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Wednesday, December 29, 2010

Chemerinsky: The Impact of Faculty Salary Cuts at UC Law Schools

UC Logo L.A. Times op-ed, Invest in Higher Education, by Erwin Chemerinsky (Dean, UC-Irvine):

The proposals for the University of California now being considered in Sacramento — limiting tuition and fees, freezing executive and faculty salaries and increasing legislative control over the UCs — are well intentioned. But they are a recipe for ruining a great public university system. ...

One proposal being discussed is freezing or decreasing executive and faculty salaries. But this is no answer. If the University of California is going to retain and attract high-level faculty, it must pay the same as comparable schools across the country. Over the last few weeks, I have negotiated salaries with superb professors we are attempting to recruit who are currently teaching at Harvard, Northwestern and Yale. The University of California must match their current salaries or they will not come. As much as I love living in Southern California, I could not have afforded to leave Duke University if it meant taking a substantial pay cut.

Most university professors make relatively modest salaries. In professional schools, salaries are higher because that is what the national market dictates. Paying significantly less than other schools will mean that the best faculty will leave and those with other choices will not come. The quality of teaching and research will steadily decrease and the university will spiral downward, as it will then be ever harder to attract excellent students and faculty.

For contrary perspectives, see:

  • University Diaries, Today’s Shameless Award Goes to… "... the dean of the recently opened, totally unnecessary, school of law at the University of California Irvine. In response to the terrible crisis in that state’s public system, Erwin Chemerinsky warns darkly against freezing or decreasing executive and faculty salaries. ... Well, let’s get to it. How much do you make? How much do your law school colleagues make? How much do they teach? How many of your graduates get jobs as lawyers (the Irvine school opened despite the fact that California has a glut of lawyers, and large numbers of unemployed law school grads)? And, uh, didn’t you tell me, when justifying your unjustifiable new school, that your faculty would be all about turning out public interest lawyers? So… hard-nosed, hyper-capitalist, private sector salaries for our faculty, but of course! And crappy non-profit positions for our idealistic students. ... Listen to Kristin Luker, Chemerinsky. She’s a colleague of yours at Berkeley."
  • Cloudminder (Dedicated to UC Alumni in Support of Reclaiming & Reforming the University of California): "Erwin Chemerinsky is dean of the UC Irvine School of Law, he said this: "Nor is there reason to believe that there are significant wasteful expenditures within the UC system." ... That quote (by a dean) does not help make the case for UC Irvine's controversial new law school or securing its hoped for future prestige. We need Deans who can look at waste, fraud and abuse news stories and confront the problems and implement real solutions-- not obfuscate, brush off real problems, spin."
  • Roy Meddock: "Absolute nonsense. The UC President gets a salary of $800,000.00/yr plus amazing benefits such as $30,000.00 for a dog run. No more tution increases. Stop over paying faculty. Do not run Universities like Club Med."

(Hat Tip: Jack Chin.)

Update: Stephen Bainbridge (UCLA):

If you think California benefits from having someone who is one of the 100 most influential people in corporate governance doing award winning teaching at a public university, you're going to have to accept UCLA paying something near market price.

But then we come to this little nugget:

Nor is there reason to believe that there are significant wasteful expenditures within the UC system.

Sorry, Erwin, but you just went off the rails. The UC Merced campus was an unnecessary financial burden. And speaking of unnecessary UC programs, your law school at UC Irvine was documented to be completely unnecessary.

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I can not say what University I teach at but can say that it is a state university on the east coast. A couple of years ago when the state cut funding to the university by millions and administration was crying that they had no money they gave them selves a very nice raise with the same argument Chemerinsky makes. Oh we have to do it because they won't come otherwise. This is the same argument that Boards make in deciding compensation. It is a spiral that ensures everyone one at the top makes out like bandits. Being one of the lowly Lecturers some might say I am jealous but I am sorry having spent 28 years in industry I can tell you none of them are worth that kind of money, education or industry. You can look at the multiples in executive salary vs employee salary from say 20 years ago and now. No way did the executives get that talented.

Posted by: Rich | Dec 29, 2010 5:11:42 AM

The real issue is that most of the vast increases in funding have been piped into facilities and administration. Now that it's leveling off, are they cutting staff positions? Rolling back campus construction? Eliminating "nice to have" initiatives in campus life and entertainment? No, of course not, they're cutting the university equivalent of police and firemen, knowing that the argument to reverse the cuts will be easier that way.

