This is part two of the series Hard Knocks Uni: The Crisis in Higher Ed. Read part one here.
Macquarie University was looking for savings. Facing a loss of revenue from international students, it cut millions from its staffing budget, and more than 150 left in a mix of voluntary and forced redundancies since the pandemic began — more if you factor in casual and fixed-term contracts that weren’t renewed.
Last year its vice-chancellor, S Bruce Dowton, who is usually photographed in a bowtie, earned more than $1 million.
Let’s not villainise Dowton too much. Bloated executive salaries have become the norm in Australia. Even last year, when universities cried foul about a lack of government support during the pandemic and some VCs took a solidarity pay cut, salaries remained absurdly high.
And that points to a tension at the heart of the higher education sector.
Pretty much everyone in higher education is deeply pessimistic. But the view from the chancellery isn’t the same as the view from the coalface. University leaders, many of whom have earned millions a year, rightly condemned years of government underfunding and neglect. Yet their salaries have grown and management has ballooned while their institutions have become structurally reliant on wage theft and an increasingly casualised, insecure workforce.
The corporate uni
The current state of higher education is a tale as old as neoliberalism itself. It goes a little like this: over the past 30 years, the Commonwealth more than halved its funding. As funding dried up, universities were forced to turn to other sources for income, and became heavily reliant on international students.
“They’ve put most of their eggs in the international student basket and they’ve been very successful,” University of Wollongong council member Adam Lucas said. “But they’ve been cutting programs, cutting staff, increasing ratios and casualising the workforce.”
At the same time, universities were being asked to do a lot more, no longer just educational institutions, but large, semi-corporate, state-owned entities. Their corporate drift is reflected in the astonishing growth of what anthropologist and activist David Graever might call “bullshit jobs” — swelling ranks of management, the glut of roles like “deputy vice-chancellor student experience”.
Between 1997 and 2017, middle management roles grew 122%, and senior management 110%. Regular professional staff grew at just 37%. Support staff declined.
The corporate drift is also reflected in changes to boards and councils, increasingly dominated by people from the business world with no clear ties to academia.
“It’s been a deliberate strategy to disempower academics and control us and how we operate and function,” Lucas said.
La Trobe University political historian Judith Brett agreed: “When they restructured university councils to make them more like boards of directors, that was a massive mistake. That was when they started seeing universities as a financial entity.”
Councils are also becoming less democratic. For example, in 2016 the University of Sydney cut the size of its Senate and the number of positions elected by staff and alumni.
But the most obvious and unpopular sign of what universities have become is in vice-chancellor salaries. Despite some — including former University of Sydney boss Michael Spence — taking a pandemic cut in 2020, several still earned salaries in the millions. Duncan Maskell at the University of Melbourne earned more than $1.5 million.
“There’s no doubt salaries in executive wings of universities are high — there’s no point pretending that’s not the case,” Universities Australia chief executive Catriona Jackson said. “But if you actually look at the financial situation more broadly, before the pandemic universities were operating at a margin of 6.2%. That’s now 2%.”
Professor Andrew Norton, an expert in higher education policy at the Australian National University, said high VC and executive salaries have been a huge own goal for universities that for years have been putting the case for more public funding.
“Not only has it angered students but it’s also riled the very politicians universities rely on for support,” he said. “You don’t need to pay someone a million dollars to run a university.”
Building bonanza
Executive salaries are not the only things to grow. University property portfolios have soared off the back of the river of gold from foreign fee-paying students. The net asset holdings of Australia’s public universities is about $61 billion.
“Part of the furore over the current job cuts is that public universities have millions of dollars tied up in investment, including property, stocks and other kinds of assets,” Lucas said. “They’re hiving this money off from normal operating expenditure. They’re not using it to protect our jobs or conditions or support research. They’re just keeping it in separate accounts.”
Jackson says not all assets can be simply sold: “It’s easy to look at buildings and say that is money. But buildings have been gifted; they have national trusts. They often don’t make money. They cost money.”
There are signs this is changing. The University of Sydney is selling at least 13 properties. The UTS has sold three student accommodation properties for $95 million.
On the coalface
While all this has been going on, universities have adapted to stalled funding from the Commonwealth by deepening their reliance on casual labour.
It isn’t clear just how casualised the academic workforce is, but at some universities it’s about 70%. At the universities of Sydney and Melbourne, about 50% of the work is done by casuals.
Yaegan Doran from the University of Sydney’s casuals network said: “From a macro perspective, as university funding was cut by governments, managers looked for cost-cutting, and began casualising their workforces.
