The One Percent: The Corporatizion of American Higher Education

Co-authors Andrew Erwin and Marjorie Wood discovered student debt and low-wage faculty labor rose faster at state schools with the highest paid presidents than the national average. Moreover, administrative spending surpassed scholarship spending by more than 2 to 1 as full-time faculty declined as a percentage of full-time equivalent (FTE) faculty.

Following the fall 2008 financial crisis we expect to see drastic reductions in overall pay – especially at the executive level. This is not the case. In the “top 25” presidential pay rose from $727,002 in 2009 to $974,006 in 2012 – an average inflation-adjusted increase of 34 percent in only 3 years. Comparatively, the American Association of University Professors reports full-time professorate pay at public and private research universities rose 2.2 percent and 7.2 percent, respectively, from 2007-08 to 2013-14.

The growing disparity between top 25 executive and faculty pay illustrates that universities are becoming more corporate. Accordingly, the AAUP opines:

Disproportionate salary increases at the top…reflect the abandonment of centuries-old models of shared campus governance, which have increasingly been replaced by more corporate managerial approaches that emphasize the “bottom line.”

Professional employees are now the largest group of non-instructional staff on campus. The Delta Cost Project estimates these positions (Business analyst, human resource officer, admissions officers among others) rose, on average, 2.5 to 5 percent per year between 2000 and 2012 and now comprise nearly one fourth of the on-campus workforce.

Administrative spending has similarly been disconcerting. Spending per student for administration had increased 61.2 percent between 1993 and 2007 according to a recent Goldwater report. CCAP backs this claim, showing that college administrative expenditures have grown faster than educational expenditures. Benjamin Ginsberg, professor of political science at Johns Hopkins University, griped that administrative spending between 1947 and 1995 had increased 235 percent, inflation adjusted.

These complaints have been overlooked while the growing rift between faculty and administration poses a threat to higher education. Faculty are upset seeing their universities increase administrative spending and power. Administrators respond by suggesting increasing enrollments and heavier federal mandates are to blame. Whatever the cause, higher education is no longer an institution – it’s an enterprise.