03 November 2015

College Costs: It Ain't Climbing Walls

In response to a particularly egregious post by an overpaid (aren’t they all?) sales weasel about marketing to the “4 Ps”*, Paul Campos of LGM notes the remuneration of the 15 highest paid staff at the school, and the size of the school (less than 200 faculty), and draws obvious conclusions.

First, let me say, read the comments on his post.  They are a wealth of information as well.

Second, as is my wont, let me run the numbers:

The top 15 luminaries at this institution earn a total of $3,928,000.00, with the 15th most highly paid getting $145,000.00 a year.

There are 200 teaching staff, none of whom make $145,000.00 a year, or their names would be on the tax records used at LGM.

Assuming that they each average $100,000.00 a year, this means $20,000,000.00 spent on teaching staff, which means that 14% of the teaching budget is spent on such notables as the , "Vice President of Campus Environment ," "Associate Assistant Vice President/Dean", "Vice President of Institutional Advancement, " and "Associate Vice President and Chief of Staff".

According to the comments, almost all the teacher are adjuncts, so that number is probably less than $60K, it's primarily a liberal arts institution, which would mean that of these people have get the ⅓ of what is spent on instructors.

When you further consider that it is likely that each of these bits of administrative deadwood have 5 flunkies working directly for them on average (and my guess would be that there are at least 10 working for both the marketing and alumni development chiefs) , and that each of them earn $30K a year, and this goes up to more than 50% of the teacher budget.

Note from the comments also, "It is telling that she refers to customers rather than students."

A major problem with higher education, and higher education costs, is the explosion of overpaid and under-worked administrators.

Another one is that, particularly at the top schools, there is monopolistic collusion as to prices and aid awards, allowing prices to skyrocket.

Instead, we have people talking about climbing walls for students, and those palatial some new dorms.

College is a microcosm of society, where an unproductive and parasitic managerial class suck the marrow out of business, the economy, society, and the "customer".

*Product – What product or products should we offer? Price – How should our products be priced? Place – Where should we offer our products for sale? Promotion – What’s the compelling story we tell about our product and where do we tell the story to get people to buy our product?
In fact, the high end student amenities are predicted by monopoly theory. Once monopolists stop competing on price, they jack up prices and compete on bling.


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