The Administrations feathered their own nests during the boom times, and now they are defending them. Real cuts aren't even on the table yet.

So the Dean's argument is a non-sequitur.

But if you want me to target his argument directly, try this: California has a vast, sprawling university "industry". Some of that is to serve their local market, some is strategic, to support Silicon Valley and the biotechs. But it isn't "university systems" that get rankings, it's individual schools. So let's look at those:

Going from US News rankings, at the top are Stanford and CalTech-- both are private and so from the state's point of view are cheap/free (never mind federal research dollars for a second). Then we get to the state university system: UC Berkeley, USC, UCLA, UC San Diego, UC Davis, UC Santa Barbara.

Then, after all these schools, you finally get to UC Irvine. I can see the rationale for their flagship schools (and even having more than one flagship given the size of California). I can see the argument for a strong set of second-tier institutions, too. Can anyone explain why Irvine, ranked ninth in the whole wide state, is recruiting from Harvard, Northwestern and Yale? Just what is Chemerinsky saying here? By his own argument, being world-class is expensive, and so from a return-on-taxpayer-investment perspective, Irvine shouldn't be frozen, they should be *gutted* to keep the top California universities on top.

Chemerinsky is arguing against freezing or cutting the law school. What he should be defending is the law school's existence in the first place.

Posted by: asdf | Dec 29, 2010 6:19:10 AM

I see Chemerinsky has his usual awful sense of timing and message.

Posted by: SPQR | Dec 29, 2010 6:33:24 AM

I wonder if Chemerinsky would make the same argument about private sector CEO salaries?

Posted by: Taylor | Dec 29, 2010 7:09:22 AM

earth to Erwin, the times they are a changing.

Posted by: PTL | Dec 29, 2010 7:11:09 AM

They consider themselves to be the equivalent of heads of state. Always jetting off to Europe or Asia for conferences (where, coincidentally, they have friends or relatives) or for recruitment of name profs so they can keep the scheme going. After all, they are spending someone else's money.

Posted by: PJ | Dec 29, 2010 7:49:17 AM

When corrupt, tenured fabulists like this fellow and his faculty stops supping on 23 year old students who are taking out government-subsidized, undischargeable student loans, all as part of a cartel set up by the ABA et al, and he instead puts himself into a truly competitive marketplace, then I will listen to his pleas that the market is dictating his salary.

Until then, to paraphrase Johnson's thought about American revolutionaries, why am I hearing so much about the hard demands of the market from the drivers of a system largely insulated from the markets?

Posted by: lol | Dec 29, 2010 8:19:21 AM

USC is also private.

Posted by: Michael Kennedy | Dec 29, 2010 8:24:08 AM

I'm sure we'll get more Cherminsky bashing before the day is over, but its worth noting that he has a point. What is even funnier is that Cherminsky's point is one that Cherminsky-bashers are actually sympathetic to. Given a choice between University X and University Y, Professor Z will express a greater preference for the school that offers more money.

However, there's a lot more to consider than just that one point. The UC system is a $4B research enterprise (1/10th of all sponsored research funding in America). The people who bring in the money that supports valuable research and scientific training are university professors. That harder you make to to retain those faculty members, that harder you make it to retain that $4B pie. Most science and engineering faculty members at UCs bring in more than enough research dollars to justify their salaries. I'd rather not give these folk a reason to leave.

That being said, its not clear to me what value UC-Irvine's law school adds. It doesn't bring in research dollars. Its no secret that the salaries of law school faculty are inflated by USNWR. Schools pay (hyper) inflated salaries to faculty "superstars" in the hope that their peers will rate them more favorably in next year's USNWR peer survey.

Don't believe me? (http://www.collegiatetimes.com/databases/salaries/university-of-michigan-ann-arbor) How else do you explain how 8 of the highest 10 individual salaries at the University of Michigan are the salaries of law school faculty. Are you kidding me? Do they add more value than the surgeons, engineers, and scientists employed by Michigan? Is getting published in a STUDENT-reviewed journals and teaching TWO classes a year really worth $700k/yr? Really?

UC - Irvine was supposed to be a different type of law school. Its time it becomes just that. One that values instruction and training over how many peer rating points a faculty member can bring in with thee next USNWR survey.

Put me in the layoffs over cuts party, but cutting law school faculty is on the top of my list.

