they continue to receive annual wage increases of 4% or more – meaning annual increments of $5,000 apiece and up (imagine what that kind of money would mean for grad students).  It’s not just that this crowds out money for other purposes; it also makes institutions really wary about hiring new staff.  Both of these factors contribute, quite understandably, to increasing casualization of staff – though again, note, total full-time staff complements are actually up 3% over the last five years.

But the question of course is: what can be done about it?  The most obvious thing would be to do more to rein in salaries at the top – putting hard ceilings on full professors’ salaries after a certain number of years.  Since faculty unions are always going on about the need to rejuvenate the profession and the travails of young faculty, it would be worth taking them at their word and seeing if they’re prepared to negotiate something that would help achieve that aim.  A more stringent approach would be to make rank progression more difficult.  That wouldn’t have much effect in the short-term because people would continue to get annual progression raises, but over the long run, doing something like capping the number of full professors at 30% of total faculty would do a lot to rein in costs because it would restrict the number of people getting to the highest pay ladders.

We have, through union power and a Charter ruling on retirement, got to a point where we are spending a lot of extra money every year on staff with almost all of it going to existing staff who are already among the country’s best paid workers, and very little going to hire new staff.  It is within the power of both institutions and unions to change this, if they want to.  But first we have to recognize the problem and discuss it honestly.  The question is whether the will exists to do so.

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7 Responses to Added Thoughts on Faculty Salaries

  1. Dan Smith says:

    Hi Alex:

    I find this interesting not only because of my own context – a VP Academic & Research at a small public institution in Manitoba, with a new government bent on demonstrating enthusiasm in its role in reining in public spending – but also because the conversation is one that tends to be framed largely within the context of the academy alone.

    Reflecting on the Democrat’s experiences on November 8th in the US, I wonder if we, the academic establishment, are in danger of falling out of touch with Canadians who largely foot the bill for high salaries through taxes and tuition. We often speak about relevance of credentials to the economy and to the labour market, but relevance to the median income is also important (and perhaps that is the wrong way to express that idea). In any event, I don’t think that the ongoing discussion of academic wages across Canada engenders the same kind of passion among folks in unskilled trades, working retail, or other jobs that help to define the lower half of the ‘median’ income.

    In this context, I am unsure if the discussion on academic salaries really engages the public effectively to the benefit of the academy. It is tempting to talk among ourselves about pay and working conditions as if everyone agrees with our perspectives around university or college competitiveness and quality. However, that approach misses the point you make in today’s post – these are some of the best paid employees around, and I’ll add that they have some of the best working conditions available (yes, including parking). It is valuable, I think, that we keep that in mind before the academy completely loses touch with, and the support of, the public it serves.

  2. Sharon Johnson-Legere says:

    Great articles that past two days! I would like to see a Part 3 which compares workloads to the US. As I understand while wages have been escalating, teaching workloads have been dropping. Is it happening to the same extent in the US. It would be interesting to see a ten year trend in the faculty cost per contact teaching hour.

  3. Harvey David says:

    This is pretty much along the same lines of what I was suggesting: a means to rein in senior level faculty salaries (given that no one can really be pushed out the door), but there is also the buyout option, too, that you might consider.

    When it comes to faculty associations, given that they can be largely indexed on calculating for their own advantage, there would probably never be one of those “big picture” moments where they would agree to freezing salaries or making progression more challenging. Generally, engagement by faculty in bargaining is increased by focusing more on pocketbook issues like compensation than any of the other issues. For a faculty association to opt for a salary freeze is almost a guarantee that they would never get a strike mandate if necessary (it is highly unlikely to get one of those on non-compensation issues barring some sort of draconian admin policy on productivity or some-such). Instead, we get a lot of lip service to “faculty renewal,” but also big asks for non-market based increases in compensation. And then you can cue the usual finger-pointing and straw person positions about admin bloat as the “reason” why faculty renewal is not happening (it is a little like demanding a yacht and criticizing the other side as being profligate for splurging on a latte). Worse still is the use of comparisons that only drive those salary increases, usually along the lines of “similarly-sized university A pays its faculty x% more than us, therefore we demand you close that gap!” If more FAs use that tactic, you can see what inevitably happens across the entire sector. Salaries escalate like some kind of bizarre arms race.

  4. Jim Woodgett says:

    Some very interesting data here Alex. The numbers showing increases in the Assoc and Full Profs and a striking decline in Asst Profs is a huge concern (not only for it’s impact on salary costs). The average age for getting a CIHR grant in Canada is now at the same age as getting a first NIH grant in the US – 42. Moreover, the number of grants going to people 65 and above is the fastest growing segment of the professorial group. This is bad for many reasons. I do not mean to imply that older scientists are less wise/effective, etc. but they usually have accrued additional responsibilities (admin, e.g. me) and other distractions. They are less risk-averse and at least some lack the awareness and willingness of younger scientists to take on new technologies, etc.

    There are phenomenal young researchers out there and I seriously doubt that many of the older researchers (me certainly included) could compete with them for new jobs.

    P.S. I have a 4 pack of Curly Wurly’s with your name on it. Go TFC!

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