Higher Education Strategy Associates

Category Archives: salaries

April 01

“Slow Professors”

I read with interest this piece in University Affairs about “The Slow Professor”, which is the name of a book by Maggie Berg and Barbara Seeber – English professors from Brock and Queen’s, respectively – who think that professors need to push back against the hecticness of the modern academy.  To wit:

“The authors offer insights on how to manage teaching, research and collegiality in an era when more professors feel ‘beleaguered, managed, frantic, stressed and demoralized’ as they juggle the increasingly complex expectations of students, the administration, colleagues – and themselves. ‘Distractedness and fragmentation characterize contemporary academic life,’ they write. Today’s professors, they argue, need to slow down, devote more time to ‘doing nothing,’ and enjoy more pleasure in their research and teaching. It’s time, they say, ‘to take back the intellectual life of the university.’”

Hmm.  Hmmmmm.

I don’t doubt that the majority of Canadian professors work hard – very hard indeed, actually.  Not all, of course; but on the whole, absolutely.  In fact, some data from the 2007-08 Changing Academic Profession Survey suggested that Canadian professors might actually work the longest hours of any professors in the world.  And that’s OK, given that the Canadian professoriate is also the best-paid in the world.   Maybe the two are linked.  Not directly of course; nobody actually correlates pay to effort in Canadian higher education.  But overall, maybe we’re getting a good deal: high-paid, hard-working professors. Nothing wrong with that.

So, how to interpret a demand for less work such as that contained in the Berg-Seeber piece?

The most cynical answer I suppose, would be: hey, look, two profs who want to work less for the same pay?  But this is perhaps too churlish.  The authors do after all make a less-is-more argument – that they will be better academics if they have more downtime.  One could imagine a deal that trades time for performance.  That is, say we could come up with a performance metric for professors that lets them reduce their hours, provided they hit particular targets.  But of course the metricization of higher education is something else the authors rail against, so that’s probably not an option, either.

This leaves a third possibility: why not let professors trade salary for time?  If you want to be on a 40-hour/week track instead of a 55-hour/week track, do it – but take a pay cut.  Sounds fair to me.  Of course, the only way to implement this is to have a system in which management actually pays attention to workload in a systematic way.  We don’t have that here in Canada – but other places do (notably Australia).  Maybe it’s time we moved in that direction?

One final point.  The authors locate the source of stress in the academy as the university’s “corporatization”.  This is a hard claim to evaluate without knowing which of the myriad definitions of “corporatization” they are using, but let me simply suggest an alternative explanation. Maybe, just maybe, the academic rat-race is a product of really bright, driven people pushing themselves even harder when they are surrounded by other bright, driven people.  That is, it’s an emergent property of academia itself, rather than something imposed from without by mean old administrators.

February 29

House-Buying Power of Academic Salaries

A couple of weeks ago, the Times Higher Education put together a cute infographic showing how many square metres an academic salary bought in different parts of the world (the full article is here).  I thought I would try the same thing for here in Canada.

So, here’s what I did.  I took median academic salaries for major universities in Canada for the 2010-11 year, the last year for which comparable data is available (yes, it’s a travesty.  But the travesty isn’t just that Statscan no longer collects the data; it’s also a travesty because, four years on from Statscan throwing in the towel, Canadian universities still haven’t gotten their act together enough to publish this stuff nationally, even though they all collect the data in the same format.  Yeesh).  The data includes Deans’ salaries, but excludes salaries in medical faculties (you can see the version published by Maclean’s, here).

To look at housing costs, I went to Numbeo.com, which is a database dedicated to providing comparative cost of living data for cities around the world.  For each of the 20 cities in Canada, I queried the “cost per square metre to buy an apartment in the city centre”, which appears to be how the THE got its statistics.  I am a bit dubious about this one.  It’s not quite apples-to-apples since the quality of a downtown condo differs somewhat for place to place, and in some of the smaller cities the numbers look suspiciously low (I have a hard time believing the price per square metre in Kingston is a third of what it is in Toronto, but whatever).

Dividing one figure by the other gives you the number of square metres of housing an academic salary can buy at 29 Canadian universities.