Posted by: Nolo Contendre | Dec 29, 2010 8:43:10 AM

Let me have a free hand with my University budget and I could slash at least 10% waste. If I wanted to be harsh, I could cut 30% by including any service not used by at least 5% of students.

Posted by: jorgxmckie | Dec 29, 2010 8:56:15 AM

asdf:

"Going from US News rankings, at the top are Stanford and CalTech-- both are private and so from the state's point of view are cheap/free (never mind federal research dollars for a second). Then we get to the state university system: UC Berkeley, USC, UCLA, UC San Diego, UC Davis, UC Santa Barbara.

Then, after all these schools, you finally get to UC Irvine. I can see the rationale for their flagship schools (and even having more than one flagship given the size of California). I can see the argument for a strong set of second-tier institutions, too. Can anyone explain why Irvine, ranked ninth in the whole wide state, is recruiting from Harvard, Northwestern and Yale? Just what is Chemerinsky saying here? By his own argument, being world-class is expensive, and so from a return-on-taxpayer-investment perspective, Irvine shouldn't be frozen, they should be *gutted* to keep the top California universities on top."

I am sympathetic to your point, but you need to get out of the USNWR mindset for a second. The logic behind gutting Irvine, is the same logic you would have used to gut Santa Barbara 15 years ago. Guess what? Its 4th in research impact in the US (http://www.sciencemag.org/content/330/6007/1032.summary). The strategic plan for Santa Barbara was to build a top notch physical sciences program. And guess what? They did. They used high salaries to recruit a few Nobel laureates and superstar physicists and now have one the best physics/electrical/materials programs in America. I'd count 4th in research impact (vs. volume) as a win.

I don't know what the plan for Irvine is/was, but I'd double check before gutting it based on undergraduate USNWR rankings as you suggest. Contrary to popular conservative myth, the people making investment decisions with respect to the system aren't complete knuckleheads. UCSD, UCSB, etc... were created only very recently and are now top research programs in the country. Can anyone name other schools that are so young and just as well regarded (not by USNWR, but research output)?

God, I hate USNWR!

Posted by: Nolo Contendre | Dec 29, 2010 9:04:23 AM

Right-on Erwin, just what CA needs are more egg-heads from the Ivy's.
They've done so well by us the last four decades, it is imperative that we bring more of them here.

Posted by: AD | Dec 29, 2010 9:57:47 AM

Michael: Chemerinsky is at UC-Irvine not USC.

I think that if the state budget is 20% out of wack, every body on the state payroll who makes more than Federal minimum wage should get a 20% reduction in pay and benefits. Same with the Feds, with the exception of Constitutionally protect judges and soldiers in combat units.

Posted by: Walter Sobchak | Dec 29, 2010 10:12:02 AM

The definition of chutzpah used to be someone who kills his parents and throws himself on the court's mercy as an orphan. I think this probably is even better.

Posted by: mike livingston | Dec 29, 2010 11:04:36 AM

To be fair, Chemerinsky did not start the school.

So, blame/anger should be directed at Michael Drake and the rest of the Irvine administrators that were hell-bent on having a law school despite every indication that it was a terrible idea.

It is kinda hilarious though, that Chemerinsky thumbed his nose at the North Carolina law deanship because of the school's "inadequate" funding, and now he finds himself in the same situation. Karma?

Posted by: bobby | Dec 29, 2010 12:38:05 PM

Walter Sobchak:

"I think that if the state budget is 20% out of wack, every body on the state payroll who makes more than Federal minimum wage should get a 20% reduction in pay and benefits. Same with the Feds, with the exception of Constitutionally protect judges and soldiers in combat units."

Funny how blunt force instruments (across the board cuts), like the suggestion above, are never implemented in the private sector. But I guess the concept of talent, paying for it, and retaining it, is irrelevant to any discussion of the public sector? Only companies like AIG (or similar enterprises that would have failed without massive government intervention) have any talent worth trying to retain, right?

jorgxmckie:

"Let me have a free hand with my University budget and I could slash at least 10% waste. If I wanted to be harsh, I could cut 30% by including any service not used by at least 5% of students."

Imaginary solutions to real problems are fun! Its like all the people who pretend they could slash the federal budget by 30% in the blink of an eye.

Here - (http://www.universityofcalifornia.edu/news/factsheets/thefacts_budget_11_17_10.pdf) - slash away. Let's just try for a 10% cut, but you don't get to live in Narnia. Follow up on the consequences of the cuts.

