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Category: Budgets

Accusations About Operating Surpluses

One interesting development in labour-management relations over the past few years has been the increasing tendency of academic unions to claim that administration is spending “too much” on capital, and is raiding the operating budget (i.e. salaries) to pay for it.  It’s possible that there is some truth to this in some places, but on the whole there seems to be a misunderstanding about the difference between how the terms “operating” and “capital” are defined in budgets, and how they

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February 6, 2015 4 Comments

Classroom Economics (The End)

So we spent Monday looking at the economic basics of classroom and teaching loads, and Tuesday looking at how difficult it is to improve the situation by increases in tuition or government grants.  Wednesday we saw that reducing average academic compensation (presumably via increasing the proportion of credits taught by adjuncts) can be quite effective in reducing teaching loads, while on Thursday we saw how trying to achieve a similar effect through attacking costs other than academic compensation would require enormously painful – and probably

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January 23, 2015 2 Comments

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

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January 22, 2015 No Comments

Classroom Economics (Part 3)

(If you’re just tuning in today, you may want to catch up on Part 1 and Part 2) Back to our 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

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January 21, 2015 9 Comments

Classroom Economics (Part 2)

Yesterday, I introduced the equation X = aϒ/(b+c) as a way of setting overall teaching loads. Let’s now use this to understand how funding parameters drive overall teaching loads. Assume the following starting parameters:       Where a credit hour = 1 student in 1 class for 1 semester. Here’s the most obvious way it works.  Let’s say the government decides to increase funding by 10%, from $600 to $660 (which would be huge – a far larger move

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January 20, 2015 4 Comments

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One Thought to Start Your Day is our founder and CEO Alex Usher’s popular daily blog, brimming with up-to-the-minute insights and informed opinions on today’s higher education industry.

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