Across Canada, Waterloo and Dalhousie are the median cases, where average salaries purchase about 30 sq metres of housing a year.   But the spread here is quite unbelievable.  At the high end are universities in very small, inexpensive cities like Windsor and Sherbrooke (though it’s debatable how fair the latter figure is, given how many Sherbrooke profs actually commute from Montreal); at the low end, all five of the bottom spots are taken by universities in Toronto and Vancouver.  It’s the city housing costs, not the variation in salaries, which really causes the difference here.

(Sidebar: remember how Windsor faculty actually wanted to go on strike 18 months ago, in part because of pay issues?  Think back to that, while keeping in mind that housing costs in Windsor, as a function of salary, are 5 to 6 times lower than they are in Vancouver.  Just think about it and wonder.)

You can’t quite make a comparison between this data and that used by the Times Higher Ed; if I understand their data correctly, their numerator is the figure for full professors only, not all full-time academic staff.   But, very roughly, our profs in Toronto and Vancouver are not nearly in so difficult a position as professors in big Asian metropolises, London, or Paris, but they are still in a situation similar to academics in Sydney or Oxford, which is pretty tight. And elsewhere?  Things are still better in most Canadian universities than they are in Boston, Milan, and Berlin.  Which, you know – not too shabby.  This is Canada after all: apart from Toronto and Vancouver, there’s plenty of space, which keeps housing costs down.  It’s the main reason our quality of life stays high even though our productivity levels remain stagnant.

But still: these differences within the country are quite significant.  You’d think that they might actually play some role, say, in salary negotiations or arbitrators’ decisions. Just sayin’.

October 22

Amusing Footnotes on Global Academic Pay

A few months back, I finished reading The Global Future of Higher Education and the Academic Profession: The BRICs and the United States (edited by – among others – Phil Altbach and Liz Reisberg). It’s a good book for two reasons: first, it contains pretty good thumbnail sketches of the four BRIC countries’ higher ed systems, and second, it shows how crazy and fragile academics lives are in most of the world.

(An aside here: one thing I really like about this book is that it just treats the four BRIC countries as entirely separate case studies, rather than four aspects of a similar phenomenon.  This is important because although BRIC was a handy acronym to encompass “big economies getting rich quickly in the mid-00s”, their vastly differing fates this decade shows that their economic similarities were pretty ephemeral.  And what goes for their economies goes double for their higher education systems, which are basically chalk and cheese.  The result is a much better product than the much more detailed, but conceptually muddled book by Martin Carnoy et al., University Expansion in a Changing Global Economy: Triumph of the BRICs.)

One of the highly amusing (to me, anyway) parts of this book was the way it underlined how academics get paid.  In all four countries, junior academic pay is substantially below average urban wages.  That sounds surprising – aren’t these people extremely well-educated?  Can’t they command big salaries elsewhere?  To which the answer is: yes, they can, which is why recruiting talented people to the academic profession is very difficult in some places (especially Russia and India).  But it’s worth noting also that with the exception of Russia, relatively few junior academics in any of these countries possess a PhD.  In most cases, they come with Master’s degrees (in Brazil, Bachelor’s degrees are still pretty common), and many never progress beyond that.  If they do get a doctorate, they often get it while receiving paid leave from their university, which is not a bad deal.

So one of the book’s themes are the various ways that academics make money outside of formal academia – either by moonlighting at other (usually private) universities, or by teaching in a test-prep or cram school.  Interestingly, in some countries, universities open their own test-prep schools specifically so as to provide moonlighting opportunities for their own profs, which sounds only just this side of crazy, but makes sense when you realize many of these places live with weird, bifurcated budgeting rules that put them in a straightjacket with respect to public money, but let them go hog-wild with self-generated income.

The rules on money from public sources play out in some very weird ways in China and India.  In these countries, base pay is centrally regulated.  But over the years, political compromises have allowed profs access to all sorts of pools of money outside their base pay.  In China, on top of base pay, there are separate allowances for housing, food, telephone, transportation and laundry.  India also has housing and transportation allowances, in addition to a “dearness allowance” (not a term of affection, but rather a cost of living adjustments), but also – and this is my absolute favourite – provides academics with a salary increment if they agree to a vasectomy or hysterectomy (conditions apply with respect to age, age of spouse, and number of children).

