May 26, 2003

The Economics of Tenure

In a new entry called "The Price of Tenure," Jason of No Symbols Where None Intended suggests that the academic labor system at the University of Phoenix "arguably puts the lie to an argument that is sometimes advanced in defense of tenure: That it saves the university money." As an example of this line of defense, Jason cites James Axtell as follows:

. . . the relative economic security of tenure also lowers academic salaries from the competitively higher salaries of comparably educated professionals in government and industry. In 1987 the median salary of a Ph.D. in government was 10 percent higher than his academic counterpart, and in the private sector, 24 percent higher. Today [1998], the private/academic differential is 38 percent and growing, as academic salaries struggle to keep up with even modest inflation. If colleges and universities dropped the tenure system for short-term contracts and necessarily competitive salaries, the American price tag for higher education would skyrocket. As it is now, professors pay for tenure out of their own pockets, and not with loose change.

Jason notes, by the way, that Axtell relies on Richard B. McKenzie's "Why Professors Have Tenure and Business People Don't."

What's interesting is that the historian Axtell, writing in 1998, had apparently failed to notice that many colleges and universities were in fact moving from tenure-track to short-term contracts, and that the "necessarily competitive salaries" that ensued amounted to very low wages indeed. As for that 38 percent differential between private sector and academic salaries, I would suggest that one reason for this growing gap is precisely the oversupply of PhDs who will sell their teaching labor to the university at a very cheap rate.

I'm not an economist, of course, nor do I play one on this blog. But I am increasingly inclined to believe that in their attempt to resolve "the serious problems presented by the increased use of part-time/adjunct faculty at institutions across the country," professional organizations such as the American Historical Association would do well to avail themselves of the expertise of an economist or two. They needn't go for a Milton Friedman, I'm thinking more along the lines of a Brad DeLong.

Posted by Invisible Adjunct at May 26, 2003 10:48 PM

Since I did enjoy large chunks of The Pleasures of Academe--and have fond memories of Prof. Axtell's class at dear old alma mater--I should say that he acknowledges on a few occasions the moral, financial, and pedagogical problems posed by the overdependence on adjuncts.

However, he tends to absolve faculty of much responsibility in this regard, and--as IA observes here--seems to miss the dimensions of the problem as well as its effects on the academic job market in general.

Posted by: Jason at May 26, 2003 11:51 PM

I'm a tenured full professor & I agree that I pay for tenure with a lower salary. This can be a rational decision. Some folks of a scholarly or creative bent might very well accept less money for more time & freedom. And I reject categorically the idea that people who make such a decision are inferior in intellect or drive or whatever. If we're going to spin economic models, we'll have to account for such individual choices. There does seem to be a tipping point, though, below which the freedom & time of an academic life no longer make sense.

Posted by: Joseph at May 26, 2003 11:55 PM

"Some folks of a scholarly or creative bent might very well accept less money for more time & freedom. And I reject categorically the idea that people who make such a decision are inferior in intellect or drive or whatever."

Absolutely. And most of those who go to graduate school would happily sign on the dotted line in agreement with the terms of such a contract. What concerns me here, however, is the predicament of those (ie adjuncts and part-timers) who find themselves with neither money nor freedom.

Posted by: Invisible Adjunct at May 27, 2003 12:03 AM

Jason, I have read some of his work with interest and pleasure, and have great regard for Axtell as an historian. But that doesn't mean I trust him to make a sound economic analysis :)

For senior faculty to absolve themselves of responsibilty for the current and future state of their own professions is an all-too-familiar move.

Posted by: Invisible Adjunct at May 27, 2003 12:10 AM

I'm not sure how much the situation with adjuncts really tells us about the counterfactual in question -- namely, what would labor costs be in an academia totally sans tenure? I'm thinking that very, very many of the folks who pursue PhDs now do so in large part because they think they have a really good shot at that really good lifestyle of being a tenured professor. So you're able to accept the awfulness of grad school as a long stretch of delayed gratification. Then, when you're out, if you don't get a tenure track position you've still got to make a living somehow. And I think that surely more than a few adjuncts are staying in the field in the spirit of delayed gratification as well. So, without the carrot of tenure, wouldn't the labor supply for adjuncts contract markedly?

