A Depressing Stat

I saw a presentation on C-SPAN this week, of some data about higher education in America.

Here’s the stat that leaped out at me: since 1988, the average salary of full-time faculty across all ranks at institutions of higher learning in the U.S. has risen 7.5%. The fastest-growing rank was that of instructor, which has risen 25%.

Compare these numbers with the inflation rate from January 1988 through January 2005: 65%. (You can get these numbers for any two dates from 1914 to the present at http://inflationdata.com/Inflation/Inflation_Rate/InflationCalculator.asp.)

I’m on the verge of speculating about explanations here, but will bite my tongue to see if anyone else wishes to speculate first. Regardless of the explanation, however, these numbers are disturbing.


A Depressing Stat — 7 Comments

  1. Are you certain that the C-Span figures weren’t adjusted for inflation? Figures on wage changes usually are, since the numbers just aren’t meaningful otherwise.

  2. Dear Kvanvig:

    The numbers where not adjusted by inflation.

    According to the American Association of University Professors, for a base
    of 100 in 1983, the faculty salaries have grown up to 229.5 in 2004-5
    while the consumer price index has grown up to 191.8, implying a real increase
    in the wage of faculty of 19.6%, nearly a 1% raise in REAL wage per year.

    If we take 1988 as the base year, the results are similar: roughly a 1% increase
    in REAL wage per year.

    A series can be found at the bottom of the following page of the
    Chronicle of Higher Education:


    It is important to notice that these two series (wages and CPI) induce an important downward bias in the REAL increase of wages:

    1) CPI is well known by economist to overestimate inflation (since this blog is about epistemology, not economics, I would skip the boring details).

    2) Health cost and other non-wage compensation have grown substantiall faster than the official wage.

    Considering these two facts, it is likely that the TOTAL compensation of the average faculty has grown around 2% per year in REAL terms over the last 20 years.

    This observation is also true (with small changes) if you control for rank (professor versus assistant, etc): all ranks have increase their real wages.

    Further evidence from labor economists suggests that this increase has been going on at least since the early 60s.

    Moreover, faculty professors have done way better than the average worker in the U.S. economy, whose real wage has gone up only around a third of the increase of faculty wages.

    I know this observation probably goes against the view of the world of many professors, but the empirical evidence overwhelmingly suggest that last 25 years have been a boom time for faculty wages in real terms.

  3. OK, so if I follow the adjusted calculations, academics on average are paid a bit better now than in 1988 and that, again on average, we’re better off than lots of other folks (always beware the “things could be a lot worse” response to the problem of evil). I wonder, however, whether a big chunk of the improvement hasn’t come because of big increases in areas other than the humanities. Adjusted for inflation (thanks for the link to the inflation calculator, by the way) starting salaries for Assistant Professors in the humanities at my institution are about the same as they were when I started out in 1988. On the other hand, starting salaries for tenure-track positions in business are through the roof (I’ve heard $80K is not unheard of). It’s so bad that there are serious inversions between first-year Assistant Professors and Professors, and I’ve heard from my colleagues in business that this is a widespread problem. So do we have any reason to believe that, on average and in real terms, philosophers are better paid now than in 1988?

  4. Dear Andrew:

    Several comments with respect to your post.

    First, it is not only that academics are “better off than lots of other folks” as you say. The point is that the relative position of academics has improved over the last 20 or so years. Academics as a group are not only doing better in absolute terms (they make more money), is that the ratio between their average wage and the average worker wage has increased.
    Second, you may have a point regarding inequality. There are two types of components driving inequality: inequality between groups (i.e. the inequality between business school professors and philosophers) and inequality within groups (i.e. the inequality between the “stars” among philosophy professors and “regular” philosophy professors).
    I could not find any systematic evidence regarding those differences among faculty. I know however the picture for the U.S. economy as a whole. The big increase in inequality in the 80s and 90s was driven both by inequality between groups (for example lawyers having a much better time than truck drivers) and within groups (top lawyers increasing their wage much more than the average lawyer).

    My anecdotal evidence about the academic world in the U.S. is that both forms of inequality have substantially increased. It is true that business school professors make more money (sorry to bring this fact to your attention, but the starting salary in good finance department for an assistant professor can be $150k including summer money, I know starting assistant professors in top schools that make $80k in a Mathematics departments). However, I am sure that if I had access to good within group data, I would be able to show that the “star” philosophers, let’s say at NYU or at Princeton, are making substantially more money now that 20 years ago.

    An important observation that gives plausability to my argument is to note that the average real wage at a place like Princeton (where they do not have a business school to distort data) has increased quite a bit.

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