Speaking Out: Faculty Salaries: More to Know

I applaud this year's Committee Report [on the Economic Status of the Faculty, Almanac May 13]. The Committee has done well to point out:

The need for greater informational transparency on faculty salaries.
The need to look at faculty salaries, in real terms, after appropriate adjustment for the CPI.*
The large discrepancies between schools and within schools.

It is disappointing that the University is not willing to be more open about these issues. That promotes an "us against them" view of the world which is damaging to the spirit of the faculty and to governance of the University.

It is difficult to reconcile equity with market forces. This is true in the world at large, academia in general, and within the University. As an economist, I cannot deny that market forces are important, but proper allocation of resources on the basis of the market requires:

1. a proper income distribution

2. information

3. a long run perspective.

These underlying assumptions are not met at the University.

In the case of the University, the proper distribution of income lies in the incomes of the schools and in their ability to bid for top quality people. In the contest of the University's responsibility center accounting system where each school is supposed to make it on its own resources, some units are very much better off than others. Perhaps that is as it should be from a market view, but is that okay from the perspective of "One University"? A strong School of Arts and Sciences is an essential of a strong University. But, at Penn, SAS is poor. It is not surprising that the School of Arts and Sciences shortchanges its faculty. They do not have the money to do otherwise. It is unlikely that we can develop a quality SAS unless we take steps to change its unfavorable financial balance.

The one-sidedness of the information availablethe dean and department chairmen know about salaries, faculty members do notresults in unfairness and misallocation of resources. Does the University really intend to take advantage of faculty members' ignorance of the prevailing salary scale?

The failure of the parties involved to take a long run perspective takes the form of rewarding activities that have short run market visibility. Huge premiums are being paid for people who do splashy research in currently fashionable fields. Faculty members with long range research programs, or with interests in teaching and service activities, have less market exposure and, therefore, less chance to come up with outside offers. This distorts priorities, at least from what I thought they were.

Because salary increases are much dependent on presenting credible outside offers, the older professor becomes less able to use market forces as a way to achieve salary increases. The consequence is compression in salaries as between the younger people who are "marketable" and the older people who, even if they are able to get outside offers, are less likely to take them.

The Committee is moving in the right direction. I encourage you to extend your research into more detail, on the departmental level. I urge you to insist that information on salaries be made available to the Committee and that better and more realistic information be distributed to the faculty at large.

F. Gerard Adams,
Professor of Economics


* Despite recent discussions that the CPI overrates inflation, my colleagues and I are not fully convinced. If there is bias, it is only 0.3% to 0.4%, not 1.1% as the CPI Combustion suggested. Moreover, what is relevant is not the general CPI, but one that specifically affects faculty. The problem is that faculty buy much larger quantities of educational materials (books, periodicals, etc.), travel, and health services, than the typical lower middle income CPI respondent. I suspect that the effective CPI for university professors is increasing more rapidly than for the public in general. This is something the Committee might want to look into. (Is there a foundation that would support this kind of research?)

Speaking Out welcomes reader contributions. Short timely letters on University issues can be accepted Thursday noon for the following Tuesday's issue, subject to right-of-reply guidelines. Advance notice of intention to submit is appreciated.Ed.

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