Magazine article Academe

It's Not over Yet: THE ANNUAL REPORT ON THE ECONOMIC STATUS OF THE PROFESSION 2010-11

Magazine article Academe

It's Not over Yet: THE ANNUAL REPORT ON THE ECONOMIC STATUS OF THE PROFESSION 2010-11

Article excerpt

According to the National Bureau of Economic Research, the Great Recession began in December 2007 and ended in June 2009. With a duration of eighteen months, this recession was almost double the length of the average post-World War II economic downturn. It was also notable for its severity. During the recession, the gross domestic product (GDP) declined 4 percent (even after controlling for inflation); the unemployment rate doubled, as nearly nine million private jobs disappeared, wiping out more than a decade's worth of job growth; and almost $14 trillion in household wealth evaporated-an amount equal to an entire year's worth of economic production.

Although the worst recession since the Great Depression is now technically over, our analysis of faculty compensation and forecasts for state revenues indicates that the negative impact on higher education will continue for years in many states. Who outside the professoriate should care what happens to faculty salaries and benefits during a recession? Everyone who hopes to be employed in the future, bring home a paycheck, and have something left over to put into savings should care.

In the second decade of the twenty-first century, we live our lives in a global knowledge economy. Education is the primary component of human capital, which is the designation economists give to the skills and abilities workers bring to the various tasks involved in producing and maintaining an economic system; other components include health care and nutrition. Differences in human capital explain the majority of differences in economic growth rates across countries. The rate of innovation drives economic growth; innovation, in turn, is greater in nations with greater levels of human capital. Moreover, investments in human capital deliver compounded rates of economic return that raise GDP, employment, incomes, and wealth far beyond any other investments we can make. A large body of research shows that economic growth rates rise as a country's educational attainment increases, from the primary to the postsecondary level.1

And who creates human capital? Well-paid elementary, secondary, and higher education faculties.

Do US academic institutions compensate their faculties at the levels needed to produce college graduates who can compete in the global marketplace? Our analysis of this year's data and our examination of long-term trends in faculty compensation indicate that the answer is "No!"

Results This Year

Our analysis of the economic status of the faculty begins with results from this year's annual survey of full-time faculty compensation. Survey report table 1 presents the most basic results, while table A places these results in historical perspective. The tables report two different measures of the change in full-time faculty salaries: the change in average salary levels, which is a measure of the change from the previous year in what a typical faculty member might earn, and the average change for a faculty member continuing in employment at the same institution (that is, the average raise a faculty member might expect if he or she does not move). The first of these figures is calculated only for institutions that submitted data both this year and last.

The overall increase in salary level, reported on the left side of survey report table 1 and the upper half of table A, was 1.4 percent between 2009-10 and 2010-11. This is barely higher than the overall change reported last year, when we described it as "the lowest year-to-year change recorded in the fifty years of this comprehensive survey." It seems that this year has been just as tough as the previous one on full-time faculty salaries. The salary increases laid out in survey report table 1 varied between categories of institutions, however: as has usually been the case in recent years, the change in average salary at public institutions was lower (0.9 percent) than the change in private-independent (2. …

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