Kay L. McLennan

July 1, 2000

As the industrial revolution at the end of the nineteenth century created the wealth that provided

the base for postsecondary education and attendant professionalization, so the globalization

of the political economy at the end of the twentieth century is destabilizing patterns

of university professional work developed over the past hundred years.

Globalization is creating new structures, incentives, and rewards for some aspects

of academic careers and is simultaneously

instituting constraints and disincentives for other aspects of careers.

As illuminated in the passage above, numerous global changes are converging on the academic profession simultaneously. Examples include the use of distance education to build transnational markets for higher education and calls for the instantaneous deployment of new curriculums to help students meet the workplace challenges of rapidly advancing technology and expanding global markets. In addition, the academic profession has numerous locally observable destabilizing forces to mitigate.

Using the larger global setting for the academic labor market as a backdrop, the purpose of this paper is to report the findings of a literature review of three of the major observable destabilizing forces in the market for college instructors. In addition, where applicable, simplistic models of the different market structures are utilized.

More specifically, the first characteristic reviewed relates to how the market does not follow the usual pattern of seniority being associated with lower wages. Second, the establishment of a duel/segmented labor market by the almost exponential growth in the use of non-tenured instructors (including part-time faculty) is explored. Also, where college professors/instructors engage in a disproportionately high amount of consulting work outside of their primary academic institute work setting, the amount and likely impact of this outside work is reviewed. Finally, the discussion is concluded with recommendations for areas that need further investigation.

Looking first at the supply of labor in the college professor/instructor market, the first notable characteristic is the abundance of participants (in spite of the significant graduate level—master’s or Ph.D.—education requirement). In fact, starting in the early 1970s, the number of Ph.D.s granted in the United States far exceeded the level of demand for academic purposes (Langton and Pfeffer, 1994) (Roemer and Schnitz, 1982). In addition, while the market is considered efficient in the sense of mobility (based on adequate knowledge of available positions and comparative salaries), once tenure is achieved, factor mobility declines. Further, the wide variation observed in wages for academicians points to limited mobility or "may be a consequence of the fact that oversupply affects primarily the wages of new entrants" (Langton and Pfeffer, 1994).

On the demand side of the equation, decreasing public funds and enrollment increases halted the dramatic build up in higher education during the 1950s and 1960s (Kucera and Miller, 1988). In turn, the past three decades in postsecondary education could be characterized as fiscally austere (Kerlin and Dunlap, 1993). But according to Slaugher (1993), postsecondary education is being "restructured" as opposed to "retrenched" and the restructuring has included draconian techniques "similar to blue-collar workers: discrediting unions, speed-ups, give-backs, increased use of part-time labor."

In summation, the imbalance in the supply and demand (excess supply) for college professors/instructors has primarily resulted in drastic losses in real income. Appearing in print almost 40 years ago, Amuzegar (1960) succinctly summarizes the plight of faculty salaries.

Curiously enough, many of those who use economic measurements in describing and deploring the dilemma of the college professor seldom ask themselves why the university professor’s pay is less than that of the bartender or the garbage collector. If they did, they would be bound to find their answer in the simple economic fact that those who seek higher education are fairly lucky: they are not required to pay much for it. But those who cry their hearts out in a bar corner, have paper hung on their bourgeois walls, or have their garbage removed are not so lucky: they have to pay dearly.

Building on Amuzegar (Ibid.) further mention of the comparison of faculty incomes to the incomes received by ball players and prize fighters, Figure 1 below utilizes a comparative model to highlight the limitations of college teacher earning potential when compared to professional athletes.

 The Paradox of Seniority in the Professor/Instructor Labor Market

In contrast to the overwhelming majority of other labor markets, in the professor/instructor labor market, seniority is associated with lower (not higher) wages. This finding was reported by Ransom (1993) when he discovered that "national data suggest that salaries fall by as much as 0.5 percent per year of seniority." Further, not only do "data from individual universities suggest that the decline may be about 1 percent per year of seniority… and …a professor of average seniority could increase his or her salary by 5-10 percent by moving to a different institution."

