Yesterday, we saw that Canadian student-faculty ratios rose by 24% between 1992 and 2010, even though operating grants per student went up by 20%.  The cause, it turned out, was a combination of individual academic salaries rising, while aggregate academic wages fell, as a proportion of operating grants.  What we didn’t do yesterday was ponder why academic salary mass didn’t keep up with operating grants, and where the money went as a result.

Figure 1 – Operating Expenditures by Category, 1992-2010, in Real 2011 Dollars

 

 

 

 

 

 

 

Figure 1 shows that the two biggest categories under operating expenditures are “academic salaries”, and “other salaries and wages”.  Throw in benefits – compensation under another name – and these three categories make up about two-thirds of total operating expenditures.

With so many categories, it’s a little difficult to see exactly how much each category increased over time in Figure 1, so in Figure 2 we simply show growth indexed to 1992 levels.

Figure 2 – Growth in Expenditure Categories, 1992=100

 

 

 

 

 

 

 

Of the six major expenditure categories, academic salaries increased the least, by some margin – just 37% in real dollars, not quite enough to keep up with growth in student numbers.  Non-academic salaries – the next largest category – increased by 70%.  But growth for benefits, “other instruction & research”, and “other” (a catch-all category including travel, utilities, and externally contracted services) was all over 100%.

For reasons of legibility, Figure 2 excludes two line items that were in Figure 1.  The first is library expenditures, which are actually pretty trivial in the big picture (1.7% of operating expenditures).  The other is scholarships, which are excluded because they would have broken the scale.  Here’s what happened to scholarships between 1992 and 2010:

Figure 3 – Total Scholarships Expenditures, 1992-2010, in 2011 Dollars

 

 

 

 

 

 

 

This is one of those things universities just don’t get credit for.  Scholarships (a term which here includes both need and merit-based aid) increased by more than seven-fold, after inflation.  Based on previous research HESA has conducted, I estimate that between 55 and 60% of this money went to graduate students, which is consistent with large institutions’ increasing emphasis on research and graduate studies.

Another way to look at this question is to look simply at changing shares of total operating income, which we do below in Figure 4.

Figure 4 – Change in Shares of Operating Budgets by Category, 1992-2010

 

 

 

 

 

 

 

Although spending in all categories rose between 1990-2012, some spending categories “gained share”, while others lost it.  The biggest losers were faculty, as academic salary mass fell by 9 percentage points as a share of the operating budget.  Had they kept their share constant, there would have been another $1.6 billion in money for academic salaries.

But the “culprits” were not the oft-scapegoated bogeymen of “administration”.   Rather, the line items that significantly gained share were actually scholarships, non-wage benefits, and “other” (mainly utilities and externally contracted services).  This is not a story often heard on campus.  But it’s the truth.