Speaking of waste, (http://www.universityofcalifornia.edu/budget/documents/state_general_funds_chart_c.pdf). Clearly, we Californians have been turning to criminal behavior at an increasing rate over the last 30 years. The whole Tough on Crime campaign, which was a bunch on mindless demagoguery to get elected, has been all sorts of awesome for the state.

Posted by: Nolo Contendre | Dec 29, 2010 12:46:16 PM

A well-off professor with an income in the hundreds of thousands of dollars complaining about the effects of changes in fiscal policy on his personal situation?

Lucky for Chemerinsky that's he's not a conservative like Todd Henderson.

(I confess I don't think I fully understand the argument. Aren't the faculty salary wars just a positional arms race? Don't they ultimately harm, not benefit, the students, through higher costs and fees? But I'd rather focus on Chemerinsky's insistence that he couldn't afford a substantial pay cut.)

Posted by: Thomas | Dec 29, 2010 12:57:10 PM

Colleges and Universities (like other labor market participants) must pay market rates for labor. Chemerinski correctly points out that, if they do not, qualified faculty will leave, or choose other places of employment. The idea that college faculty are immune to labor market forces is not only absurd, it is also irrational.

My Ph.D-level economics professor put it this way when asked about the high finance professor salaries in relation to their lowly english or philosophy counterparts: if finance professors started falling from the sky tomorrow, their relative salaries would drop. The question is by how much and how soon? As for english and philosophy, the demand is simply not so high or there is an over supply (no market premium). In other words, if you teach accounting or finance and conduct capital markets research, then, depending on your pedigree, you'll be paid handsomely. If you teach english literature and conduct research on the Federalists Papers, you're doomed, regardless of your pedigree.

At my school, we have adjunct and tenured professors who strongly campaign for "equal work, equal pay." For this reason alone, they support pay cuts or no merit raises for certain disciplines. Most of these professors have never had a private sector job, do not conduct research, are middle-market or average in the classroom, and are not marketable, and frankly, in the wrong discipline. Yet their "I do not get paid as much as you" complaints are strong. They ignore, however, that some disciplines demand market premiums while others receive a heavy discount. If you do not like it, then pick a field that demands the premium, or go into private industry.

Posted by: ECON101 | Dec 29, 2010 1:02:36 PM

Also, these "Harvard, Northwestern and Yale" folks would be remiss if they didn't see the writing on the wall. That writing says:

"Don't leave a top PRIVATE school for an uncertain future at a state school in a quarky geography, unless you are out of your freakin mind!"

Chemy's a nice guy, and very convincing, but I wonder how many of his current recruits are second guessing their decision.

Posted by: bobby | Dec 29, 2010 1:57:57 PM

Maybe if we weren't paying H.S. dropouts six figures (after five years of service) to monitor prison facilities, there'd be some money left over for the more useful segments of our public infrastructure.

Posted by: Nolo Contendre | Dec 29, 2010 5:36:33 PM

Nolo: "Funny how blunt force instruments (across the board cuts), like the suggestion above, are never implemented in the private sector. But I guess the concept of talent, paying for it, and retaining it, is irrelevant to any discussion of the public sector?"

1. Blunt force instruments happen all the time in the private sector. Ever heard of a hostile takeover? Plant closings? Mass layoff?

2. Talent. The idea of a talented law prof is almost ludicrous. I have been a lawyer for 35 years, I have been a law teacher, a corporate lawyer and a law firm partner. I have meet, hired, and opposed talented litigators, transactional lawyers, and judges.

To my mind the purpose of law school is to teach its students the skills they need to become lawyers. Therefore a talented law prof is one who teaches well.

Unfortunately, teaching is not paid for by university based law schools. They want "scholars" who will turn unreadable but politically correct "research" (a/k/a flatulence) to be published by "prestigious" law reviews (i.e. Top 10 schools) in mass quantities. If lawyers can read it or use it, that is points off.

It does not take much to be a law prof, a law degree and a few years of experience in the subjects you will be teaching. You don't even have to be a jacka$$ (although it helps). The entire faculty of most law schools could easily be replaced by random lawyers who are smarter than the ones they replace and who would demand less money for the cushy life of a law prof. Steady pay check, benefits, no joint and several liability for your lunatic partners, no partnership meetings, no sucking up to crooked and abusive clients, summer vacations. Like I said, kill them all, God will know his own.

