RE: Teacher's income
>So, are professors really underpaid? In general I think that when one hears complaints about people being underpaid it is because their earnings are low compared to what other people with similar credentials are being paid. In my experience most people don't think in terms of markets setting salaries. They think in terms of employers deciding what to pay and they think that employers can pretty much pay whatever they want. Pay is viewed as unfair if it doesn't reward the things that are supposed to be rewarded according to norms (talent, education, and experience). Economists have very different views of the reasons why people are paid for these things having to do with their scarcity and the cost of acquiring the characteristic. Our view would have little to do with fairness. On one level, I think many claims about "fairness" are just whining. I also think a society does less well than it might by rewarding whining. On a more exalted level, we have no consensus on the meaning and proper application of concepts like fairness or merit. We have a reasonable and objective way of determining a person's value to society. We have no such way to determine the fairness of their wages or general situation. The political process? I deny we can distinguish "fair outcomes" from "dead weight rent seeking." 2) Public schools do seem to set wages in a way which is typical of a price leader (quality adjusted pay is lower than the private sector unless there is a union). What is the evidence for this? Are there public schools without teachers unions? I find it hard to believe that this is true once parochial schools are included. Are there studies of wages in nonunion public schools and comparable private schools? Are professors underpaid? If one thinks that there is chronic excess supply this hardly seems arguable. The argument against this view is that there is also an oversupply of aspiring NBA players, but that doesn't mean that current NBA players aren't being paid the value of their marginal revenue product. Those who aspire may not be able to perform at the level of the incumbents. The NBA example would be relevant to my original post if the stars of one era were granted permanent employment. We would thus be enjoying the efforts of Bill Russell and Wilt Chamberlin (until he died). My original point was that we cannot know in universities that those who aspire may not be able to perform at the level of the incumbents because the incumbents have locked in their jobs and prevent any and all competition. My other point was that the chronic excess supply of PhDs grew out of the original monopoly. Freed from competition, tenured professors continued to admit and credential many more PhDs than the market could handle. Had there been a functioning market for professors, the number of new PhDs would have roughly matched the number of new jobs. In such a functioning market, the wages of professors would also be somewhat lower than than now. Thus tenured professors are overpaid. The market for nurses and teachers is largely local because of career co-location decisions while the market for Profs is national. The local nature of the nurse and teacher markets makes monopsonistic coordination possible (the Personnel director I talked to didn't take seriously the notion that high wages for nurses in her city would attract more nurses "They're all married and they can't move." even while she was willing to allow that there would be an increase in supply from "burnt out" nurses reentering the field). -- Bill Dickens Even if we grant the monopsony argument, I don't see how it could apply to universities which number in the thousands and compete in a national market. Wouldn't a monopsony be highly unstable? On the other hand, the supply side is clearly fixed. All of this raises three questions for me: 1. How do professors maintain their cartel? I remember reading a few years ago about a professor at Columbia who refused to accept tenure when it was offered. I don't recall that he was punished in any way. Are sanctions aimed largely at buyers? 2. Tenure protects an older generation from competition from a younger cohort. How does this fit into larger evolutionary theories? 3. Why have so few people on this list bothered to defend tenure? John Samples Cato Institute Washington, DC
Re: Teacher's income
Ed Dodson responding... John Samples wrote: > > ... complainers evaluate > themselves according to their (self ascribed) "merit". Labor markets, on the > other hand, evaluate them according to their value to others. Which > evaluation should we trust? Someone who is the judge in their own case or an > institution that assimilates the judgments of many individuals who have > practical concerns in mind? Labor market policies should be based on value, > not merit. Ed Dodson here: There is the theoretical competitive market and there is reality. Virtually every society is built on a system of law that secures and protects "rent-seeking" claims on the goods and services produced by others. Societies differ only by the extent to which such laws subsidize quasi-monopolistic enterprise. The quite natural response by people who provide their labor is to organize -- to form unions or professional associations and establish stringent licensing and other rules to restrict supply. Your example of tenured professors is one in which the original reason for establishing tenure (freedom of academic expression) seems to have had the oppositive effect; namely, the creation of academic orthodoxy, while intensifying competition at the margin for the smaller and smaller number of tenure-track positions that become available thru attrition. begin:vcard n:Dodson;Edward tel;fax:215-575-1718 tel;home:856-428-3472 tel;work:215-575-1819 x-mozilla-html:TRUE org:Fannie Mae;Housing and Community Development, Northeast Regional Office (NERO) version:2.1 email;internet:[EMAIL PROTECTED] title:Senior Affordable Housing Business Manager note:If you need to reach me during non-business hours, send an email to: [EMAIL PROTECTED] adr;quoted-printable:;;1900 Market Street=0D=0ASuite 800;Philadelphia;PA;19103;U.S.A. fn:Edward J. Dodson end:vcard
Re: Teacher's income
