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Monday, August 17, 2009

Monday, August 17, 2009

Who Are the High Earners in the UC System (x-post)

Cross-posted from Robert Samuels, Changing Universities

Monday, August 17, 2009

Who are the High Earners in the UC System

Like many people, I was wondering about who exactly are the people making more than $200,000 a year in the UC system. Using Jeffrey Bergamini’s great salary data (http://ucpay.globl.org), I analyzed the different categories of employees in the over 200K club. I also looked at how these groups increased over the two-year period from 2006 to 2008. Here is what I found (with Jeffrey’s help):

First of all, I broke the employees making over $200,000 into six basic groups: administrators, medical faculty, athletic coaches, business school professors, academic professors (excluding business and law professors), and law professors. These six categories accounted for over 95% of the revenue of the over $200,000 club, which had a total gross pay of over 1 billion dollars in 2008. The top group was the medical faculty, which had 2,296 people making a total of $680 million in 2008. This same group in 2006 had 1,748 employees with total earnings over $502 million. In other words, over a period of two years, the UC added 550 new people from the medical field into the over $200,000 club for an additional cost of $178 million (which is about the total savings for the entire furlough plan).

The second biggest group was the administrators. In 2008, there were 397 administrators in the over 200k club making a total of $109 million, and in 2006, the same group had 214 members for a collective gross pay of $58.8 million. This group and its collective salaries, then, almost doubled in just two years. If you want to know where the UC money has been going, this is a great place to start.

The third biggest group is the academic professors outside of law, medicine, and business. In 2008, there were 415 academic professors making over $2000,000 for a collective gross pay of $96.6 million. In 2006, this same group had 215 employees at $49 million. In other words, the number of academic professor’s outside of the professional schools making over $200,000 basically doubled in a two-year period. During this time, the faculty salaries in the UC system continued to fall beneath the national average, and so what we are seeing in the UC system is an incredible widening of faculty salary inequality: the rich are getting richer, and the poor are getting poorer.

In the case of the business school faculty, in 2008, there were 372 faculty making more than $200,000 for a collective gross pay of $93 million, while in 2006, there were 193 in this group with a collective gross pay of $46 million. Once again the pay of this group doubled in two years: they do not call themselves business faculty for nothing.

In the case of law professors, we find that in 2008, there were 85 making over $200,000 for a collective pay of $21 million, and in 2006, this same group consisted of 57 employees making a collective $13 million. For some reason, this group did not double its earnings, but it still showed a healthy increase.

The final group is the athletic coaches, which in 2008, there were 24 coaches making over $2000,000 for a collective payout of $12.8 million. In 2006, this same group had only 11 members with collective earning over $5 million. So athletic coaches in this category more than doubled their earnings in two years.

What all of these statistics tell us that that UC does not have a budget problem; it has an out-of-control compensation problem. Moreover, it is the people at the top, just 1.5% of the employees (out of a total of 240,000 workers) who make 11% of the total compensation, and this group increased its wealth by close to 40% in just two years. Did you get a 40% raise in the last two years?

Bob Samuels, UC-AFT


Anonymous said...

"In other words, over a period of two years, the UC added 550 new people from the medical field into the over $200,000 club for an additional cost of $178 million (which is about the total savings for the entire furlough plan)."
There's a real flaw in logic here---most of those 550 people probably earned just under 200 K in 2006, so the net additional cost is much more likely of order 10% (if, for example, they got a 20 K raise from 190 K to 210 K over those 2 years), or perhaps less. The correct calculation would be: What is the difference between how much the 200 K or more folks make now, versus how much they made in 2006? If they are new hires, then one would count their full salary. That would provide a real number for enhanced expenditures, as opposed to a completely fictional number.

Ralph Spoilsport said...

Even if they were new hires, the funding source matters, as has been pointed out repeatedly in the furloughs discussion. If UC hired a new MD who was paid a high salary for performing some lucrative medical procedure, and the funds come from billing patients or insurance companies, it doesn't really make sense to include his or her salary in a total that is compared to the furlough savings. The same is true if the salary is funded by NIH, for instance. Jeffrey's data include base salaries and extra compensation, but I don't think that's the entire story. Whatever we may think internally about who should or should not be exempted from the furloughs, the money for a new hire that comes from outside could not have been used to mitigate our budget cuts. It would be nice to know the extent to which "base salary" equates to "state funding" but I don't think they are at all equivalent.

Gerry Barnett said...

Yeah, the logic is crossed up. If one just takes the medical faculty as two samples from different times, then it looks like average salary in the two samples is up slightly less than 4% over two years.

Worse, this isn't the point. UC's budget crisis is more than the present bit of badness. Even if one got salary reductions for the targeted groups, that would only perpetuate the underlying budget problem.

It's very possible that an average $300K salary for top educated medical professionals is where things should be.