Basically, all these countries have highly centralized bureaucratic systems regulating institutional spending and pay, and all of them have a hard time treating money as fungible.  This creates all sorts of situations that look pretty inane on the outside, but if you block out the details it’s still just a story of institutions maximizing revenue wherever possible (which usually means meeting market demand), and paying professors whatever they can to retain talent (which can mean all sorts of things).

Still, it makes the American practice of paying profs for nine months and letting them make up the difference on research grants seem pretty simple by comparison.

September 03

One Lens for Viewing “Administrative Bloat”

The Globe’s Gary Mason wrote an interesting article yesterday about the Gupta resignation.  Actually, let me qualify: he wrote a very odd article, which ignored basically everything his Globe colleagues Simona Chiose and Frances Bula had reported the previous week, in order to peddle a tale in which the UBC Board fired Gupta for wanting to reduce administrative costs. This, frankly, sounds insane.  But Mason’s article did include some very eye-opening statistics on the increase of administrative staff at UBC over the past few years – such as the fact that, between 2009-10 and 2014-15, professional administrative staff numbers increased by 737, while academic staff numbers increased by only 28.  Eye-opening stuff.

And so, this seems as good a time as any to start sharing some of the institution-by-institution statistics on administrative & support (A&S) staff I’ve been putting together, which I think you will find kind of interesting.  But before I do that, I want to show you some national-level data that is of interest.  Not on actual staff numbers, mind you – that data doesn’t exist nationally.  However, through the annual CAUBO/Statscan Financial Information of Universities and Colleges (FIUC) survey, we can track how much we pay staff in various university functions.  And that gives us a way to look at where, within the university, administrative growth is occurring.

FIUC tracks both “academic” salaries and “other” (i.e. A&S) salaries across seven categories: “Instruction & Non-Sponsored Research” (i.e. at the faculty level); “Non-Credit Instruction” (i.e. cont. ed); “Library, Computing, and Communications”; “Physical Plant”; “Student Services”; “External Relations” (i.e. Government Relations plus Advancement); and, “Administration” (i.e. central administration).  Figure 1 shows the distribution of A&S salary expenditures across these different categories for 2013-14.  A little over 32% of total money is spent on faculty, while another 23% is spent in central administration.  Physical plant and student services account for about 11% apiece, while the remaining three areas account for 18% combined.

Figure 1: Distribution of A&S Salaries by Function, in 000s of Dollars, Canada, 2013-14














A zoom-in on the figures for central administration is warranted, as there has been some definitional change over time, which makes time-series analyses a bit tricky.  Back in 1998, the reporting rules were changed in a way that increased reported costs by about 30%.  Then, in 2003, about 15% of this category was hacked-off to create a new category: “external relations” – presumably because institutions wanted to draw a distinction between bits of central administration that increased revenues, and those that consumed them.  Figure 2 shows how that looks, over time.

Figure 2: Expenditure on Administrative & Support Salaries in Central Administration, in 000s of 2014 Real Dollars, Canada














Long story short: from the 80s through to the mid-90s, administrative & support salaries in central administration rose by a little over 3% per year in real terms.  Then, briefly, they fell for a couple of years, before resuming an upward trend.  Ignoring the one-time upward re-adjustment, aggregate A&S salaries in these two areas combined have been rising at 5.3%, after inflation, since 1999.  Which is, you know, a lot.

Now, let’s look at what’s been going on across the university as a whole.  Figure 3 shows changes in total A&S salary paid over time, relative to a 1979 base.  For this graph, I dropped the “non-credit” category (because it’s trivial); for central admin, I’ve both combined it with “external relations”, and corrected for the 1998 definitional change.  Also, for reference, I’ve included two dotted lines, which represent change in student numbers (in red), and change in total academic salary mass (in yellow).