>So, are professors really underpaid? A few thoughts. When people say that teachers are underpaid I don't think that they are mainly referring to professors. I think its K-12 where unfavorable comparisons are often made between the salaries paid to BA teachers and HS grad semi-skilled manual laborers. In fact, in a minute I will argue that there sense in which an economist would say that these people may be thought of as underpaid (as may nurses). In general I think that when one hears complaints about people being underpaid it is because their earnings are low compared to what other people with similar credentials are being paid. In my experience most people don't think in terms of markets setting salaries. They think in terms of employers deciding what to pay and they think that employers can pretty much pay whatever they want. Pay is viewed as unfair if it doesn't reward the things that are supposed to be rewarded according to norms (talent, education, and experience). Economists have very different views of the reasons why people are paid for these things having to do with their scarcity and the cost of acquiring the characteristic. Our view would have little to do with fairness. However, I think that there is one place where the economists' view of what's "fair" and the common person's view leads to similar conclusions. I would argue that in both K-12 teaching and in hospital nursing the dominance of large institutions (often government run) have led to a situation where monopsony is common. In the classic monopsony, wages are set too low and the individual monopsonists are always complaining about under supply. Evidence: 1) You are always hearing about teacher and nursing shortages. 2) Public schools do seem to set wages in a way which is typical of a price leader (quality adjusted pay is lower than the private sector unless there is a union). 3) There is an interesting study from a couple of years ago showing that market concentration in an MSA in the hospital industry is negatively associated with nurses wages and 4) I've had the personnel director for a large hospital in a major metropolitan area brag to me that she was personally responsible for saving millions of dollars in health care costs by coordinating the local cartel of hospitals to keep down nurses wages. Two minutes later she was complaining bitterly about how hard it was to hire competent nurses. When I asked her why she wouldn't think of raising wages I got the classic collusive monopolist's answer. She said that in the short run they might get a few more nurses, but that all the other hospitals would raise their wag! es and in the end they would all be paying a lot more and overall they wouldn't get that many new nurses. So here I would think that both the common person and an economist would agree that in a very real sense these jobs are underpaid. Are professors underpaid? If one thinks that there is chronic excess supply this hardly seems arguable. The argument against this view is that there is also an oversupply of aspiring NBA players, but that doesn't mean that current NBA players aren't being paid the value of their marginal revenue product. Those who aspire may not be able to perform at the level of the incumbents. One piece of evidence that might suggest that low paid professors are indeed the victims of monopsony is that the usual explanation for why economists, engineers, MDs and lawyers are paid more than classics profs etc. is that there is a market for their services outside of academia. Why should this matter (its obvious why if Universities exercise monopoly power)? It costs the individual more to get a degree in classics than in economics (fewer opportunities for relevant employment in grad school and fewer scholarships and grants) and if anything economists have it easier than classicists (in terms of ! perqs), so why should they earn less in equilibrium unless there is monopsony? Is being a classics professor that much more fun than being an economist? Or is it that the skills to be an economist are in relatively short supply? I won't push this very far mind you. The market for nurses and teachers is largely local because of career co-location decisions while the market for Profs is national. The local nature of the nurse and teacher markets makes monopsonistic coordination possible (the Personnel director I talked to didn't take seriously the notion that high wages for nurses in her city would attract more nurses "They're all married and they can't move." even while she was willing to allow that there would be an increase in supply from "burnt out" nurses reentering the field). -- Bill Dickens William T. Dickens The Brookings Institution 1775 Massachusetts Avenue, NW Washington, DC 20036 Phone: (202) 797-6113 FAX: (202) 797-6181 E-MAIL: [EMAIL PROTECTED] AOL IM: wtdickens
Re: Teacher's income
Once again, it goes back to supply and demand. People with good writing skills seem to be more numerous than those that can teach math. Thus, the price of writers should (and is) lower than mathematicians. -fabio > Are Humanities less real skills that, let's say, maths or economics? If > humanities classes produce teachers that help people speak and write proper > english (or german, or french, or whateverÂ…) they are, at least, as useful as > any other academic disciplines. One could say that they are even more useful to > most people than economics (who really cares in the real world about what one > can read in the AER?). > If deconstrution is often ridiculous, so are many things in other disciplines. >
RE: Teacher's income
Armchairs, Here's a question that puzzles me every now and then. People from all walks of life tend to complain that their salaries are (injustly) low. Ok, why not complain, right? I too have often noticed this. I have concluded that such complaints should carry no weight whatsoever. Here's why. Imagine that someone believes they are underpaid. If their belief is correct, they could seek another job and receive a higher salary. In my experience, the people who complain do not seek other jobs (or they do so unsuccessfully). I conclude their belief about being underpaid is false. Put another way, the complainers evaluate themselves according to their (self ascribed) "merit". Labor markets, on the other hand, evaluate them according to their value to others. Which evaluation should we trust? Someone who is the judge in their own case or an institution that assimilates the judgments of many individuals who have practical concerns in mind? Labor market policies should be based on value, not merit. But when I think of professors, particularly