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What the Higher Ed Bubble is Not
Various readers have sent in observations concerning David Spalding’s commentary at the November Alumni Council meeting on the rising cost of higher education. Here are the Alumni Council’s official minutes:
Next on the agenda was a presentation titled “The Cost of Higher Education” by David Spalding ‘76, the senior vice president and senior advisor to the president. In his report, Spalding put into context the current educational landscape, and shared data that supports the difficult fact that college tuition continues to outpace median family income and the cost of medical care, food, and housing; but also explained what Dartmouth is doing to make its education affordable. As far as productivity and quality in relation to cost, he pointed out that any increase in productivity would negatively affect the preservation of quality. Furthermore, when examining the price behavior of higher education within the right comparison group—with physicians, legal services, and dentists—the workforce of colleges and universities is comprised primarily of highly educated, highly skilled workers, which means increasing wages. Therefore, the rising prices can be attributed to the relatively slow productivity growth (preserving quality) and expanding “people costs.”
Do Spalding’s comments stand up to analysis? Is the Dartmouth workforce made up of employees who are the academic equivalent of “physicians, legal services, and dentists”? Let’s look at the details. First of all, as of the Fall of 2011, the College had 1,016 members of the faculty. However, of these professors, only 420 had tenure, the remainder were either tenure track (150) or not on a tenure track (445). The latter category includes a great many adjunct professors who are paid on a course-by-course basis at a low rate of $10,000-$15,000/course (if they teach six courses in an academic year, that’s $60,000-$90,000/year — a lot less than doctors, lawyers and dentists).
But let’s give Spalding the benefit of the doubt that these various teachers are professionals whose salaries have risen rapidly over the years. But how about Dartmouth’s other non-faculty employees, of whom there were over 3,175 at the end of 2011 — over triple the number of professors.
Perhaps the 327 members of the executive/administrative/managerial category have seen large rises in their salaries, along the lines of increases enjoyed by the aforementioned doctors, lawyers and dentists. But for the remaining 2,800 or so employees — the cooks, janitors, administrative assistants, carpenters and electricians, deans, junior deans, assistant junior deans — these people are equivalent to middle managers and workers employed at companies throughout the Upper Valley. Their compensation comprises the bulk of the cost of a Dartmouth education. At typical companies, including my own, their wages have remained quite flat for a great many years, but not at Dartmouth.
Sadly for us, David Spalding, a former employee of the Lehman Brothers investment bank, knows the economic truth about Dartmouth as well as anyone. Why does he not share it honestly, rather than giving us another chapter in the administration’s endless procession of distortions and lies?
October 18, 2009
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August 23, 2009
Fare Thee Well, Tom Crady
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May 31, 2009
Kangaroo Court, Indeed
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