OUR OPINION: Peer-group comparisons can mislead on wagesFor management, the central question is not how much others are paying. That’s always and everywhere a recipe for “more,” given the fact that there always are Joneses to keep up with. Instead, the central question is this: What do I have to pay to both keep my good workers from jumping ship and to attract new workers when I need them?
By: Tom Dennis for the Herald, Grand Forks Herald
“People would probably say, ‘Wow, you (NDSU professors) are paid a lot,’” said Dean Bresciani, North Dakota State University president, to a Forum Communications reporter.
“Our faculty would probably say, ‘Wow, I could get another job and get paid more.’”
Well, are they doing that? Looking for and finding better-paying jobs, that is.
Because if they are, then Bresciani has an ironclad case that his faculty need a raise. And that’s the case he should be striving to make.
“The average full professor at NDSU earns about $100,000 a year — a salary that has jumped $42,500 in the past dozen years and is twice as much as the median North Dakotan household income,” writes Marino Eccher of Forum Communications.
So, is that enough, or do professors need more?
Bresciani says the answer is “more.”
“Six figures sounds like a lot, Bresciani said, but it only puts NDSU in the 18th percentile for full professor pay at doctoral institutions,” according to the story.
“He said the percentile overstates the gap, but that the school is still 7 to 8 percent below average. … ‘If you want a top-flight faculty member, that can cost dearly,’ he said.”
But by offering such comparisons, Bresciani is not making a persuasive case. And given the harsh publicity NDSU and the entire North Dakota University System have endured, it’s probably not going to result in more money coming his way.
Nor should it. And the same goes for comparisons made by UND.
Here’s why: Peer comparisons are the classic tool used by labor to pump up wages. And not just “labor” in the traditional union sense. Corporate CEOs use peer comparisons, too, when they’re asking their own boards for a raise.
But just let the rank-and-file approach the CEO to ask for more money. The workers might point to the wages enjoyed by their counterparts at similar firms.
And that’s when the CEO will take off the “Labor” hat and put on the one marked “Management,” exactly as the board members should have done when the CEO asked for more money.
Because for management, the central question is not how much others are paying. That’s always and everywhere a recipe for “more,” given the fact that there always are Joneses to keep up with.
Instead, the central question is this: What do I have to pay to both keep my good workers from jumping ship and attract new workers when I need them?
If turnover is low, unemployment is high and job applications are up, then those are signals that wages basically are OK.
From management’s perspective, significant wage hikes should result from wage pressure, which shows up as high turnover and too few good applicants for open spots.
If that’s what’s happening at NDSU — or UND, for that matter — then the presidents should by all means document it. The Board of Higher Education almost certainly will be sympathetic.
Then again, maybe that’s not happening. Maybe professors are staying put until retirement, and tenure-track positions are drawing dozens or even hundreds of strong applicants.
If that’s the case, then the presidents can try to use the tactic of peer comparisons. But they shouldn’t be surprised when “management” — the state board, the Legislature and the North Dakota taxpayers they represent — looks at that argument with skeptical eyes.
— Tom Dennis for the Herald