Daughter Number Three has a thoughtful post on income disparity: How Much Is Too Much? Her recommendation: 30:1. In other words, the highest-paid employee in a company should earn no more than thirty times what the lowest-paid employee earns. Peter Drucker’s recommended ratio was lower still: 20:1.
I thought it would be instructive to see how these ratios might work in a college setting. The highest-paid employee at some schools is of course not the president but the football coach. In December 2013, Forbes named the University of Alabama’s Nick Saban as the highest-paid college coach in the country, earning $5.4 million this season. A contract extension is about to bring him more than $7 million per season. Let’s call it an even $7 million.
With a 30:1 ratio, the lowest-paid employee at the University of Alabama would earn a yearly income of $233,333. With a 20:1 ratio, $350,000. Given a forty-hour week, a 20:1 ratio translates to an hourly wage of $168. Plausible? No. But neither, to my mind, is the coach’s salary.
The Adjunct Project reports adjuncts at Alabama earning $2,500 to $5,000 per course. If the lowest-paid full-time adjunct at Alabama earns $20,000 a year, the high-to-low ratio is 350:1. (And service workers likely earn less.) Something is rotten — and not just in Tuscaloosa.
[I became interested in Peter Drucker’s work after reading his Managing Oneself. There’s an excerpt in this post. The Chronicle of Higher Education reports that in 2011, Robert J. Zimmer of the University of Chicago was the highest-paid college president. Total compensation: $3,358,723.]
Friday, January 24, 2014
Income disparity in higher ed
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comments: 4
And in this time of a snowy Super Bowl, one notes the $29.5 million dollar remuneration for the NFL top dog suggests that, at your 30:1 proposal, the custodian at the NFL offices should be receiving close to a million dollars a year. Carrying this further into media, the lower ranked employees at CBS and CNN and ABC should be getting a lot more, courtesy of the top talents' hoards of money. How about Oprah's lowest paid employee versus her billion dollars. All in all, the phenomenon of income inequality comes from all sides of the political spectrum, as from academia, the media and more. This is a delightful Pandora's box the champagne liberals -- a sometimes specious pejorative but not in the moment -- level at others. Mirrors often reflect some interesting blemishes for us all, liberal and conservative alike. I am enjoying immensely the infinite jest....
A ratio of 30:1 (not mine) or 20:1 (not mine) involves setting the highest salary in relation to the lowest, not the other way around. Look at what I wrote: “With a 30:1 ratio, the lowest-paid employee at the University of Alabama would earn a yearly income of $233,333. With a 20:1 ratio, $350,000. Given a forty-hour week, a 20:1 ratio translates to an hourly wage of $168. Plausible? No. But neither, to my mind, is the coach’s salary.”
I like champagne but haven’t had a glass since 2012. I much prefer red wine and sour mash. I can’t vouch for Daughter Number Three or Peter Drucker. Cheers.
Thank you for the reply. Have you a ratio to recommend?
As to coaches' salaries and such, I was asked to "give back" to my college via a several donation solicitations, when my earnings pales in comparison to the provost and coaches. I replied that my "share" could be obtained from them, and amusingly have had no further communication since then.
I wouldn’t gainsay Peter Drucker when it comes to these things. :)
With a forty-hour week at $20 an hour (that’s roughly the living wage for a small family in a metropolitan area), a 20:1 ratio yields a top salary of $832,000.
Your response to solicitations seems to me sensible. As many observers have pointed out, no other nation’s colleges and universities have athletic programs like those of U.S. schools.
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