Tuesday, December 12, 2006

Student Compensation: Are Students "Underpaid?"



by Matt Denhart

Previously, we reported that college presidents, particularly ones at research-oriented institutions, have done exceedingly well financially in recent years. Continued research on salaries has unveiled yet another inequality. As already reported, the growth in salaries of presidents greatly exceeds that of the faculty who are actually doing the teaching and research. However, the most essential aspect of any university has been left from the equation: the students. Certainly the students are not earning an income; they are actually paying a good deal of money to attend an institution of higher education. However, financial aid does much to alleviate the cost of attendance, and one might consider financial aid as the equivalent of a student’s “salary.”

We have already reported changing salaries of presidents and faculty over the time period of 1996-97 to 2004-05. As the graph above shows, we have calculated the median growth (for four broad categories of four year institutions) in real per student financial aid. In real terms, the typical university president saw his or her salary increase 37.4 percent over these eight years. Compared with 27.6% for faculty and only 20.9 percent for students..

Obviously there is great inequality in the rate of salary increase, with students losing out. As more and more money is poured into the system, the top administrators are increasing their own financial well-being at the greatest rate. The hierarchy with students at the bottom seems to be a continuing trend in other areas beside salaries, evidenced by things such as continued rising tuition, enormous fees, limited access to required classes, etc.

The education and well-being of students should be the top priority of any non-profit college or university. However, such statistics seem to prove that this noble goal of the academy is no longer a reality. Perhaps we need to take a step back to reassess how we view and treat students, the whole rationale for universities.

Matt Denhart is an undergraduate student at Ohio University and is a research assistant at the Center for College Affordability and Productivity.

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Anonymous said...

Very interesting perspective. What is particularly interesting is how the salary growth of presidents and faculty outpace that of student aid. So I am wondering where the difference is coming from - I would imagine the difference is partly covered by personal funds used for tuition payments and tuition paid by those who do not need financial assistance.

What is also interesting (this is somewhat off topic) is that if you do a job search on Monster.com for an engineer, you will find that more and more, employers not only require a degree - but they are also asking for specific skills that colleges do not provide (and shouldn't IMHO). Examples of these skills are: Six Sigma, ISO 9000, specific software skills such as Pro-E, ACAD, SolidWorks, etc.

Furthermore, employers are narrowly defining the type of work experience required to qualify as a candidate for an open position. As an example, a graduate may have ten years experience as a Facilities Manager at a semiconductor manufacturer, but does not qualify as a Facilities Manager at a hospital simply because the hospital wants someone with hospital experience (even though semiconductor facilities are cleaner and have more rigorous facility standards). Finally, some companies - especially hi-tech and some others want candidates with graduate degrees, if not post grad degrees.

So, rather than supplying graduates that are capable of doing a number jobs, employers are looking (it seems) for grads that are highly specialized and cut from a "single industry mold" while employment is much less secure these days. The ability of college grads, in my opinion, to go from job to job, by choice or not, is becoming more difficult. Should universities take the responsibility for dealing with such phenomena? I don't know how they could. I think if industry wants specific skill sets from grads, they are going to find themselves spending more money on recruiting, hiring, and on salary.

Anyway, good job on your piece - well done. -R

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