Figure 3: Change in Real Total Academic & Support Salary Spending (1979-80 = 100) by Function, Canada

















Since 1979, student FTEs rose 120%, while academic salary mass doubled, after inflation.  A&S spending in libraries and physical plant rose by considerably less than this, by 27% and 57%, respectively.  A&S spending on “instruction” (that is, faculty & departmental offices) rose almost exactly in tandem with student numbers.  Spending on A&S salaries in central admin and in ICT rose about twice as fast as that, ending the 35-year period at three-and-a-half times their original rate.  But the really huge increases occurred in student services, where expenditures on A&S salaries are now six times as high as they were in 1979.

Over the next couple of weeks, I’ll be able to supplement this picture with institutional data, but the key take-aways for now are as follows: i) “central administration” salaries are growing substantially faster than enrolment and academic salary mass, but they represent less than a quarter of total A&S spending; ii) the largest component of A&S spending – that is, those reporting to academic Deans – is actually growing exactly on pace with enrolment; and, iii) the fastest-growing component of A&S spending is student services.  So, there has been a shift in A&S spending, but it’s not entirely to the bad, unless you’ve got a thing against student services.

More next week.

September 02

Some Basically Awful Graduate Outcomes Data

Yesterday, the Council of Ontario Universities released the results of the Ontario Graduates’ Survey for the class of 2012.  This document is a major source of information regarding employment and income for the province’s university graduates.  And despite the chipperness of the news release (“the best path to a job is still a university degree”), it actually tells a pretty awful story when you do things like, you know, place it in historical context, and adjust the results to account for inflation.

On the employment side, there’s very little to tell here.  Graduates got hit with a baseball bat at the start of the recession, and despite modest improvements in the overall economy, their employment rates have yet to resume anything like their former heights.

Figure 1: Employment Rates at 6-Months and 2-Years After Graduation, by Year of Graduating Class, Ontario














Now those numbers aren’t good, but they basically still say that the overwhelming majority of graduates get some kind of job after graduation.  The numbers vary by program, of course: in health professions, employment rates at both 6-months and 2-years out are close to 100%; in most other fields (Engineering, Humanities, Computer Science), it’s in the high 80s after six months – it’s lowest in the Physical Sciences (85%) and Agriculture/Biological Sciences (82%).

But changes in employment rates are mild compared to what’s been happening with income.  Six months after graduation, the graduating class of 2012 had average income 7% below the class of 2005 (the last class to have been entirely surveyed before the 2008 recession).  Two years after graduation, it had incomes 14% below the 2005 class.

Figure 2: Average Income of Graduates at 6-Months and 2-Years Out, by Graduating Class, in Real 2013/4* Dollars, Ontario














*For comparability, the 6-month figures are converted into real Jan 2013 dollars in order to match the timing of the survey; similarly, the 2-year figures are converted into June 2014 dollars.

This is not simply the case of incomes stagnating after the recession: incomes have continued to deteriorate long after a return to economic growth.  And it’s not restricted to just a few fields of study, either.  Of the 25 fields of study this survey tracks, only one (Computer Science) has seen recent graduates’ incomes rise in real terms since 2005.  Elsewhere, it’s absolute carnage: education graduates’ incomes are down 20%; Humanities and Physical Sciences down 19%; Agriculture/Biology down 18% (proving once again that, in Canada, the “S” in “STEM” doesn’t really belong, labour market-wise).  Even Engineers have seen a real pay cut (albeit by only a modest 3%).

Figure 3: Change in Real Income of Graduates, Class of 2012 vs. Class of 2005, by Time Graduation for Selected Fields of Study














Now, we need to be careful about interpreting this.  Certainly, part of this is about the recession having hit Ontario particularly harshly – other provinces may not see the same pattern.  And in some fields of study – Education for instance – there are demographic factors at work, too (fewer kids, less need of teachers, etc.).  And it’s worth remembering that there has been a huge increase in the number of graduates since 2005, as the double cohort – and later, larger cohorts – moved through the system.  This, as I noted back here, was always likely to affect graduate incomes, because it increased competition for graduate jobs (conceivably, it’s also a product of the new, wider intake, which resulted in a small drop in average academic ability).