Posted by: JW at May 27, 2003 02:39 AM

I think JW is correct that if we removed tenure entirely that the supply goes down. But it implies a couple of things: one is risk-loving enough to take a shot at a Ph.D. and a t-track job but also risk-averse enough to want the sureness that tenure brings, particularly if we accept that it comes with much less salary than a world without tenure, as Joseph and I would both observe.

I read Stephen's post on some of our earlier conversation, and I think the idea that the tenure chase is like a tournament has some merit. Getting a Ph.D. is somewhat like getting through the minor leagues to the majors in baseball (takes longer for some). Arrival doesn't assure you terribly much. Very good players and very good professors don't quite make the huge contracts or get tenure. We call them "journeymen" in baseball and "adjuncts" in academia.

I recommend, btw, that readers go back and read Richard McKenzie's article that IA linked up. Tenure as an insurance policy for faculty who may have future employment and earnings dependent on votes of future faculty strikes me as a good argument. Who do you fear more -- the provost or the faculty RPT committee?

Posted by: kb at May 27, 2003 03:04 AM

IA, who runs the American Historical Association?
If it's a group of tenured professors, this isn't *your* professional association, nor anybody's who isn't at least on tenure track.

Posted by: Barry at May 27, 2003 10:36 AM

The AHA calls itself "the professional association for all historians." But yes, it is mostly run by tenured professors, and it's only very recently that they have begun to take note of the job problem and to realize that the loss of tenure-track to adjunct jobs poses a serious threat to the professional status of academic historians.

Kb, tenure as an insurance policy is not without merit. However, once you move away from the argument that tenure is necessary for the protection of academic freedom, you are on shaky ground with respect to the wider public. Many people outside the academy do not support the institution of tenure. "Why should professors have jobs for life?" they ask, "These lazy do-nothings already spend too few hours in the classroom, and they have the summers off, and who the hell do they think they are?..."

Btw, did academic salaries rise in the UK after Thatcher abolished tenure? I don't know the answer to this question, but from what I have heard anecdotally, I believe they did not.

If getting a tenure-track job is like trying to make it to the major leagues, the people who would enter graduate programs should be informed of this. One difference between baseball and academics: as far as I can tell, the standards and criteria for what make a good baseball player are pretty much constant. Academics, on the other hand, are subject to changing fads and fashions: hence, Robert Wright, with 3 monographs to his name, cannot find a tenure-track job because economic history is not "hot."

Posted by: Invisible Adjunct at May 27, 2003 12:25 PM

One need not speculate. There is an ongoing experiment. Tenure was abolished in English universities several years ago (there's a previous thread where we discussed this). The trend in academic salaries since then has been downward (as far as I can judge from the complaints of British academics), despite competition from US universities for (presumably) the ablest of their staff.

Posted by: jam at May 27, 2003 12:46 PM

But has tenure in Britain really been abolished? I had heard that it was, but a friend of mine got a job there and was told that as long as he did not commit any major crimes in the first year or so the job would be his for life. I realize this is only one case, and perhaps he was being misled, but I'm curious about how much (or how little) job security there is in British academia.

Posted by: Duncan at May 27, 2003 01:10 PM

The British Parliament abolished tenure when it passed the 1988 Education Reform Act. It has not been reinstated, and likely never will be. Your friend has been given an informal type of reassurance, but one which carries no formal weight. Anecdotally, I have heard British academics say that things have gone from bad to worse lately in terms of salary and job security (i.e., even worse under Blair than under Thatcher).

What this suggests to me: academics who believe, as Axtell argues, that the abolition of tenure would lead to an increase in faculty salaries and a "skyrocket" in the price of higher education are probably deluding themselves. If they took note of the fact that 44 percent of faculty are now part-timers, and inquired into the rates of pay for these part-time faculty, they would see things differently.

