Where the Real Money Goes

May 22 2015

The publication of colleges' and universities' IRS Form 990 has engendered excitement about the salaries paid to top administrators. Frank Bruni had a column in the Times:

Bruni Academic Salaries Comp.jpg

And the Valley News' review of the College's Form 990 led off as follows:

The 2013 compensation packages of nine Dartmouth College administrators and professors each exceeded $600,000, according to the college's most recent tax return.

Pamela Peedin, the Boston-based chief investment officer who oversees the college's $4.47 billion endowment, was once again the institution's highest paid employee. Her $473,000 base salary, $600,000 in "incentive compensation" and $37,500 in benefits added up to a total of $1.1 million for the year.

Ho hum. There is prima facie nothing at all wrong with earning a million dollars for running an institution with close to 10,000 employees (when you put the College and DHMC together). That puts Phil's family in the Top 1%, but not all that far into it. After all, there are plenty of 30-year-old traders and investment bankers making well more than a bar, once bonuses are totaled up.

What makes the envious emphasis on these high salaries wrong is that this particular focus distracts from the real problem -- where the big spending is really going.

According to the College's 2010 Form 990, Dartmouth's top sixteen earners took in $8,284,340 in salary and benefits, out of a total compensation budget for all employees of $431,170,000. That's a piddling 1.92% of our total spending on personnel.

In the 2014 Form 990, the top sixteen earners saw their remuneration rise by 14.1% ($1,166,407) over five years to $9,450,747. That amount was still only 1.92% of the overall compensation paid to all of the College's employees, which was $491,832,000 -- a jump of exactly 14.1%, too, but here the total increase amounted to $60,662,000.

If we are looking to cut costs at the College, let's focus on limiting that overall jump of $60,662,000 from 2010-2014, rather than professing shock that the College's top people took in an extra $1,166,407.

As I never tire of saying -- because one day somewhere somehow somebody will hear me -- the real waste at the College is in the staff.

Addendum: The CPI increased by 8.57% between 2010 and 2014. If Dartmouth's compensation budget had increased with inflation, the total cost of wages and benefits would have been lower by $23,710,000. To put that figure in context, in 2014 the College took in $126,611,000 in tuition from undergrads. Wouldn't it have been nice to drop tuition by about a fifth?

Addendum: And what about Brown, you ask? In 2010 Brown's salaries and benefits for its professors (one third more than the College) and staff came to $398,894,000 -- $32,221,000 less than Dartmouth. In 2014 Brown paid out $408,375,000 in compensation -- $83,000,000 less than the College. That's a total increase from 2010-2014 of only 2.38%, a figure well below the 8.57% rate of inflation. Way to go, Brown.

Addendum: I focused my Form 990 post on the outrageous post-partum payouts to Jim Wright and Adam Keller because that money was all waste, not just partial waste as in the above bloated total salary figures.


Mastanduno Informed Bin Laden

May 21 2015

The federal government has released a partial list of the books found in Osama bin Laden's Abbottabad, Pakistan compound. Among them, a 2003 book that Dean of the Faculty Mike Mastanduno co-edited: International Relations Theory and the Asia-Pacific.

Mastanduno Book Comp.jpg

Credit where credit is due.

Addendum: Bin Laden's library also included a copy of Economics Professor Doug Irwin's NBER research paper Did France Cause the Great Depression?

Addendum: Read the complete list of declassified books and other items from bin Laden's refuge here.


Asian Americans Protest Harvard Bias

May 21 2015

A coalition of Asian American organizations has filed a complaint against Harvard for discriminating against Asian Americans in its admissions process. The administration there could be in for a rough time. As Ron Unz pointed out several years ago in an article entitled: The Myth of American Meritocracy, How corrupt are Ivy League admissions?, statistics would indicate that all the Ivies established a quota for Asians around 2001-2003:

Asian Enrollment.jpg

Charles Murray noted the following in 2012 when Unz's article was published:

Unz's findings have received astonishingly little coverage. "Astonishingly," because Unz has documented what looks very much like a tacitly common policy on the part of the Ivies to cap Asian admissions at about 16% of undergraduates, give or take a few percentage points, no matter what the quality of Asian applicants might be. That's a strong statement, but consider the data that Unz has assembled. [Emphasis added]

Of more than passing interest is the fact that over the last four years Asian American enrollments at the College have consistently been 16%. Surely just a coincidence:

Asian Enrollment Comp.jpg

A piece in the WSJ on May 15 cited the following figures from the complaint:

The complaint, filed by a coalition of 64 organizations, says the university has set quotas to keep the numbers of Asian-American students significantly lower than the quality of their applications merits. It cites third-party academic research on the SAT exam showing that Asian-Americans have to score on average about 140 points higher than white students, 270 points higher than Hispanic students and 450 points higher than African-American students to equal their chances of gaining admission to Harvard.

The Washington Post reports:

This is the second complaint against Harvard admissions practices on behalf of Asian Americans in a month. A legal defense group called Project on Fair Representation filed a lawsuit against Harvard about a month ago on behalf of a group called Students for Fair Admissions. It accuses Harvard of "employing racially and ethnically discriminatory policies" in its admissions practices.

With the Supreme Court once again reviewing the constitutionality of diversity/affirmative action policies, and a national understanding on the rise that academic mismatch costs disadvantaged minorities more than it helps them, one has to wonder how long racial preference policies can endure in the academy.

Addendum: An alumnus writes in:

Although we have a new focus on race on admissions practices in the Ivy's, this 2004 Princeton study provides a more holistic view: Admission Preferences for Minority
Students, Athletes, and Legacies at Elite Universities

While it's a bit dated, it indicates that athletics preferences became the most influential advantage an applicant can have provided a student met the minimum academic requirements. According to this study, a sports recruit gets the equivalent of 200 SAT points which is more than the 140 point gap between Asian and White students cited in the lawsuit. Between 1980 and 1997, athletic preferences became more advantageous than being Black, Hispanic, or a legacy (see Figure 1, page 1443).

What this means is that the academically, rather than athletically inclined applicant has to really shine. Arguably, race-based quotas at least have a broader redeeming goal to redress societal biases. I'm not sure how a better football team does the same.