By Richard Vedder
For decades, Ohio State University (OSU) was a national athletic powerhouse, but considered something of a lightweight school academically. Within the Big Ten conference, Michigan, Northwestern, Illinois, and Wisconsin were always considered better schools academically, and perhaps others (Minnesota especially). A couple of decades ago, a serious effort to reverse this began, an effort that has accelerated in the last decade. Ohio State has been a major aggressor, trying to buy an academic reputation.
The Columbus Dispatch had a marvelous extremely long (over two full pages) story yesterday detailing spending growth at OSU. From fiscal year 1998 to 2008, total enrollment (including a couple of smaller regional campuses) rose 10 percent, but the number employed rose 32.5 percent. The ratio of employees to students rose by about 20 percent. Labor costs per student rose nearly 30 percent, adjusting for inflation. So much for capital-labor substitution.
Not only have staff levels exploded, but salaries as well at the top. OSU's president in 1997-98, Brit Kirwan, made $275,000 a year. This year, Gordon Gee will make about $1.4 million with bonuses, etc. Allowing for inflation, the salary of the university prez has roughly quadrupled. The football coach in the earlier period, John Cooper made $675,000 a year --his successor, Jim Tressell, is making $2.5 million now, but $3.5 million next year. Some 21 employees at OSU make over $500,000 a year --still a very high salary for a university president.
To be sure, a huge part of the increase in positions and salaries reflects the fact that OSU has a huge and growing medical center --hospitals, clinics, etc. The total budget of the university has nearly doubled in inflation adjusted terms in a decade --increasing 7 percent a year as enrollments rose at best 1 percent (and most of that increase was at the relatively lower cost regional campuses).
Interestingly, only about 15 cents of each new dollar of inflation adjusted spending went for "instruction/academic support). A majority went to pay for the expanding hospitals, physicians, etc. The hospital's budget is now greater than that for the supposed heart of the university --instruction and research spending combined.
Gee says "we are not competing with the Montana School of Massage. We're fiercely competing with Harvard, Yale, Chicago, Stanford and the University of Michigan." Huge amounts of resources are being expended to be at the top of American colleges, even though we have no real way of measuring which colleges truly do a good job. Students are given subordinated status to research, medical center expansion, and, of course, athletics (no professor outside the medical school makes even one-fourth what the basketball coach is paid).
In the same period, UCLA added 32 percent to its inflation adjusted payroll, the University of Arizona 23 percent, and the University of Michigan 37 percent. No serious discussion of rising college costs can be made unless one addresses this explosion in payrolls.The Dispatch story reminds me once more how critical daily newspapers are in our lives, and how we should pray they survive the current downturn.