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What's the Difference Between Universities and Corporations? It's Getting Hard to Say

David Callahan

We need a return to valuing equity in higher education

Do you remember what Mario Savio argued at UC Berkeley when he famously led the Free Speech Movement in 1964? He said the university had become an "autocracy"and a "machine" -- an institution at odds with democracy. 

Boy, those were the good old days. Now things are even worse: many universities have come to mimic the worst behaviors of lean-and-mean corporations. I'm hardly saying anything new here, and certainly not something that Jim Sleeper hasn't said a dozen times in the past few years on HuffPo. But new details keep coming to light on just how bad things have gotten. 

This week, the Institute for Policy Studies released a report that shows soaring executive pay at top public universities. That finding tracks with another study released this week, the Chronicle of Higher Education’s annual survey of public university presidents’ compensation, which found that nine chief executives earned more than $1 million in total compensation in 2012-13, more than double the number of the previous year and triple the number who earned that kind of money 2010-11. One university, Ohio State, was paying its president $6 million until he resigned last year. 

Where IPS's study breaks new ground is that it links rising executive pay with two of the most negative trends on today's campuses: growing student debt and an increasing reliance on part-time adjunct professors who often earn little pay. The study found that "The sharpest rise in student debt occurred when executive compensation soared the highest." And rising executive pay at all universities has paralleled the growth of an academic underclass of adjuncts who can't get ahead teaching a few courses per semester and lack benefits. 

The report's authors don't argue that there is direct causality here, that all the money going to the top is why students borrow more or schools rely more on adjuncts. But the correlation is pretty striking, and the broader pattern is deeply disturbing: that universities have embraced key strategies of the corporate sector without sensitivity to other considerations. 

Corporations care far more about increasing shareholder value than the social ideal of equity, so they don't think twice about paying whatever it takes to get top talent. But you'd think that universities -- with their social mission -- would seek to balance their search for the best CEOs with keen attention to the values underlying their institutions. You'd also think that schools wouldn't have to pay a million bucks for a good president. Is top talent really that scarce? One thing that research on corporate compensation has shown is that bottom-line results often have little to do with executive compensation. Why don't those findings get more attention on campuses?

As for part-time labor, and contract employees, corporations have been pioneers here because relying on contingent workers saves them a bundle and the labor market is weak enough for them to get away with this. Corporations exploit people because they can. And with lots of unemployed PhDs floating around, universities clearly are able to exploit academic workers. It's a nice racket they have going: First, they accept too many PhD students in order to provide cheap labor for teaching seminars and grading paper. Then they take advantage of the surplus of PhDs once these people graduate. 

And again, where's the values check that you'd expect from a nonprofit institution committed to advancing learning and knowledge for the good of society? It should be there, but too often it's not. Yes, universities can exploit labor. But they should know better.

And the exploitation turns out to be even worse than we think, according to news reports that workers building NYU's new Abu Dubai campus were mistreated. According to a New York Times article:

workers being arrested, beaten and deported to their home countries after striking over pay. Recruitment fees, of approximately a year’s wages, were all but required, and laborers had to work overtime, sometimes seven days a week, to earn the base pay they were promised. 

The Times also noted that such conditions were common in Gulf states, but still. The broader story here -- which Jim Sleeper has been zeroing in on -- is that universities have been acting like corporations in seeking out profitable overseas markets even if it distorts their mission. Can it be so surprising that bad things would happen given that mindset? 

The good news in all of this is that one big difference between universities and corporations is that the latter are heavily dependent on government funding in various forms, federal and state. So democratic accountability can exist here. If the White House is pressing universities to do more to combat rape on campus and contain costs, why not press them on a range of other issues, too? 

Reform can happen here. If it becomes a priority.