Paul L. Caron

Tuesday, July 5, 2016

UC Berkeley’s Income Inequality Critic's Faculty Salary Puts Him In The Top 1%

UC Berkeley Primary Logo Berkeley BlueCalifornia Policy Center, UC Berkeley’s ‘Income Inequality’ Critics Earn in Top 2%:

Scholars from the University of California at Berkeley have played a pivotal role in making income inequality a major political issue. But while they decry the inequities of the American capitalist system, Berkeley professors are near the top of a very lopsided income distribution prevailing at the nation’s leading public university. ...

Public employee compensation data allows us to measure income inequality on campus. The State Controller’s Public Pay database contains salaries for all UC employees, indicating which campus each employee is on. The Gini coefficient for the 35,000 UC Berkeley employees in the data set is 0.6600 – higher than that of Haiti. ...

According to 2014 data from Transparent California, Center Director Emmanuel Saez received total wages of $349,350.

Its three advisory board members are also highly compensated Cal professors: David Card (making $336,367 in 2014), Gerard Roland ($304,608) and Alan Auerbach ($291,782). Aside from their high wages, all four professors are eligible for a defined-benefit pension equal to 2.5% times final average salary times number of years employed. It is also worth noting that all four are in the top 2% of UC Berkeley’s salary distribution, and that Saez is in the top 1%. ... Robert Reich receives somewhat lower compensation than the four CEG economists, collecting $263,592 in pay during 2014. But Reich’s salary was likely not his only source of income in 2014. Reich makes himself available to give paid speeches through a number of speaking bureaus, charging a fee estimated at $40,000 per talk. He is also likely to receive some income from his books, movies and pensions from previous employers. ...

We’re not saying income inequality is a bad thing; we’re not saying that Reich, Saez and other Berkeley professors should make less than they do, or that student teachers ought to make much, much more. In fact, there are reasonable arguments that income inequality is not only inevitable and even ethical, but that it’s also a generally positive feature of advanced economies.

We are saying there’s something unusual in the Berkeley phenomenon – the high-profile role of high-income earners in criticizing income inequality.

See also Updated Emmanuel Saez Inequality Data: Bottom 99% Had Income Party Like It's 1999, But Top 1% Did Twice As Well

Press and blogosphere coverage:

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Because the "inequality" craze is a war between elites, and has little if anything to do with real people. Look at the election.

Posted by: mike livingston | Jul 5, 2016 4:14:45 AM

What's next, Paul, posting things from the Drudgereport? How is this anything other than an irrelevant ad hominem? Are the only people allowed to earn a competitive salary those that are apologists for the status quo? This blog is really going down the tubes.

Posted by: Brian | Jul 5, 2016 6:22:24 AM

"Income inequality" is a first world problem. The obsession is motivated by envy within the top 10% and especially within the top 1%.

Some super-smart people believe that they would be on the very top in a just world. They would certainly be in the top 0.1%, not merely the top 1% or 2%. Therefore the current system is unjust and must be overturned.

What I have trouble understanding is why anyone would propose solving this problem by adding more government intervention. Government favors and influence, especially at the local level, are behind the financial success of many if not most of the top 0.1%.

Posted by: AMT buff | Jul 5, 2016 9:37:53 AM

AMT buff - Some of Amartya Sen's work suggests that relative deprivation (and not absolute deprivation) is what matters. Envy doesn't adequately capture that.

Posted by: Matthew Bruckner | Jul 5, 2016 11:47:17 AM

What is the argument here? Is it claiming that someone who earns a high salary cannot understand how to do research about income inequality? or that someone who earns a high salary must be hypocritical if they argue that income inequality at the level it has reached in this country is problematic? Or that there is a per se requirement for interest in inequality to be thought genuine that the person speaking have a non-elite salary? Is the post suggesting that Saez and others should have rejected their salaries? The rationale for pointing this out is unclear. One can earn a high salary and realize that one is advantaged compared to most people in this country because of the status system, the hierarchy, the disadvantages and lack of opportunities others face. One can, in other words, earn a high salary but target research to an area in which change is needed. In fact, because it generally takes supportive people in the group targeted for any change before change occurs, it is important that members of the elite support the idea of moving towards a more balanced economy. It isn't surprising that some of the best academics in the country are those who care most about the detriments of income inequality, or that they are in the top 2%. All we law professors do fairly well compared to ordinary working stiffs. What is noteworthy is that these scholars have devoted a considerable part of their scholarly effort to understanding the existence and impact of income inequality. While true egalitarianism may (unproven) have some detrimental effect on the rate of innovation, no one has suggested that the income inequality crisis has anything to do with desiring a state of pure equality but rather of avoiding the damning effects of oligarchy. The question is whether it is fair, good for the economy, good for ALL citizens to have an economy that overrewards those at the top while underrewarding those at the bottom. We currently have that kind of economy, and it leaves many capable people in a miserable state of just scraping by. Finally, note that we know nothing (from this post, at least) about the charitable impulses and actions of the professors named--perhaps they are quite generous, because they realize their position in the income hierarchy is a favored one and they recognize the impact of the gap on those at the bottom.

Posted by: Linda Beale | Jul 5, 2016 12:36:42 PM

I'd agree with MB if Sen were talking about deprivation of true necessities. But the focus on relative rather than absolute suggests that he is not. Once necessities are covered, then "deprivation" strikes me as a fancy word for "less than the other guy."

Posted by: Mike Petrik | Jul 5, 2016 1:52:31 PM

These comments are hilarious in their blindness and lack of self awareness. About what you would expect from entitled Gov't employees. But "income inequality" is just another empty political issue so the 1% can continue to steal from the middle class and the poor, as they have done for the last 40 years.

Posted by: John | Jul 5, 2016 7:32:46 PM

I have no problem with his salary. I just have a problem with his outrageous pension.

Posted by: Sid | Jul 5, 2016 9:04:35 PM

@Linda Beale I think there is a fair question about the motivation of people in academia who are outraged at economic inequality but not at their own advantaged position Are they really concerned about unfairness, or are they simple trying to eliminate competition?

Posted by: mike livingston | Jul 6, 2016 4:10:52 AM

Optics...people...its about optics....

Posted by: forks make us fat | Jul 6, 2016 4:50:04 AM

"The question is whether it is fair, good for the economy, good for ALL citizens to have an economy that overrewards those at the top while underrewarding those at the bottom."

Ms. Beale, you lost me long before you used the word, "fair," but that was the tipping point. Just in case no one ever mentioned this to you, life is not fair. Life will never be fair.

Even Will Durant, who was a Socialist, wrote (and I'm paraphrasing here from memory): The history of the human race is the quick fleecing the dull. We have always had the 1%, and we always will. Moreover, they raise the standard of living for the rest of us.

BTW, be careful of what you wish for. I suspect you will not like the result if the elitist Eloi get to decide what is fair.

Posted by: Dale Spradling | Jul 6, 2016 8:21:39 AM

The problem is not that he studies poverty. The problem is that no university professor should be making a salary of $350,000 or anything close to it. Especially a public U professor.

Posted by: JM | Jul 6, 2016 8:26:57 AM