But whatever the explanation, this is the story universities need to care about.  Forget tuition or student debt, neither of which is rising in any significant way.  Worry about employment rates.  Worry about income.  The number one reason students go to university, and the number one reason governments fund universities to the extent they do, is because, traditionally, universities have been the best path to career success.  Staying silent about long-term trends, as COU did in yesterday’s release, isn’t helpful, especially if it contributes to a persistent head-in-the-sand unwillingness to proactively tackle the problem.  If the positive career narrative disappears, the whole sector is in deep, deep trouble.

May 27

How High Can Pay Go?

A few months ago, in the midst of a very exciting battle of words at Windsor, I got into an internet discussion with a professor who was absolutely outraged by one of the administration’s proposals: namely, to put a ceiling on professors’ salary, including his, after 30 years of service.

To step back for a moment: collective bargaining agreements generally outline a grid: a series of salary scales (or ladders, or steps – pick your term), generally one for each rank, to determine compensation. Each rank’s scale has a floor and increments, usually corresponding to years of seniority. Occasionally, at places like Alberta, UBC, and Waterloo, the increments are conditioned on an annual merit review, in which case it’s possible for a faculty member to see no increase in a year, or jump more than one step in a single year, but basically the principle is the same. Compensation increases as faculty move up the scale, and the whole scale gains value every year to compensate for cost-of-living.  (For more on the Progression Through the Ranks system, see an earlier post here.)

Anyways, this professor was peeved at the thought that his salary (apparently he had 30 plus years as a full professor) could never grow by more than a cost-of-living increment.  “What’s my incentive to even show up to work?” he asked seriously, while making north of $150,000 per year. I suggested that salary ceilings were pretty normal, but he claimed this was nonsense. So I asked one of our policy analysts, Jonathan Williams, to figure out who was right.

Jonathan reviewed collective agreements across 54 Canadian universities to identify the prevalence of maxima, or ceilings, on scale compensation, and the maximum number of steps for Professors, Associate Professors and Assistant Professors. He then compared results across institution types, using the Maclean’s classifications of medical/doctoral, comprehensive, and undergraduate. Those institutions in our sample, but not in Maclean’s (e.g. Athabasca, Vancouver Island), we have left as “unclassified”. Since this is meant to be a short and convenient morning email, we’ll spare you the more detailed methodology report, but feel free to email us if you’re really curious.

Anyways, turns out the answer is slightly complicated, because while most collective agreements do have ceilings, they don’t always have them for all ranks.  As a result, in Figure 1 we display results not only by institution type, but also by rank. Across all institutions, over two-thirds have ceilings for Full Professors, and four-out-of-five have them for Assistant Professors.

Figure 1 – Percentage of Institutions With Pay Ceilings, by Academic Rank and Type of Institution
















Now, Figure 1 simply measures the number of collective agreements where there is some kind of pay maxima.  In practice, however, some of these scales have so many steps that almost no one will ever hit the top of the scale. For example, there are some collective agreements where there are more than 35 increments on the pay scale for Full Professors. Given that most people don’t make Full Professor until at least their mid-40s, only 80 year-olds would ever hit such a maxima (which, even with the elimination of mandatory retirement, seems a bit extreme). We therefore did a second analysis in which we counted scales containing 30 increments, or more, (i.e. incorporating 30 years of service, or more), as being equivalent to not having a ceiling at all.

Figure 2 – Percentage of Institutions With Pay Ceilings, by Academic Rank and Type of Institution (Assuming 30+ Years Per Rank Equivalent to no Ceiling)
















Across all institutions, this brings down the percentage with maxima by about ten percentage points. However, the effect is concentrated at comprehensive universities (like Windsor, as it happens). Of the 15 institutions where 30 or more steps existed, ten were in place at comprehensives.

However, these are, to some extent, outliers. If we look at the mean number of increments per rank, the numbers are considerably lower – most agreements have between 14 and 20 increments per rank – which is probably absurdly high for Assistant Profs, but are otherwise about right.

Figure 3 – Mean Number of Pay Increments, by Academic Rank and Type of Institution















We can also examine these patterns by region.  Ontario turns out to have the fewest institutions with maxima, especially when it comes to Assistant and Associate Professors, as shown in Figure 4. Institutions in Ontario also, on average, have about five more pay increments per scale than institutions in the rest of the country.