Posted by: Invisible Adjunct at May 27, 2003 01:30 PM

A lack of formal weight might not matter of course if informal factors made firing unlikely, but I take your point. Certainly I see no reason to think that ending tenure would lead to anything other than lower salaries. I think what you would get is big names being given huge salaries and long contracts while most teaching would be done by adjuncts who would virtually all give up and go to law school or whatever when their contracts were eventually not renewed or they realized they were never going to become a big name.

Posted by: at May 27, 2003 02:51 PM

My angle on this is pretty cynical. Two-tier hiring (my old job has three-tier hiring now) allows a job category to be degraded without harming any present jobholder. Just the profession or trade. It's like a bribe -- people who haven't been hurt personally don't care and don't resist.

My main concern is the future of scholarship. Neither adjuncts nor Phoenix employees have the leisure to do much scholarly work. Tenured faculty who fail to see the long-term problem here make their own justifications of their own position seem dubious -- "after us, the deluge".

Posted by: zizka at May 27, 2003 03:25 PM

What concerns me the most about those who work at the University of Phoenix, are the amount of restrictions (spoken and unspoken) placed on teachers in terms of what curricula will look like. There is a strong push for "user-friendly" curricula and standardization. Instructors of all ranks (including adjuncts) are pressured to follow the committee-approved syllabi. The way I see it, I left public school teaching because of these de-professionalizing criteria and I sure as hell don't want to put up with them in a college classroom! I wouldn't be surprised if we were to see similar "user-friendly" movements in other consumer minded colleges and universities in the future...and tenure won't protect us from it. The day someone can walk in and tell me "teach exactly like this..." is the day I'll throw in the towel and start selling stuff on eBay.

Posted by: Cat at May 27, 2003 03:46 PM

Zizka, I guess I've grown cynical too, because I think your comments are dead-on.

Selling stuff on eBay, eh? Now that's a career path I hadn't thought about...

Posted by: Invisible Adjunct at May 27, 2003 04:21 PM

I've decided to blog on this here.

Posted by: kb at May 27, 2003 06:51 PM

I've toyed off and on (1975-- present) with the idea of going into academicia. At my age it probably wouldn't be possible anyway, but the reports I get from people trying to horn into the field have been pretty discouraging. And even the reports from established people.

BTW, I will be an adjunct summer session, teaching one class. I am now 6.5% of a $28,000 / year lecturer.

Posted by: zizka at May 28, 2003 02:13 AM

Zizka -- What are you teaching?

Posted by: Invisible Adjunct at May 28, 2003 02:23 AM

Cross-posted to kb's blog:
'Fads' hit other fields, too, in the sense that some sectors could be hot now, but not later. When I was in a biostatistics Ph.D. program, repeated measures were very hot, newly so. If somebody had decided to go into that area a couple of years earlier, their chances of landing a tenure-track position were much higher. If they were up for tenure at that time (late 1990's), then they had a better chance. Meanwhile statistical genetics was experiencing a growth cycle, due to increased data flows from automatic sequencing (the machines could produce vast volumes of data, but making sense of it was the problem). I believe that experimental design was lagging, after manufacturing insutry-led growth in the 1980's.

Meanwhile, in the Business World, the World of the Market, Profit ruled with a steady hand.


For those who haven't been in the business world, the profitability of a person can be very hard to assess. Particularly in large, complex organization with long lag times, and many decisions made by higher ups. Who may have moved on, and who certainly don't want to take any negative credit - although they'll hoover up any positive credit, of course. Not to mention peers, who might be very skillful with a stilleto.

I ended up leaving a very highly-paid corporate job for the simple reason that new policy barred job mobility - the written policy was the same, but the actual policy was for managers to disregard the written policy, and to hoard their people.

Things changed.

Posted by: Barry at May 28, 2003 02:45 PM

My impression of Axtell's article is simply that he really didn't know the business world.

Posted by: Barry at May 28, 2003 02:47 PM