university faculty and --if you push me harder-- economics faculty, I just get wonder: Are they really being underpaid as they often complain? .. So, are professors really underpaid? (if such statement makes any sense at all). In general, we have good reason to believe that tenured colleague professors are overpaid. The labor market for college professors is cartelized by the practice of tenure. No holder of tenure ever has to compete for his or her position against an alternative. That's the micro side. The macro side of things has a lot to do with demography. The rapid expansion of universities in the 60s and 70s led to faculties being "tenured up" by about 1975. Programs continued to produce PhDs in large numbers thereafter. Predictably, political science - the field I am most familiar with - saw hundreds of applicants for many positions in the 80s and 90s. Had tenure not existed, this supply of new PhDs would have bid down the salaries of PhDs hired in the 60s and 70s. Long before that happened I suspect the number of new PhDs would have been reduced to roughly the number of new positions open. I am not certain about nontenured college professors. Their market seems pretty sticky to me. However, they are at least hypothetically open to competition. John Samples Washington, DC
Re: Teacher's income
fabio guillermo rojas a *crit : > Technical schools (teaching colleges, many "state" schools) probably pay > what the private market would pay: almost zilch for most humanities > and something decent, but not spectacular, for people teaching > real skills. Are Humanities less real skills that, let's say, maths or economics? If humanities classes produce teachers that help people speak and write proper english (or german, or french, or whateverÂ…) they are, at least, as useful as any other academic disciplines. One could say that they are even more useful to most people than economics (who really cares in the real world about what one can read in the AER?). If deconstrution is often ridiculous, so are many things in other disciplines.
Re: Teacher's income
> So, are professors really underpaid? (if such statement makes any sense at > all). I recommend that you read chapter 5 of Stinchcombe's "Information and Organizations." That chapter is all about universities. One good observation (not unique to Stinchcombe) is that US universities seem to be in the business of converting prestige into tuition dollars. From that intuition, he argues that the humanities are there just to pump up the prestige of the institution which allows them to charge big $$$ for undergraduate degrees in general. But there is competition for prestige so universities drive up the price of humanities professors. He compares the situation to Latin America where most colleges are like technical institutes - they teach nursing, engineering and the like. Humanities degrees really only exist in a few research schools. This system tends to drive down prices because most teaching is done by part-timers. People sign up in the schools only for the skills and could care less about the prestige. They do not want to have the pleasure of being able to explain deconstruction at cocktail parties. The result is that university teachers get poorly payed and consequently the smartest people stay in the private sector. The American college system is unique in that it is competitive on many levels: for students, faculty and prestige. This determines the "true" market value, somewhat imperfectly. What the market says is that when schools are in the race for prestige, they tend to pay more than what the private market would pay. Technical schools (teaching colleges, many "state" schools) probably pay what the private market would pay: almost zilch for most humanities and something decent, but not spectacular, for people teaching real skills. -fabio
Re: Teacher's income
I have often wondered what would happen if universities shut down everything but the vital organs--engineering, nursing, etc. (How could the "essentials" be determined? By asking "Would you have a job if you did not teach?") I have a hard time believing that a Classics dept. would survive on the street if the govt. did not give it a home. Are universities are a form of non-circulating prestige goods? (Although I think that Columbia University originally located in WA, DColumbia.) Dan > Armchairs, > > Here's a question that puzzles me every now and then. People from all walks > > of life tend to complain that their salaries are (injustly) low. Ok, why > not > complain, right? > > But when I think of professors, particularly university faculty and --if you > > push me harder-- economics faculty, I just get wonder: Are they really > being > underpaid as they often complain? > > Who else other than "economists" to understand why their wages are whatever > they are? Yet I hardly have found an explanation despite the fact that > economists like to "explain" every single fact of life they come about... > > So, are professors really underpaid? (if such statement makes any sense at > all). > What's beneath and beyond the popular saying: "life as an academic will not > make you rich, but it will be fun"? > What's to the other usual saying: "if you are so smart... why aint you rich?" > > What's beneath the general public opinion that "teachers are uderpaid"? > What kind of people self select themselves to pursue academic careers?
Teacher's income
Armchairs, Here's a question that puzzles me every now and then. People from all walks of life tend to complain that their salaries are (injustly) low. Ok, why not complain, right? But when I think of professors, particularly university faculty and --if you push me harder-- economics faculty, I just get wonder: Are they really being underpaid as they often complain? Who else other than "economists" to understand why their wages are whatever they are? Yet I hardly have found an explanation despite the fact that economists like to "explain" every single fact of life they come about... So, are professors really underpaid? (if such statement makes any sense at all). What's beneath and beyond the popular saying: "life as an academic will not make you rich, but it will be fun"? What's to the other usual saying: "if you are so smart... why aint you rich?" What's beneath the general public opinion that "teachers are uderpaid"? What kind of people self select themselves to pursue academic careers?
