Inflation Has Taken a Bite Out of Faculty Compensation

Welcome to the party, professor.

It is no secret that the economy has been rocked by the pandemic. Economic recovery over the last three years has been rocky at best. Inflation has hit four-decade highs, while purchasing power has hit record lows. This economic uncertainty has affected all industries, and the academic realm is no exception.

Earlier this summer, the American Association of University Professors (AAUP) released its “Annual Report on the Economic Status of the Profession, 2022-23.” The report found that, while the 2022-23 academic year saw an increase in professorial salaries of 4.1 percent, adjusting for inflation the average salary actually dropped by 2.4 percent.

This 4.1 percent nominal increase represents the highest single-year rise in professorial salaries since 1991. Yet the inflation afflicting the Biden economy has not only erased that gain but has actually forced professorial purchasing power in the opposite direction. This is the third year in a row that the average professor’s spending power has dropped.

The report fails to draw a direct line between compensation in the administrative sector and (under-) compensation in the faculty ranks.The report makes use of data from almost 900 U.S. colleges and universities, as well as salary numbers from about 370,000 full-time faculty and 90,000 part-time faculty. Average salaries for these employees increased the most at public universities (4.5 percent nominal growth), followed by private institutions (3.8 percent) and religious institutions (2.7 percent). Yet despite these year-over-year gains, inflation has robbed faculty of any actual wage growth.

The AAUP acknowledges that inflation is not the only cause of a decrease in real wages for faculty. The shrinking college-age population is to blame, as well. As the report tersely acknowledges, “Student enrollment and the economic status of the faculty are inextricably linked, in large part because tuition is usually the main source of revenue for colleges and universities.”

While this is certainly true, the AAUP fails to mention that administrative bloat is also a weight on faculty compensation. The report does confirm that “salary growth for presidents and other key administrators has been substantially greater than salary growth for full-time faculty members since the start of the pandemic,” but it fails to draw a direct line between compensation in the administrative sector and (under-) compensation in the faculty ranks. As everyone knows, there is only so much money to go around in the nonprofit sector, and salaries are, for the most part, a zero-sum game.

The drop in real wages for college and university faculty across the nation is a complicated issue, with a variety of causes. Higher education will eventually fail to attract the highest quality candidates if schools are unable to properly compensate them. But it is important to note that record inflation has affected not only higher-education institutions but other university stakeholders, as well. Students graduating from these very institutions are entering a job market that continues to be weighed down by inflation. That issue must be addressed if the economy is to flourish.

Grace Hall is a communications assistant at the James G. Martin Center for Academic Renewal. She works and lives in Georgia.