Figure 4 – Percentage of Institutions With Pay Ceilings, by Academic Rank and Region














It should be noted here that shorter times to maxima are not necessarily positive or negative, either for institutions or faculty associations. Agreements with fewer increments tend to have larger increases per increment, meaning professors may earn higher salaries more quickly. Conversely, more years may reflect more modest annual increments.

So there you have it.  Most institutions do in fact have pay grids with ceilings, although in some cases these are more abstract than real. This was a lot of effort to settle an 8-month old internet argument, but perhaps some of you will find it useful.


April 21

Lessons From Western: One of Us

One of the most extraordinary moments last week in the run-up to the Senate non-confidence vote on Western President Amit Chakma’s tenure was the publication of an opinion piece in the Western News – the official organ of the university, no less – entitled, “Nothing personal, but it’s time to go”.  Written by two professors in the English Department, it is a rhetorically excellent savaging of President Chakma.  Read it, it’s worth it.

Although well-written, I was particularly struck by the thinness of the litany of complaints.  There was a certain, and surprising, inchoateness to the anger. Yes, it was bone-headed of Chakma to take the second year’s worth of pay, but that’s not what’s driving criticism here.  The authors clearly believe that, at Western, things are going to hell in a handbasket in a way they aren’t elsewhere.  And they have no doubt that Chakma and his executive team are the reason it is worse at Western. Given the article’s claims, it would seem that Chakma’s most unforgivable sin is that he does not – indeed, cannot – understand Western because he is from somewhere else.  To the authors, he is simply not “one of us”  (personally, I found it difficult to read the article without thinking of that famous scene from the 1932 film, Freaks).

Now, sometimes the “not one of us” argument has some force.  When, after running into financial trouble, Cooper Union President Jamshed Barucha – formerly of Dartmouth and Tufts  decided to introduce tuition at the erstwhile free-tuition school, the issue of his sense of attachment to the institution could genuinely be called into question.  Free tuition was part of the school’s identity, and you don’t screw around with that lightly (ht to Keegan Goodman for the analogy).

But, to put it mildly, I don’t see anything of that magnitude happening at Western.  Universities are pretty isomorphic; the amount of local knowledge needed to run one is really small, unless it is really an outstanding and highly particular university (MIT, say).  I grant that under Chakma, the strategic direction of the institution has changed for the blander (see here for my take on the banality of its recent strategic planning exercise); but let’s face it, it’s strategic directions were pretty bland to begin with.  Apart from a stronger-than-average commitment to the undergraduate student experience, Western isn’t a particularly distinctive institution.  The one time it had a chance to be really distinctive – when its Waterloo engineering extension campus came up with a program for co-op education – it cut the campus loose because that co-op stuff was self-evidently second-rate, and had no future at a serious university.

My guess is that the “not one of us” line-of-attack is actually another way of saying: “if you’d been here longer, you’d at least act as if you understood the concerns of those in the institution who are doing less well under this administration than under the previous one”.  In other words, there seem to have been significant weaknesses in communication and consensus-building on campus.  On its own, these were probably not serious enough to come to the fore and become a political issue that anyone outside the campus would care about.  But Chakma and the Board, through the incomprehensible decision to allow Chakma to cash his leave-year pay while sitting as President, effectively handed a large, spiked club to anyone within the institution who had a grievance.  The result is articles like this one, which have substantial (though obviously not universal) resonance on campus.  Chakma survived the vote last Friday, but the damage done to his Presidency may be permanent.

April 20

Lessons from Western: Presidential Administrative Leave

Last Friday, Western’s President Amit Chakma barely scraped through a non-confidence vote following his decision to take pay in lieu of administrative leave when he started his second term, a move which pushed his pay to $967,000 last year.  The story has resonated widely across academia, so it seems worth a couple days of blogs to unpack some of the issues

With specific respect to pay, the real issue seems to be what to do with this “leave year” that all Presidents have apparently negotiated.  It would appear to be common practice for presidents to have five-year terms, supplemented by a sixth year of “leave” during which time the President stays on the payroll at his or her former salary.  What seems to get people tied in knots is not so much the base salary (that causes grumbling, but not non-confidence votes), but rather the way the “leave year” gets used.

