Re: overbuilding at Universities.

I think it is true that many Universities overbuild, and more over that they build the “wrong” kinds of facilities, at least from the point of view of educational quality. Too many student centers and stadiums and not enough modern laboratories and classrooms.

Still, this is a market driven behavior. Universities are in competition for students, and students make their decisions based on very little information, usually only a short campus visit and the US News rankings. It is much easier to wow them with a lot of shiny new buildings than with competent, well supported professors. This is compounded by the fact that US News rankings are largely driven by selectivity, and selectivity is determined by how many applications you can attract for each spot in the freshman class (again, better build that new campus center).

Still, building programs don’t have a lot to do with tuition rates. As someone said earlier, building programs are largely funded by alumni giving. It’s much easier to get someone to give a huge chuck of cash if they get their name on a building, so I doubt much of this could be diverted to other areas of the budget (i.e. tuition reduction). Since new buildings are generally more easy to maintain and more energy efficient than the old ones they replace, I doubt there’s much impact on the bottom line from the maintenance costs for these new buildings.

Re: faculty salaries, six figures is the land of the “stars” in the humanities and social sciences (business, law, and medicine pay much better, for obvious reasons– if they didn’t, then no one would take those jobs). In the humanities, far more typical is the full prof with 25 years of experience and a couple of published books making in the high 60s to low 70s– or even as low as the mid-50s– and working 60 hours per week. In the past 5 years, there have been a lot of years with either frozen salaries (0% raise, in other words) or anemic 2% raises.

Rest assured, universities are doing everything they can to cut labor costs: namely, they are resorting more and more to hiring PhD-holding faculty as part-timers, often making as little as $1500 per course. It’s not uncommon, in other words, for someone to teach 4-5 classes per semester plus summer, and make under $20k per year and with zero benefits. Why they are willing to do so, I’ll never know; but in fact this is a growing trend that more than offsets the “sinecure” phenomenon so far as costs are concerned.

The “sinecure” at state universities is largely driven by trying to compete with the Harvards and Yales and Stanfords. The elite privates stay at the top by attracting the leaders in their fields, and keeping them– and a Harvard historian like the Neoconservative apologist Niall Ferguson (reportedly earning over $300k to teach a couple of classes per year) can move pretty easily, so it’s imperative to sweeten the pot from time to time. The state universities can’t match THAT salary, but see their elite-level salary range driven up in trying to retain their star faculty. But as I said, this phenomenon is certainly offset in the state systems by coupling “sinecures” with corporate-style part-timers and temps.

(Anyway, in that situation it’s hardly fair to use the word sinecure: those top-tier folks weren’t paid to teach, but to publish. So long as they’re publishing, they’re doing what they were paid to do).

Chances are there aren’t any Niall Ferguson types at your own local university; leaving aside the contingent faculty, far more common is the $42k assistant professor, the $51k associate professor, and the $68k full professor with 25 years of experience.

There are some other things driving up costs (and some of it relates to faculty): medical benefits for staff and, recently, dramatically rising energy costs. Almost every university is seeing its medical costs go up by 10% or more every year. Generally, about 1/4 or so of that will be passed on to the staff; i.e., university faculty are seeing their insurance benefits get more expensive like every other full-time worker. That still leaves, in effect, a 7% or so cost increase for health-care every single year. For small private colleges, that’s devastating.

As for energy costs: I taught at a small liberal arts college that saw a November gas bill of $14k go up to $38k the following November. Project that same percentage increase onto a bigger university, and we’re talking a lot of money. Even the $24k increase my college saw is 1/2 a faculty position, including all benefits: yes, that’s right, the average faculty member was entirely paid for, salary and all benefits, for under $50k per year.

No matter how hard they try, less wealthy colleges can’t find a way to compete with their rich “peers” like Harvard, and contain their medical and energy costs, without passing costs on to the students. And state universities are under a special pressure because they are seeing their support from the state failing to keep up with those rising costs. Luckily, they can save some of the money by using contingent faculty (who are crazy for accepting such treatment, but that’s another issue), but much of it still has to be passed on to the students.

I’d put it under the broader framework of what Jacob Hacker calls “The Great Risk Shift”: ordinary people are expected to pay the true costs of their own retirement, medical care, etc., and yes, university costs. Because make no mistake: it ACTUALLY costs far more in toto to educate a university student than the student is paying, even WITH the rising costs. The students are still being substantially carried by “handouts” from government and charitable donors (alumni, etc.). But the trend in university attendance as well as everything else is to pass on true costs to ordinary citizens, and the ordinary citizens don’t much like it! (But so far they haven’t taken the trouble to organize to fight against it).

Incidentally, I was an American academic, an English prof making $42k per year after 9 years of experience and a couple of books. I had a fine life, no complaints, but it wasn’t the lap of luxury like it’s so often presented. But then I was just a 75-hour per week non-star, happy not to be contingent labor.

I am, though, glad I had a chance to leave American academia for the greener pastures of Asian academia, where the society actually values their profs– my first year’s salary was roughly 3x what I earned in America, while my cost of living is about 85% of what it was in America. It helps that medical care is no more than 40% as expensive here as it is in America.

Which raises another point: so far, few enough white Americans like myself are willing to leave for Asia, but ultimately mid-level American universities not only have to compete against their elite “peers,” but they also have to compete against Asia. So far as filling the classes is concerned, no one will miss me: my $42k salary can be shed by hiring part-timers to teach 8 classes for $12k/ no benefits. But that option will quickly move any university who takes it too often down the rankings, and will raise the question of what students actually want to attend a school that is quickly going down the rankings?

1) Just about everyone needs a bachelor degree now, there a fixed number of schools.

2) Inflation averages in physical goods and services. Production of physical goods can be outsourced and automated. Services cannot be. Schools are service-intensive and along with other non-outsourceable service areas, have above average inflation of prices.

At some point, entrepreneurs will figure out that every Economics 101 class room does not need a $100k/year PhD in it, and that there are better ways to do it profitably. I saw an article about a web site that employs Indian scholars that will do unlimited tutoring over the Internet for $100/month using IM, Skype, teleconferencing, etc. How about open source textbooks available for free on the Internet? Wikipedia is heading that way already. It’s only a matter of time.

And for all that manpower, they still managed to screw up my 403b when I was there…

Generally speaking, neither faculty nor staff get paid especially well compared to the private sector. That’s my experience at a major university, anyway. Raises are difficult to come by and they are in small increments that don’t even keep up with CPI. Higher Ed costs definitely need to be examined but I don’t think the pay that university personnel receive is the problem. The big problem here seems to be that state funding doesn’t cover operating costs from year to year and they have to raise tuition to make ends meet. With that said, the university bears some responsibility in that WRT budget.

As for the building spree, there is one going on here too. Some of it is absolutely necessary, while some isn’t. However, most building here is funded by private donors and does not come from tuition at all. Maintenance costs may increase on the new buildings and THAT would come from the general funds, but the construction itself is not the reason for skyrocketing tuition here (and it IS skyrocketing– it has douibled in 10 years).