“At a more cultural perspective, the standard thing was 70s; it was not as unusual to move from a casual to permanent job. It became your penance for the next step. Now that pathway is a lot narrower.”
For years, the casualisation of academic work was a kind of open secret in the higher education world. Because the National Tertiary Education Union was traditionally dominated by permanent staff, the plight of casuals wasn’t often centred in their campaigns.
But job security has become an increasing focus of the union, mainly because COVID-19 blew it all into the open.
In part that’s because the pandemic laid bare the nexus between casual work and systemic wage theft. Suddenly universities were back paying millions to staff who had been consistently underpaid for years.
Last month, Monash paid $8.6 million to underpaid staff. That followed payouts of $12.75 million at the University of Sydney and $10 million at the University of Melbourne.
The casual problem has also got attention because it’s precarious staff who’ve been on the coalface of the COVID-driven ructions in universities. Casuals lost their jobs as universities rushed to offset projected pandemic revenue losses.
Doran found out he had lost his job “overnight” after the pandemic hit.
Those who were still working bore the brunt of the universities’ struggle to suddenly overhaul teaching models. Shifting between online and face-to-face learning blew out their workloads. The return to classes in between COVID outbreaks suddenly gave them more unexpected work.
At La Trobe University, for example, casual staff were handed university-branded cleaning packs and expected to sanitise classrooms.
Not much sympathy
The reality of higher education makes it harder for management, and the higher education sector, to win sympathy in the larger fight over long-term funding.
On one hand, vice-chancellors cry poor. On the other, many supported some of the Coalition’s more ideologically driven attempts at structural reform that would starve the sector of funding.
In 2014, ANU vice-chancellor Ian Young, who headed the Group of Eight, was a key backer of the Abbott government’s failed attempt to deregulate university fees. Most threw their support behind the Morrison government’s Job-ready Graduates package.
And while those on the coalface struggle, we still don’t really know by how much, because that has been well-hidden.
Next: the hidden crisis at universities.
“its vice-chancellor… earned more than $1 million.”
I don’t doubt that more than $1 million was paid, but where is the evidence it was earned?
Define “earned”? I assume that he has the requisite skills for the position, delivered on his performance and other targets and is paid at the current market rate for his role? Universities are a business in reality. Not defending it, just saying.
Fairly obviously, I am concentrating on the notion that something is earned when it is deserved. I find the idea that someone can genuinely deserve over 13 times the gross median salary a bit improbable.
The salaries of senior managers have been going up at a rate several times higher than general wages since the 1980s resulting in grotesque disparities. Were they not properly paid before? Has their performance actually become several times better than it was? Or is it just their collective ability to get their snouts in the trough that has improved? All the evidence points to the last factor.
There’s a lot said about this modern phenomenon in Thomas Piketty’s excellent book Capital.
It’s basically about responsibility, value and market forces. Executives are only as good as their last “win”, can be given the bullet at any time and are remunerated based on the respective market they work in.
Up to a point. It is a rigged market, working in favour of a highly protected and privileged class.
Respectfully disagree. Not everyone who is an Executive was born with a silver spoon. A lot spent years at Uni, took risks changing jobs, sacrificed and moved around to get where they are. Risk equals reward in most cases. Once you either work for yourself or start making more than 250K you have very little life other than work.
On the other hand, I recall the executives at British Gas, at the end of the 1980s, getting very cross about reports that they set their own salaries. (By today’s standards quite modest, back then outrageously high.) The chairman completely refuted those manifestly false and very distressing reports by explaining how, once a year, first the non-executive directors set the salaries for the executive directors, and then the executive directors decided the salaries of the non-executive directors.
That’s a particularly crude example, but it is still not far off how it works generally, with or without remuneration committees (which make things worse) and so on.
I am impressed by your deeply moving account of the risks and travails endured by the super-wealthy. Has it occurred to you that any number of ordinary workers, skilled or unskilled, trade or professional, do as much or more, without ever getting any more than ordinary rewards? And it is curious you choose to introduce social mobility to the discussion. The statistics show social mobility has gone down as the inequality of wealth goes up. Those on super-high incomes are jealous of their territory and guard it well. It is true that a few of the riff-raff still gain entry, but that hardly changes the big picture.
