Tenure and the Cost of Professors: The Production Perspective

Aug 04, 2010 |  Bruce Heiden

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Tenure and the Cost of Professors: The Production Perspective

Aug 04, 2010 | 

Bruce Heiden

A recent New York Times symposium (7/29/10) asked five academics “What will happen to American higher education if professors are not guaranteed job security?” Only Cary Nelson, the president of the AAUP, said that eliminating tenure would be bad, repeating the shopworn explanation that without tenure faculty members will be unable to “speak out against popular orthodoxy without fear of reprisal.” Cathy Trower, a research associate at the Harvard School of Education, after declaring that the tenure system “does not fit contemporary economic realities,” sketched a proposal for an alternative system which curiously still involved tenure, although she never explained why it was worth keeping at all; and more importantly, she never addressed the “what would happen if” question. Adrianna Kezar, an education professor at the University of Southern California, punted out of bounds and discussed a different aspect of faculty work altogether. And the two others, Professor of Religion Mark Taylor and economist Richard Vedder, both agreed that tenure is bad for American higher education and its elimination would facilitate much improvement. They also agreed on the reason tenure is bad: universities need flexibility to allocate resources, while tenure imposes “enormous fixed costs” (Vedder).

I was pretty astonished that amidst the many gestures toward the authority of economics not a single word was said about the supply of professors and how it might be affected by a substantial change in their compensation. The notion that tenure is a costly luxury that professors have imposed on universities, and that administrators need flexibility to “quickly reallocate resources,” completely overlooks the kind of resource university faculty members are and the cost of producing them. The AAUP’s academic freedom argument also distracts attention from this important aspect of faculty work and compensation. Professors do not grow on trees, and university administrators—let’s call them bureaucrats—cannot quickly respond to ephemeral needs by shaking one tree instead of another, because the trees are not there to shake. 

Professors are not an abundant natural resource, nor are they a mass produced commodity whose supply can be easily adjusted to meet the market demand at a given time. They are produced by investors who strive to make rational economic decisions and manage costs just as university bureaucrats do. If the producers of university faculty members don’t foresee an adequate return, they’ll invest their resources in producing something else. University bureaucrats won’t be able to “quickly reallocate resources” when producers don’t have the capacity to fill their orders for the equipment. 

Professors are produced one at a time through an extremely slow, expensive process. First of all you need an undergraduate student who is intellectually very capable. This person must not only eventually master a research discipline, but master it well enough to think beyond its boundaries and make original contributions at the international cutting edge. This individual, whose professional career choices are probably as wide as anyone’s, must voluntarily choose to pursue an academic career. That is where faculty-producers come from: a person decides to invest in producing a professor, and the professor he or she produces is him or herself. The entrepreneurs who decide to make this capital investment start by plowing in several years of undergraduate work in their major field, and then about six years of study in graduate school. During this ten-year period they work very hard at learning their discipline, and for this work their material compensation is essentially zero. In graduate school they will probably do some teaching, for which they receive very low wages but some benefits, in total a very poor monetary reward even if the library and classroom work is discounted. (Congressional Budget Office, take note!) But since this work is not subsistence labor but a career investment, the cost to the producer also includes the perceived risk that the eventual return may be less than anticipated. That risk is high and growing, and it is a factor in the cost of production as it would be in any economic venture. Moreover the producer must forgo the opportunity to produce some other kind of professional product, say a doctor, a lawyer, an engineer, or a government bureaucrat, which may require a shorter (or longer) up-front investment, face lower career risks, enjoy more flexibility in terms of location, and receive higher material compensation  than even a very successful university faculty member receives. This is an opportunity cost. It too is part of the cost of producing a professor.

It costs producers a lot to produce a university faculty member. This affects the item’s cost to consumers, just as the cost of any commodity is affected by the cost of producing it. If the market does not offer producers sufficient reward to justify their investment, they’ll produce something else. Pundits who are aghast at the supposedly enormous cost of university faculty must be very poor economists (including, I’m sorry to say, Professor Vedder). The cost of professors to the producers is very high, and the price they bring on the market must necessarily be high or producers will be discouraged from producing them. 

When you compute the actual cost of producing each professor, their cost to universities does not seem high at all. How do universities afford them? The answer is that professor-producers accept certain non-monetary rewards in lieu of cash. One of these rewards is the security of tenure. Another is the honor of recognition from peers for accomplishments as a researcher and from appreciative students for teaching them difficult and important disciplines at a uniquely high professional level. These potential rewards, and the prospect of doing fulfilling work, attract many investors who never actually receive the payout of a good faculty position—for university budgets the grad school teaching work of these unsuccessful investors isn’t so much a bargain as a free gift. But one cannot expect high intellectual capacity to combine with such foolish generosity forever. As universities degrade the condition of faculty work—its independence, security, and respect—they are degrading the career and diminishing its attractiveness to producers. 

It should be obvious that one plausible answer to the “What will happen?” question is this: the supply of high quality faculty will shrink. It will not shrink suddenly overnight because existing history professors or mathematicians decide to “retool” themselves and apply for freshly opening positions with the IRS. But it will shrink over the long term as fewer producers decide to undertake the significant capital costs. In many fields the supply of high quality faculty has already shrunk. The only reason this isn’t remarked upon more widely is that quality in higher education is defined downwards, just as it is in other bureaucratized enterprises.

The cost of professors only seems high now because years ago capable young people who could have done many other things were attracted to academic careers. University bureaucrats and half-cocked economists don’t have to compute the cost of luring a professional from another field to spend ten years or more becoming a researcher and teacher in an academic discipline. If short-sighted efficiencies discourage production and interrupt the supply, will these experts explain the cost of hiring a faculty member who doesn’t exist? 

The NY Times faculty pundits discuss “new teaching and research needs” as if they arose overnight in “today’s fast changing world” (sigh). Actually these suddenly-arising needs are often the outcome of research projects and technical innovations that have been developing for years or decades outside of public view. The whole nature of higher education is that it does not respond to momentary conditions but makes plans far into the future. That is implied by the courses of study, which educate students years in advance of any work they may perform with their learning; it is implied in the formation and support of research projects; and it is implied in the construction of laboratories and libraries. Tenuring faculty is only one of the ways that universities plan ahead. It is also only one of the areas in which plans are sometimes made unwisely. Higher education will not be improved by expanding the power of its central bureaucracies to reallocate resources and utilize professors like cheap labor commodities.   

Bruce Heiden is Professor of Greek and Latin at Ohio State University and president of the Ohio Classical Conference.

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