It appears there is a lot of effort to find some incremental patch up to postpone the need to deal with the big things. The politics of caution, as Kerr puts it, doesn't want to admit anything has changed, or if it has, it won't be put back the way it was, on its own.

The alternative of "improving" changes that are so seductive of local maxima in the solution space is where folks try to find something that minimizes the pain for friends and collaborators and excises things more remote and of less value to regain financial balance. If the "improvements" however are local while the whole endeavor slips, it's like painting the propellers on a crashing blimp.

In this category go salary adjustments for the well paid, digital courses to save money, raising tuition, improving efficiencies, reorganizing UCOP, and eliminating less prestigious sociology departments. In this category also go more efforts by Development to raise private funds, seeking yet more sponsored research, eliminating college sports, and better advocacy with the state to compete for state funds.

These are all fine bits of potential response to an immediate problem. Perhaps folks want to believe things are really close to where they were, and where they need to be again, if not for X which has gone a bit off, and the administration will put it back, aided by letters of appeal from the faculty and staff.

What if things are not going to go back to "normal"? What if the master plan is broken and has been for a decade? What if the administration is incapable of taking the actions that have to be taken? What if the public interest in public education is devastated by K12 and is merely moving now into higher education, where there is are no remaining political means to get re-elected by supporting education? Then what?

I'm thinking of alterity in history. Or Jared Diamond's concern for the values that sustain a society being the ones that lead it over the cliff when it finds circumstances have changed for good. Or Jim Collins' discussion of the warning signs on the road from "great to good"--or worse.

So what of it? Is the present a minor setback on the road of progress, one that other publics appear to be weathering with less fuss?

Or is UC in the vanguard once again, dealing with something very difficult, very new, developing over a decade into something that is different, and it's going to stay this way and disperse across the country?

I'm torn. Is this over dramatic? Misplaced ado inviting panic and bitternesses? A pseudo crisis to beat up some old enemies when they are vulnerable? Is the money all there, just being hoarded or wasted or misdirected? Or, is it a state problem and not a UC problem at all--the state has to come to grips with its districting, taxation, and spending...and UC should wait this out without getting all fidgety?

Or are incremental responses not going to cut it? Are the state's present problems intractable in the time frame that UC needs support? Does UC the world leader need to put its world leaders forward in place of its incremental improvement administrative managers, and address big-time systemic changes with new values, new approaches? Should it do this only when forced to by dire necessity? Should it do it because it sees an opportunity and chooses to exploit it?

Is this a big thing, or not?

Bob Samuels said...

More than half of the UCs total operating budget goes to compensation. I think if we only work on the state issue and not our own issues, we will never solve our problems. Everyone is finding ways to justify the recent escalation of wages for the people at the top coupled with the relative fall of wages for everyone else. If we buy into this model, it does not matter how much the state gives UC, we will simply defund undergraduate education and subsidize the money-making sectors.

Anonymous said...

I'm sorry but the relative compensation within different parts of the UC is totally not the point. The flaws in the calculations have been pointed out by a previous poster. But beyond these flaws, the question is what all faculty are paid relative to their peers at other schools. Law and medical faculty are paid more because they have high-paid outside employment options and os the going rate for faculty in these fields are just higher. Besides, within UC, these units are highly, if not entirely self-financing. Its arts & sciences which are highly dependent on state support. If you are seriously suggesting that we cut the salaries of the law and med faculty to better compensate A & S, then you are suggesting that we make the law and med schools mediocre. In fact, faculty salaries in ALL UC schools lag their private competitors. The advantage that the professional schools have, if you can call it that, is that their fees are not a matter of public concern in the way that undergrad fees are. I am sure that there are some overpaid administrators whom we would be better off without - in fact, I could name a few. But suggesting that we raid the professional school kitty to balance the a&s budget is way off base - plus of course, it would DESTROY faculty unity, which is one thing we have going for us now and one thing I would think an AFT rep would be interested in maintaining.

Anonymous said...

Another datapoint not listed:

Between 2005 and 2008 the academic salary cutoff that requires Regental approval increased from below 200K to above 200K. Therein may lie an important issue.

Also speaking as one academic professor who makes (slightly) over 200K, I would not have come to UC without the salary - I was hired less than 10 yrs ago as a full prof with a competing offer from an Ivy League School. Moreover, I bring in around 10X my general fund salary in research grants, so in some sense UC is making money off of my salary not losing it. Rather than focus on me per se, the point is that many "high earners" are high revenue generators and cutting them back is cutting the nose to spite the face. I shudder to think about trying to recruit some of my peers from Ivy-type places now that furloughs are in place. In the case of long term faculty who have lagged in salary - my dept has done a good job of getting equity raises for these people - at least the research active ones - perhaps its time for other depts to do the same?

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