Friday, June 19, 2009

Pay Cuts and the Future of the University of California

The UC faculty has been warned that a 8% pay cut is coming in August 2009 . While you shouldn't feel too sorry for us, 8% is a big number and it will have long term consequences.

When the private universities are feeling richer 2 years from now, we will see a huge flow of talented academics moving away from the California sunshine towards safer harbors.

Dora and I are worried about gross flows. A faculty can grow if exits decline or if new faculty sign on. At UCLA, we will see more faculty leaving to go to private universities and few private university faculty being willing in the future to take the gamble of moving to UCLA. The President of the UC is creating a dangerous precedent and recruiting will suffer for a decade.

Now, he would say that he has no choice. That's not obvious to me. There is extensive building construction going on across the 10 campuses. They contine to build the UC Merced campus. All of this could come to a halt. Tuition at the UC is still quite low relative to the prviates. It should increase 25%. We are selling a quality product.

I'm eager to see the UCLA Chancellor and the senior Deans use this crisis to run UCLA like a cost minimizing business.

I've been telling Dora that we should think about retiring but she has told me that we would only collect 6% of our salary in annual pension under the defined benefit flow formula.

Faculty here at UCLA are whispering to each other that the elite stature of UC Berkeley and UCLA as worthy competitors of the privates is at stake here. Our nightmare scenario is that in 25 years, we may be just like any other state university with good sports teams and little else in terms of academic excellence. I don't want to see this happen and I'm hoping that we have a master plan to recover from this major misstep.

UPDATE:


The Chronicle of Higher Education has posted some
outstanding letters on the situation. #44 makes a lot of sense. There are some smart people who are really worked up about this issue.

Ignoring my own personal loss of income here, the core issue is that human capital is California's best hope of staying great. Gut the best research universities here and this state better count on importing ivy league graduates.

Skilled, disciplined people are costly to produce and they tend to increase income inequality at the same time that they generate new ideas and innovations. Whether the median voter is willing to vote tax dollars to help this "unfair" small but crucial group, remains an open question but I'm growing more pessimistic.

3 comments :

Anon said...

As ex-UC faculty I agree with this and think you should go further. The obvious way around the budget problems is to open up a large number of out-of-state slots. There would be no problem filling them at the premier UCs with top-notch students. This would not only benefit UCs financially but would also be good for the educational experience. UCLA is way too California heavy for an elite school. It would be a much better student experience with 30-40% out of state students. The President of UC is being a wimp by not demanding this, or offering his resignation.

Paul Thompson said...

The people proposing this didn’t think it through: the 8% pay cut will also be applied to UC employees (in the medical schools) who are not paid from state funds, which in fact makes the budget crisis even worse as it prevents UC from receiving around $40M of salary overhead on external grants:

http://www.loni.ucla.edu/~thompson/BUDGET/UC-PayCutLetterJune20.pdf

Losing indirect costs of 50-60% on the 8% of the, say, $1B in NIH, NSF, engineering, DOD, foundation, and other sources of funds that are brought into the UC system to be used in large part for salaries (let's guess that means around $40M), is throwing the baby out with the bath water.

Regis said...

http://greeneconomics.blogspot.com/2009/06/pay-cuts-and-future-of-university-of.html