Jack Lew, John Galt, and American universities
Instead of complaining narrowly about newly confirmed Treasury Secretary Jack Lew’s bloated compensation at NYU, we should demand that all universities release all employee salaries. As tuitions skyrocket, students and parents have the right to know where their dollars are going.
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I’ve got one kid in college and another on the way there, so the question is very much on my mind. I also teach at a hugely expensive university, which paid one of its executive vice-presidents more than $800,000 a year and loaned him at least $1.4 million to buy a home. He also received a $685,000 severance payment, and his loan was ultimately forgiven.
I speak of Jack Lew, President Obama’s nominee to lead the Treasury Department. I didn’t meet Lew when he worked at New York University, from 2002 to 2006. But I haven’t met most of the administrators atop our massive institution, which continues to hire more and more of them.
And that’s the real story in the controversy over Mr. Lew, who was confirmed by the Senate as President Obama's new Treasury secretary late yesterday. Most media reports have focused on Lew’s efforts to steer NYU student borrowers towards “preferred lenders” like Citigroup, which made Lew a top executive after he left NYU. In fairness to Lew, though, we really don’t know if there was any quid pro quo there.
Here’s what we do know: between 1975 and 2005, the number of “executive, administrative, and managerial employees” at American universities grew by 85 percent. Meanwhile, so-called “professional staff” – accountants, counselors, admission officers and so on – rose by a whopping 240 percent.
But the number of professors grew by just 51 percent – almost exactly the same rate as student enrollment. In 1975, colleges and universities employed one professor for every 16 students; 40 years later, there was one professor for every 15.
But the administrator-to-student ratios changed dramatically. In 1975, universities hired one administrator for every 84 students and one staffer for every 50 students. By 2005, there was an administrator for every 68 students and a staffer for every 21.
Here’s another way to look at it: Back in 1975, there were about 447,000 professors and 269,000 staffers and administrators. Four decades later, the staffers and administrators outnumbered the professors, 756,000 to 676,000.
And at the top of these pyramids, people pull down huge salaries and perks. By 2007, 12 university presidents earned more than a $1 million salary per year and 81 received more than $500,000. Less well-known are the packages showered on the presidents’ every-growing coterie of so-called “cabinet” hires.
By 2003, for example, the University of Maryland at College Park employed six vice presidents, six associate vice-presidents, five assistant vice-presidents, six assistants to the president, and six assistants to the vice president. And the vice presidents’ salaries climbed 50 percent between 1998 and 2003, when student tuition rose sharply as well.