It’s worth looking at a couple of other Presidential pay packages that didn’t raise eyebrows in order to understand why Chakma’s actions were perceived as so horrible.  Absolutely nobody seems to have ever made a fuss about Presidents who take their leave year and return to the professoriate.  Academics apparently feel that as long as a President appears to be doing duty as an academic, the fact that he or she is making between two and three times normal professorial pay is an acceptable perk of being a President.  Also, people don’t seem to mind if a President defers the leave year if a second term is earned. Arvind Gupta’s contract at UBC is quite clear on this: if re-appointed, he gets to take the leave year at the end of his second term (also clear: he won’t get to earn a second year of leave if he is re-appointed. One and done).

Chakma’s former boss at Waterloo, David Johnston, cashed-out at least one year of leave, in full, when he became Governor General in September 2010 – the Sunshine List records him as having received slightly more than $1 million that year.  Nobody raised an eyebrow then, so it’s probably fair to say that either Johnston gets a pass because he looks like everyone’s cuddliest granddad, or nobody think it’s a problem to cash out that leave year if you suddenly leave the university (or both).

Another way leave years have been used is to be folded into later pay packages.  At least one President (Sara Diamond at OCAD University) had her leave year salary divided into five, and spread over her second term.  Again, this has not been subject to any criticism, so far as I know – in which case, we can deduce that people don’t actually have a problem with converting leave years to salary, as long as they don’t do it all at once.

The issue, then, is a pretty specific one: total compensation is not a problem, leave years are not a problem, and converting leave years into cash is not a problem, provided you don’t cash the leave all at once as a sitting President.  And honestly, that’s not a test most should find too difficult to meet.

Basically, it comes down to the nature of the leave year.  If both sides view it as equivalent to a sabbatical, or as severance, it’s OK.  If it is viewed just as a way to increase compensation over the course of a contract (i.e. spreading $2.2 million over six years instead of five) then you’re probably heading out onto thin ice.

April 07

Not Mutually Exclusive

One often hears university administrators say things like: “if we don’t reduce growth in salary mass, we’re all in trouble”.  Sometimes, the word “academic” gets thrown in front of salaries, for good measure.  In response, one often hears faculty unions say: “but academic salaries are down as a proportion of operating spending since 1992”, or “salaries as a proportion of the budget have remained constant in recent years”, and conclude from this that salaries can’t possibly be the problem.

How should we evaluate these claims?  Well, first off, we should acknowledge that these are all true statements.  Let’s start with the question of academic salaries as a proportion of operating budgets.  Between 1990 and 2002, these did fall substantially, from about 39% of total operating expenditure to about 30%.  But it has remained more or less constant thereafter.  There were multiple reasons for this fall, the main one being that academic staff numbers actually fell during the mid-90s under the effects of that decade’s austerity, which meant that absolute dollars spent on staff were frozen from about 1992 to 1999.

Figure 1: Academic Salaries as a Percentage of Total Operating Expenditures, 1991-2012














Of course, one countervailing factor here is that a greater proportion of compensation is now going out in the form of benefits (mainly pensions) rather than salaries.  So sometimes, instead of looking just at academic salaries, we want to look at total compensation – and not just for academics, but for all employees.  Figure 2 shows all compensation as a percentage of operating budgets.  This, too fell in the 90s, but is just now starting to edge up a bit again, to around 75% of total spending.

Figure 2: Total Spending on Compensation as a Percentage of Operating Budgets, 1991-2012














Now, looking at these graphs, you could very well ask: “so what’s the problem?”  As indeed many faculty unions do.  Well, the answer is that these graphs represent fractions: expenditures as a percentage of total expenditures.  But it’s worth looking at both the numerator and the denominator here.  Figure 3 shows what has been happening to total operating expenditures in Canada.  Between 1998 and 2012, expenditures increased by 67% after inflation, or an average of 4.7% per annum in real dollars.