Anyway, it is far too big a subject to cover here in any adequate detail. But again – read Piketty. He provides plenty of data to back up arguments that there is no good rational market-based explanation for the explosive increases in executive pay in recent decades. As he says “The most convincing proof of the failure of corporate governance and of the absence of a rational productivity justification for extremely high executive pay is that when we collect data about individual firms it is very difficult to explain the observed variations in terms of firm performance.” That is true both for comparison between competing corporations and the variations of corporate performance over time. It just does not correlate with executive pay. It is not hard to find examples of executive pay and bonuses increasing even as their firm implodes.
I was referring to actual mobility not social mobility. As to ordinary workers, unskilled workers, trade or professionals, they are paid according to what the market values in the industry they are in. Trades and Professionals who are self employed make considerably more (as they should) given they have assumed the risk of starting their own business rather than the secure option of working for someone else (who assumes the business risk) . Risks come in many forms and just showing up, day after day and doing your job, is no longer good enough to warrant higher incomes (regardless of the role).
Depending on the role, Executives usually have to add value (revenue, cost savings etc) anywhere between 2.5 and 3.5 times their Employment Cost just to justify their base remuneration. Typically you are paid anywhere for the
Value that you add not what you know or produce.
Are some Senior Execs overpaid? Absolutely but not all of them. I have also certainly seen plenty of ordinary workers being overpaid based on what value they add (or rather what they don’t add in some cases).
My firm view is that, in the end, you are paid for the value that you add at the going rate for that market, industry and position.
Do you really believe that drivel?? So we can all make it. Really????. Lucky for people like you that most of us too lazy or stupid or both and so leave all the ‘good’ jobs to the deserving few like you.!!!!!
Get a life
Keep your abuse to yourself. I received some good advice when I was young and followed it diligently (always do more than is asked of you, study, be prepared to change jobs, companies and locations to advance, take every opportunity presented to you). In other words, don’t expect to just show up, do your job and expect to be rewarded. You control your career not others.
How strange in what way do you consider my reply as ‘abuse’? But I’ll leave you to your own little twisted view of the world. I will simply sit back and bathe in the brilliance of your sunshine and wonder why of all the millions of people so few of us plebs ‘get it’.
Just maybe because we’re black or maybe come from a home where abusive behavior was the norm or perhaps our mother had to flee an abusive husband and became homeless I could go on but hey why bore you and waste my time????
It must be nice to have so simplistic a view of the world. I bet you still think that the good guys always wear white and the bad guys black.
With that I bid you goodbye i don’t have any further time to waste on you.
My, my, what an Embittered little person you are. My childhood was no picnic that’s for sure your Holiness. My wife, children and granddaughter are Asian BTW and I suspect that I’ve been around the block more than you but you go on with that chip on your shoulder and see how far it gets you in life.
Now there you go just when I thought you were a total waster you go and say something that just invites me back again.
Embittered ??? Well possibly, most definitely angry when people hide behind the myth of merit to justify gross inequality of opportunity, wealth and power. So to break it down so that you are able to follow, all your success is merit based that is your deserve your position. None of it can be attributed to good fortune, meeting the right people at the right time and of course all of the little people who have contributed in some are to be discounted.
‘Holiness’ well not really I bear no relation to his holiness the Pope (thank you for the compliment) in fact I must confess to being a lapsed Catholic, better that than a hypocrite I suppose as so many church goers are. Though I have been accused of being condescending but only to those who consider themselves superior to others.
But I digress. Since you obviously believe all your success in merit based and of your own doing you must equally believe that all those you fail have only themselves to blame. Hence you are deserving while all the rest are undeserving and get what we deserve that is failure????. Have I got that right???? Want to know a secret?? I recently became a millionaire mostly though good fortune, See I said it, so can you. Just try.
‘chip on my shoulder’ now really I thought you could do better than, you being a person of such obvious talent. Look I will help you out old sport go back and give the good all Morrison ‘politics of envy’ a run. Obviously you are one of Morrison’s ‘aspirational’ voters, what’s in it for me?
Why I bet if inequality did actually bother you then I can see that you are someone who really believes in that economic maxim of ‘the trickle down effect’. You know the old the rising tide lifts all boats’ not just yours. In other words your success is a ‘burden’ you carry for the greater good of all.
you know if I did know the Pope given the sacrifice you are making for all I would ask if the church would consider canonizing you that is, make you a saint
That’s right, blame everyone else but yourself. I’m sure you have done everything possible to advance yourself and nobody else deserves success of any kind simply because you havent been able to achieve it is it?