The explanation offered by Ransom (Ibid.) to account for this unfavorable seniority aberration calls into play the economic theory of monopsonistic discrimination. That is, where a monopsony is defined as only one buyer of a good or resource (like the one college in town), monopsonistic firms typically do not have an incentive to expand employment until the marginal revenue product equals the wage. This relationship is illustrated in figure 2 below where the monopsony institution is able to exert market power to keep wages at the W_m rate rather than pay the market clearing or equilibrium rate of W_c.

Further, as explained by Langton and Pfeffer (1994), reduced mobility within a market increases wage variation. "This result occurs because high mobility provides opportunities for both employers and employees to share information about wages…and…when mobility is low, institutions can develop wage structures less sensitive to market pressures" (Langton and Pfeffer, Ibid.).

Within the teaching profession there is a further segmentation on the basis of tenure and non-tenure (including part-time) appointments. According to the American Association of University Professors (1993), over half—part time faculty hold 38 percent and full-time, non-tenure track faculty hold 20 percent of all appointments--of all faculty positions in American higher education are either part-time or non-tenure track. This now dominate group of non-tenure faculty is expected to grow larger still since it is considered to be the direct result of continuing retrenchment/restructuring (Slaugher, 1993).

According to the early work of Tuckman and Caldwell (1979), the likely modeling of the market for part-time faculty assumes a large supply of labor. That is, in medium to large cities, the supply of instructors comes from three different sources: individuals are not available to teach full-time; skilled professionals available to teach evening courses; and individuals with more limited credentials than those of the full-timers. In Figure 2 below, the medium to large city instructors have a highly competitive, flat supply curve. In turn, an increase in demand has no bearing on the prevailing wage rate. In contrast, institutes of higher education that are located in more rural areas face a diminished supply of qualified part-time workers and therefore must pay higher wages and will need to further increase wages to attract additional lecturers.

 On the matter of the quality of instruction attendant to part-time teachers, Tuckman and Caldwell (Ibid.) postulate "some part-timers enter academe with the traditional skills associated with teaching, research, public service, and administration; others are able to acquire these on the job…[but]…to the extent their skills are unrewarded, an incentive exists for part-timers not to acquire or maintain these skill."

Clearly in the event instruction skills are neither developed nor maintained, the quality of higher education will suffer. Still, the larger issue to Roemer and Schnitz (1982) and the American Association of University Professors (AAUP) is the unexpected and undesirable outcome of the part-timers being able to subjugate the position of the tenured faculty. This concern has motivated the AAUP to develop guidelines/regulations for the use of part-time faculty members, including limiting the use of non-tenure appointments to no more than 15 percent of total instruction in an institute and providing salary and other benefits on a fractional basis

Unlike other professions, college professors/instructors are thought to engage in a disproportionately high amount of consulting work or employment outside of their primary academic institute work setting (Boyer and Lewis, 1984). The reasons most often cited for this phenomenon include a view that consulting is encouraged by higher education institutes to increase professional reputation, the abbreviated number of annual work weeks in academic settings and a lower salary structure (Boyer and Lewis, Ibid.) (Marsh and Dillon, 1980).

The concern surrounding faculty consulting is that it "may result in neglect of students and other university responsibilities, abuses of academic freedom, conflicts of interest, and illegitimate use of institutional resources" (Boyer and Lewis, 1984). However, such extensive concern has not been substantiated first because as reported by Boyer and Lewis (Ibid.) supplemental income averages only about 14 percent of total base academic salaries. Second, "faculty do not spend excessive time at these supplemental activities…[and]…these activities generally complement rather than detract from faculty responsibilities" (Marsh and Dillion, 1980).

More importantly, where "American colleges and universities are increasingly involved in economic development activities" (Cote and Cote, 1993), "innovative universities are looking at these ventures as new markets for research that may gradually substitute for declining enrollments" (Bird and Allen, 1989).

Conclusions and Recommendations for Further Investigation

American higher education being called on to play a major role in facilitating the integration of globalization for all our citizens. Yet, as evidenced by the literature reviewed in this paper, the present market structure for college professors/instructors is not serving the best interests of the central figures in higher education. Both seniority-based declining incomes and a dual/segmented labor markets are major destabilizing forces in an already beleaguered labor market.

How should the academic profession respond? Three areas for consideration or further research and analysis are delineated below.