Figure 3: Total Operating Expenditures and Expenditures on Compensation, in $2012, 1991-2012














So it’s quite possible to look at Figure 2 and say, “up to 2012, staff compensation was in no way a cause of financial hardship to universities”.  However, to go from here, to saying: “therefore we don’t need to worry about compensation, and things can continue on as before”, requires one to believe that university revenues will continue growing at 4.7% per year, in real dollars.  And flat out, that hasn’t been happening, and isn’t going to happen anytime soon.

Take a look at the last couple rounds of provincial budgets.  On average, the 2013-14 budgets saw funding go down by 0.7%.  The 2014-15 round saw them increase by about $7 million nationally (or 0.066%).  And that’s in nominal terms – in real terms, that’s a decrease of about 4%.  Now, tuition increases of 6.6% over two years makes up for that a bit, but at best – even including the effects of rising international student numbers – we’re probably looking at increases in operating budgets of about 1.5% in the last two years, and in all likelihood for the foreseeable future ( and this year will almost certainly be less than that).

So, assuming 4% increases in compensation costs, and 1.5% increases in income, what does Figure 2 look like, extended out a couple of years?  Figure 4 tells the tale.

Figure 4: Total Spending on Compensation as a Percentage of Operating Budgets, 1991-2017 (Projected)














The result, simply, is that at present rates of expenditure and income growth, compensation will rise from 75% of the budget in 2012, to 85% of the budget in 2017.  Or, put another way, to make room for compensation growth, universities will have to cut their non-salary budget items by nearly a third over the next few years.

And that’s why, despite faculty unions being correct about the salary growth having been affordable up to now, the evidence still points to present salary mass growth as being unsustainable going forward.  The two stores are not mutually exclusive.

January 22

Classroom Economics (Part 4)

Yesterday we looked at ways to get the teaching budget down.  Today, we’re going to look at the other half of the cost equation: all that overhead.  And we’re going to look at it by asking the question: how big a cut in overhead would it take to equal the effect of replacing 20% of your credit hours with sessionals (which, as we saw yesterday, reduces overall teaching loads by 17%)?

Recall the equation: X = aϒ/(b+c), where “X” is the total number of credit hours a professor must teach each year (a credit hour here meaning one student sitting in one course for one term), “ϒ” is average compensation per professor, “a” is the overhead required to support each professor, “b” is the government grant per student credit hour, and “c” is the tuition revenue per credit hour.  Given that equation, the answer to our question is simple: you need to drop overhead by 17%.  But how might one go about achieving a cut that size?

On average across Canada, universities spend about $16,300 per FTE student on things other than academic staff compensation (yes, really).  Over half of that – 54% or so – goes to non-academic staff compensation: the professional staff, the cleaners, the lab techs, the janitors, etc.  They’re all in there.  No other single item comes close.  The table below shows the full breakdown.  Most of those categories are pretty self-explanatory, except perhaps for “other” operational expenditures (which is mostly long-term space rental and property taxes, with a few miscellanies thrown in for good measure).
















Now imagine you want to achieve your 17% reduction without firing anyone, or trying to get them to give back salary – what are your options?  Well, to start with, it’s important to acknowledge there’s a bunch of things in here that are difficult to touch.  Scholarships, for instance.  And not paying interest isn’t too smart.

So that leaves only 35.8% of the whole non-academic budget.  Squeezing 17% out of that would be pretty horrific; it would require cuts of as close to 50% as makes no odds.  What do you think our universities would look like with half the library acquisition budget gone?  Half the travel and communications budget gone?  Half the budget for light and heat gone?  It’s simply not an option.

All of this, of course, means that balancing budgets this way leaves you with very few options other than reducing labour costs.  Say you had a way to reduce your non-academic staff costs by 10% – either by wage rollbacks or layoffs, or some combination of the two: you’d still have to find a way to squeeze 20% out of the rest of the non-academic budget to make the math work.  And that would be tough.

Bottom line: there is no easy salvation here.  Any serious reduction in costs on this side will require some bloodletting in terms of staff.  That’s never easy to stomach.

My wrap-up on all this tomorrow.

Page 1 of 512345