Posted by: Walter Sobchak | Dec 29, 2010 6:52:25 PM

Nolo: You make a good point, but I'm not talking about impact of research from a journal citation point of view. I'm talking about the impact of that research on the economy of the State of California, which is (at least until it goes bankrupt) footing the bill.

You're absolutely right that US News rankings are a coarse, imperfect measure of the quality of an institution. And, for that matter, the right unit of analysis is the department, not the institution. But it doesn't do more than mess about on the edges of my core argument: there's a point of diminishing returns for university quality.

With sufficient (borrowed) cash, California could no doubt create five, ten, even fifty more tier 1 public research universities. Is it worth the cost? How many is enough? There's SOME point where the marginal return drops below zero-- I'm inclined to think we're well past that, but I'd love to see evidence that we aren't.

The debt is crushing California in its own right. But even if we ignore this for a moment, the funding to Irvine (or, if you like, Santa Barbara) is necessarily money that might have been spent on making Berkeley or UCLA that much better.

Pumping UCSB's rankings isn't a win if it costs too much or if the money is diverted from some other activity that might have been even more effective. UC Santa Barbara's rankings are an end in themselves only for UCSB. For the rest of the University System, the state government and the citizens of California, they're either a constituency to be placated or an investment with a price tag and a payoff.

Posted by: asdf | Dec 29, 2010 8:11:02 PM

It was recently reported that three dozen top administrators in the UC system, who all make $245,000 a year or more, are going to sue the regents unless the suspension of an IRS rule is implemented. This rule requires (if I get it right) that public entities that pay employees more that $245,000 a year only use that figure when calculating pension benefits for them upon retirement. California promised, a decade or so ago, to try and get rid of the rule, and they got their waiver from the IRS about 3 years ago, but they haven't implemented it. Remember, this *only* will change pension benefits for administrators making *more* than $245,000 a year. After all, how is an impoverished retired university administrator supposed to struggle along when he retires in his/her mid-50s with a pension of $183,000 a year? They're going to sue, and try and make the state live up to its decade-old promise, in the middle of an economic crisis, with tuition skyrocketing, and rank-and-file staff taking pay cuts, increased contributions to health and pension benefits, and even perhaps layoffs...and then we have this dingbat, trying to make the point that if we don't pay over-the-top salaries to needless law professors, we won't get the best ones...even though we don't need any more lawyers, at all...

Posted by: DavidN | Dec 30, 2010 12:06:49 AM

Walter

Agreed on law faculty.

asdf

Nolo: You make a good point, but I'm not talking about impact of research from a journal citation point of view. I'm talking about the impact of that research on the economy of the State of California, which is (at least until it goes bankrupt) footing the bill.

Um, you never talked about research. Just USNWR undergraduate rankings. Citation impact, which is meaningless in fuddy duddy fields like law, is strongly correlated with patent filings and licensing revenue.

You're absolutely right that US News rankings are a coarse, imperfect measure of the quality of an institution. And, for that matter, the right unit of analysis is the department, not the institution. But it doesn't do more than mess about on the edges of my core argument: there's a point of diminishing returns for university quality.

With sufficient (borrowed) cash, California could no doubt create five, ten, even fifty more tier 1 public research universities. Is it worth the cost? How many is enough? There's SOME point where the marginal return drops below zero-- I'm inclined to think we're well past that, but I'd love to see evidence that we aren't.

Based on what exactly? Too many educated Californians? The fact the general fund's share of UC system has been FALLING? (http://www.universityofcalifornia.edu/budget/documents/state_general_funds_chart_c.pdf)

The debt is crushing California in its own right. But even if we ignore this for a moment, the funding to Irvine (or, if you like, Santa Barbara) is necessarily money that might have been spent on making Berkeley or UCLA that much better.

So you subscribe to the theory of diminishing returns when it comes to the total number universities, but not when it comes to individual schools? This really is absurd logic. If you think of UC - Santa Barbara as a satellite campus of UCLA, isn't that making UCLA better? Or if you think of UC as one system, isn't that making UC better?

Pumping UCSB's rankings isn't a win if it costs too much or if the money is diverted from some other activity that might have been even more effective. UC Santa Barbara's rankings are an end in themselves only for UCSB. For the rest of the University System, the state government and the citizens of California, they're either a constituency to be placated or an investment with a price tag and a payoff.

What is with you and rankings? The physical sciences programs pay for themselves.

Posted by: Nolo Contendre | Dec 30, 2010 8:14:00 AM