The University Record, November 5, 1997

Faculty Staffing and Salaries: The Long View*

By Bruce Oakley, LS&A

*(Dedicated to Professor Richard Brandt whose lifelong joy of moral inquiry earlier inspired a Swarthmore Freshman.)

Salary comparisons with other institutions can be misleading when they fail to factor in both the local cost of living and the fringe benefits. For example, an associate professor on a 9-month appointment would make an average of $5,200 more per year at Stanford than at the University of Michigan. Yet $5,200 won't go far toward paying the mortgage on a modest (sic) $400,000 house in Palo Alto. While the cost of living is a familiar concern, the package of fringe benefits also weighs in. Associate pro fessors at Michigan State and Illinois-Urbana make the same mean salary, yet the fringe benefits add $8,000 more in total compensation for those in East Lansing (31 percent vs. 15 percent of salary).

Appraisals of faculty salaries within our own University are challenging because our units have histories of differing practices and resources. The medical community has a commendable tradition of indirectly supporting vital faculty aspirations elsewher e in the University. Likewise, by sharing its enormous tuition assets, LS&A has also sustained fragile but crucial academic programs. Yet, predictably VCM is unfettering the urge to retain all of "our" research, clinical and tuition revenues. Accountab ility under VCM is a positive feature, but the probable fragmentation into parochial concerns and the increasing disparity in wealth are troublesome. As the present historical assessment unfolds, you may come to share my concern that coping with the many pressing needs of the short-term has deflected us from optimizing our shared objectives over the long-term.

This essay is restricted to faculty staffing and salary comparisons within the Ann Arbor campus since it is our prevailing frame of reference. The staffing and salary data come from "An Analysis of Salaries Paid to the University of Michigan Staff and G raduate Student Teaching Assistants" compiled by the Human Resources Information Services (647-3446). This yearly publication breaks down staffing and salary structure to the level of departments. I begin with a brief look at staffing differentials over the years, shift to a few observations on factors influencing salary, and close by suggesting that some current salary differentials across units may be carryovers from earlier generations of faculty. Such things matter since even in academe, money is t he currency of appreciation. Which cherubic assistant professors now appreciate that today's slender salary differential may later billow into envy?

The apportionment of faculty among the major disciplines should reflect the priorities of those at the top. The staffing data selected from the years 1977, 1987 and 1997 raise questions about the continuity of such oversight (Table 1).

In the past 20 years the number of tenure track Business faculty has increased by 104 percent. Law has been static and numerically dominated by full professors. After a decade of ebb and stasis, LS&A expanded on two fronts by adding a net of 69 assista nt professors and more than 200 lecturers. From 1977-97 LS&A faculty increased by 44 percent; Medical faculty grew by 58 percent, mainly as a result of increased numbers of assistant professors. One wonders if these staffing changes are the outcomes int ended by those at the top charged with the long view.

The consensus appraisal is that the acquisition of biological knowledge will be the preeminent scientific achievement of the next century. Yet, with the exception of the Medical School, academic units with major biological components have experienced re ductions in faculty staffing over the past 20 years. These include the Department of Biology (-22 percent), the College of Pharmacy (-12 percent) and the following Schools: Dentistry (-33 percent), Natural Resources and Environment (-21 percent), Public Health (-12 percent), and Nursing (-27 percent). It takes some imagination to view these recisions as the product of strategic planning intended to catapult us to the cutting edge of biological research in the 21st century.

The data in Table 2 are most readily interpreted by separating out several factors that contribute to salary structure. First, one can estimate the effects of the compounding that occurs when annual increments to departments are given as a percentage of each department's salary base. Over the years the compounding of such increments would lift the salaries of two departments proportionally. For example, in 1976-77 the salaries of full professors of Mathematics were 22 percent higher than those of Biolo gy. Twenty years later the percentage difference was still 22 percent, whereas the dollar spread has widened from $5,576 to $14,592. Hence, perhaps as much as 100 percent of the 1996-97 salary differential can be explained by the effects of compounding a 20 year-old historical salary gap. In LS&A, the compounding of 5.5 percent annual increases would mathematically account for the growth of the median full professor salary from $26,064 to $76,649 over the last 20 years.

Second, one can adjust salaries for inflation. Over the past 20 years LS&A median full professor salaries have only increased by about $6,300 in current dollars. That is, the median 1977 salary had a purchasing power of about $70,350. After accounting for inflation and the mechanical effects of compounding annual salary increases, what remains includes unpublished wages and the effects of market forces.

Medical School published salaries fail to incorporate "off the books wages" like administrative emoluments, fees from clinical payment plans, and wages that extend the salary beyond the level capped by the maximum amount NIH will pay a funded researcher ($125,000). For example, $40,664 may substantially underestimate the 1997 total wage differential between full professors of Internal Medicine and full professors of Anatomy and Cell Biology. The salary structure in LS&A is less complex; in general the published salaries represent the total wages professors receive for their 9-month employment period.

Some units, like the Medical School, generally operate by splitting the salary into guaranteed and at-risk components. For example, a published 12-month salary of $100,000 might consist of $20,000 that the individual is expected to generate from NIH gra nts. If NIH funding is lost, replacement funding may be provided for several years from internal sources before the at-risk salary component is either regained or discontinued. With parallel expectations, the College of Engineering anticipates that 20 p ercent of each 9-month salary should be covered by extramural funds. In contrast, intramural sources fully fund 9-month faculty salaries in LS&A.

Salary mavens enjoy repartee over such myths as "market forces," "publish and profit,", and "revenue talks." As to the mythic importance of the need to obtain extramural funding to lift one's salary, consider the Department of Philosophy. Ranking secon d in median salary in LS&A behind Economics, Philosophy is the clear leader from 1977-97 in increased salary with a gain of nearly $20,000 in current dollars. Some other departments have fared less well in this zero-sum game. Full professors in five of the 17 largest LS&A departments have less purchasing power today than 20 years ago (Biology, Mathematics, Romance Languages, Slavic Languages and Literature, and Sociology).

One is naively inclined to accept the canonical wisdom that salary differentials reflect "market forces." Undoubtedly low supply and high demand for members of preferred groups does increase initial offers and subsequent raises. We have to pay the goin g rate to recruit and to retain. Yet it is interesting that some long-standing salary spreads appear to have been generated by market forces that applied to earlier generations. While the annual arrival of spring brings near-term adjustments, historical recalibrations may rarely be undertaken. Four of the five best paid LS&A departments in 1977 remain the best-paid in 1997. Should faculty salary scales be periodically recalibrated to ensure that today's salaries reflect the value of present rather th an past employees? Although a search of the historical record is likely to reveal that today's salary spreads are caused by more than the compounding of earlier spreads, it remains highly likely that recalibration of faculty salary scales would increase equity in compensation. As we cinch ourselves in for the VCM ride up the heights of the campus financial districts, we ought to examine the historical record. An academy that swears primary allegiance to market forces in setting academic salaries succum bs to popular tastes and political leverage rather than endeavoring to have deep intrinsic value determine resource deployment. As a community consecrated to search for truth and value, we must look to the staffing and salary needs of profoundly importan t academic areas, whether or not they have market leverage.

Faculty may wish to ask their Department Chair to discuss recalibration of faculty salary scales with the Dean. Whether the Committee on the Economic Status of the Faculty will seek to smooth the ever-widening rifts in our salary landscape may depend, s omberly, upon which units its current members represent. Intervention at the highest levels may be required to make total wages more visible and to eliminate decade-old differentials. If we fail to recalibrate, we may expect that future salary allocatio ns will be tethered to ever-growing spreads established by market demand for faculty now retired or interred.

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