Thursday, January 9, 2014

Of Coaches and Presidents: How the Corporatization of Universities Destroys Higher Education

by Nomad

Here's an info-graphic that blew my mind- which isn't all that easy to blow anymore.

The accompanying article explains:
Based on data drawn from media reports and state salary databases, the ranks of the highest-paid active public employees include 27 football coaches, 13 basketball coaches, one hockey coach, and 10 dorks who aren't even in charge of a team.
However, the writer cautions about jumping to conclusions. The salaries are generally drawn from money made from sporting events, rather than from the taxpayers. The rebuttal often heard when it comes to coaching salaries is that the system pays for itself.
Nevertheless, you should still be concerned.

There are at least three problems.
  • Coaches don't generate revenue on their own; you could make the exact same case for the student-athletes who actually play the game and score the points and fracture their legs.
  • It can be tough to attribute this revenue directly to the performance of the head coach. In 2011-2012, Mack Brown was paid $5 million to lead a mediocre 8-5 Texas team to the Holiday Bowl. The team still generated $103.8 million in revenue, the most in college football. You don't have to pay someone $5 million to make college football profitable in Texas.
  • This revenue rarely makes its way back to the general funds of these universities. Looking at data from 2011-2012, athletic departments at 99 major schools lost an average of $5 million once you take out revenue generated from "student fees" and "university subsidies." If you take out "contributions and donations"—some of which might have gone to the universities had they not been lavished on the athletic departments—this drops to an average loss of $17 million, with just one school (Army) in the black. All this football/basketball revenue is sucked up by coach and AD salaries, by administrative and facility costs, and by the athletic department's non-revenue generating sports; it's not like it's going to microscopes and Bunsen burners.
There's also a more subtle long term effect about warping the overall purpose of university education. Is the point of university to promote sports and make profits- something only universities in the US do-  or is it to raise the level of education for the student body?  

Not Only Coaches
In addition to the salaries of the sport department, there's the problem of the salaries of university presidents. According to a report last year by the Chronicle of Higher Education, 42 presidents of private colleges were compensated with more than $1 million by their schools in 2011, up from 36 the previous year The report analyzed how much 550 private college presidents made in 2011, concluding the median total compensation was $410,523.  As Mother Jones observed:
As the recession hit, pay for faculty stagnated, and schools have been struggling with budget cuts and the rising cost of providing education. There's one notable exception to this trend: Pay (and perks) for college presidents is on the rise.
That articles cited an earlier CNN op-ed piece from a professor of history at the New School for Public Engagement, Claire Potter, The need to attract top talent is understandable, she said, but within bounds. "As soon as you are getting extreme compensation at the expense of others, that's when it becomes a problem." 
Potter also points out that, despite public perception, the problem isn't actually a case of top heavy management. In fact, she notes, faculty salaries are not to blame.
According to the American Association of University Professors, in 2012 full-time faculty at all ranks across the nation received an average increase of 1.8%. In real dollars, this was the equivalent of lowering salaries by 1.2%. In comparison to a decade ago, AAUP salary data shows the rate of increase in faculty raises barely budged.
The problem starts (and stays) at the top of the food chain. Potter writes:
I remember a time when administrators were called deans, provosts, treasurers and registrars -- now it seems everybody is a vice president. With these titles have come higher salaries, bonuses, company cars, low-interest mortgages and severance payments for voluntary departures. Boards of trustees approve these lavish practices even as they fight unionization, eliminate full-time faculty positions, refuse even cost-of-living raises for the majority of workers, increase tuition and ask students and their parents to take out tens of thousands of dollars in loans.
Shutting Down Access for All
The negative implications for American society in the long term are bleak. Without affordable higher education there is little hope to break the cycle of poverty. Still worse the present system undermines our ability to maintain a viable middle class.

While salaries of coaches and presidents soar, the costs for a university education has outpaced the average families ability to pay, as shown by this article in The Economist.
The cost of university per student has risen by almost five times the rate of inflation since 1983 (see chart 1), making it less affordable and increasing the amount of debt a student must take on. 

Between 2001 and 2010 the cost of a university education soared from 23% of median annual earnings to 38%; in consequence, debt per student has doubled in the past 15 years. Two-thirds of graduates now take out loans. Those who earned bachelor’s degrees in 2011 graduated with an average of $26,000 in debt, according to the Project on Student Debt, a non-profit group.
More and more young people are finding the costs of higher education out of reach while the salaries of coaches at universities are astronomical. The alternative to forgoing higher education- and thus, practically eliminating much chance of upward mobility- is to end up with mountain of debt from student loans. 

There are other problems too. Large salaries have led to both rises in tuition as well as cost cutting. This in turn has led to a lack of reinvestment in the universities, say critics.
Despite so many fat years, universities have done little until recently to improve the courses they offer. University spending is driven by the need to compete in university league tables that tend to rank almost everything about a university except the (hard-to-measure) quality of the graduates it produces.
Furthermore the article points out:
In 1962 one cent of every dollar spent in America went on higher education; today this figure has tripled. Yet despite spending a greater proportion of its GDP on universities than any other country, America has only the 15th-largest proportion of young people with a university education.
Wherever the money is coming from, and however it is being spent, the root of the crisis in higher education (and the evidence that investment in universities may amount to a bubble) comes down to the fact that additional value has not been created to match this extra spending. Indeed, evidence from declines in the quality of students and graduates suggests that a degree may now mean less than it once did.
In a way, this is a one facet of a larger problem with the American economy. Certain individuals of high rank in an organization are making an disproportional amount of money for doing comparatively little. When we point to the scandalously high salaries of corporate CEOs  allowed to make outrageously high salaries (when compared to the actual labor) we are in fact missing the fact that this problem exists at every level. 

Critics of this system say that this isn't just a case of misplaced priorities. It goes deeper; this problem is the result of corporatizing every institution.
There's an excellent reason why prisons, health care and university education were not meant to be run as businesses. In order to make a profit, the model ends up destroying the very reason for their existence.