I also come from what they now call a “disadvantaged” background so don’t give me any of that “everything is stacked against me” rubbish. I had 4 different stages to my career (Military, Banking, Financial Services then IT of which 3 of those I started at entry level). The victim mentality doesn’t wash with me Sport. You own your career. It’s not someone else’s job to make you successful.
As to being a fan of Morriscum, hardly. I’m a Centrist Realist with left leanings. Sorry but I’m firmly of the view that you control your own career. Judging from the way you write and your general attitude, I can also see why the real reason why your contract wasn’t renewed.
Instead of spending your time whining about the “unfairness of it all”, how about you take stock of yourself and work out what you can do to improve your Lot in life.
Sorry old sport my mistake. I didn’t realize that English was your second language. I write A and you choose to read and respond to B. We speak different languages and your tunnel vision will not permit alternative views and realities. So in reality education has failed you, no critical thinker here just a robot programmed to accept one way of thinking without questioning it. There is definitely a place for you somewhere but I would rather not go there.
Yes my contract was not renewed because I had the temerity to call out one of our biggest institutions for screwing its students.. This institution was very happy to grab as much money as possible from students in fees and in return provide a sub-standard level of education to the students.
As far as the bean counters at this institution was concerned the students were simply a means to an end, a money cow and this applies especially to international students.
The funny thing is I would take such a stand even if you were one of the students concerned.
‘I can see the real reason why your contract was not renewed’ Really!!!!!. Don’t presume to know me and make an even greater fool out of yourself.
Before i penned my letter of protest to our joke of a Head of School I knew very clearly what I was putting on the line. Continue going quietly along with the charade of the students getting a fair deal or make a stand and almost certainly reap the anger of my esteem leaders.
You as an unthinking robot would have no such problem to confront.
Still blaming others I see. “Tunnel vision” obviously looking in the mirror when you wrote that. Anytime someone has a different view to you they become “the enemy” which is typical of today’s society. Good luck to you with the rest of your life, with your self-righteous attitude and the usual “it’s not my fault attitude” you will need all the luck you can get.
Your bootstraps must be worn out from all the self pulling – or you are pulling something else.
Really ‘can be given the bullet at any time’ Sounds like a casual academic to me?? But then you have probably never heard of the ‘golden handshake’ have you. That definitely does not sound like a casual academic to me
Yes our poor VC’s do it so tough!!!!. They come on radio and bemoan their fate and speak of all the ‘good things; they do for their money cows oh sorry I mean their valued international students. You know the ones who pass courses no mater what their standard of work following orders from above.
Hey guess what lexusaussie some staff actually find their sense of morality and maintaining standards so strong that they opt to resign rather than pass sub-standard students all for the sake of the dollar our new ‘god’.
Oh by the way lex did you hear the one about the nursing graduate (international student) straight out of uni who in their first posting gave a patient some dish washing liquid in place of the correct medicine because they could not read the labels correctly???
Now that is some graduate not being able to speak good English but still ‘easily’ makes it through the course. Why it is almost every student’s dream.
Universities are areas of academic excellence and the pursuit of “better,” always have been, and, are not merely maximisation corporations. They should be aware of being business-like and usually are. There is a difference between a beer gut and a brain.
As much as I agree that 7-figure salaries for University VCs is excessive, this is a symptom of the problem, not the cause. The shift in focus from research and learning excellence, to profit-taking, was always going to result in exorbitant executive salaries.
But even if VCs were to volunteer their services, the Federal government would still be hostile. They’re just naturally suspicious of intellect – and paying VCs more than they’re worth merely gives the government a handy stick to beat them with.
There’s not much hostility. Before COVID, the government and the VCs were agreed, that the main game was clipping the tickets of cash-cow students seeking permanent residence. Students made up nearly 1/2 of annual net migration.
After COVID, both government and VCs are agreed, more please. Labor would be no different.
The NTEU has been weak for years. Senior academics were furious about the rise in insecure casuals, FIY. The Morrison government chose not to provide job keeper to Uni casuals. The managements, V-Cs down, said nothing of note. In fact, wage theft continues. By the way, V-Cs and the endless layers of middle management are NOT the University. That comprises students, academic staff, librarians and administrative staff. UNSW management got rid of most librarians years ago, yet insists it’s “the University”. UNSW was first to be a financial centre, and sent its learned recruits to ruin other universities. Now Morrison is happy for a huge and important sector to die. I imagine V-Cs will go quietly if their retirement pay is right! The remaining academics have more work imposed on them, to students’ detriment.
Outside of formal university campuses e.g. city based private provider partnering with a regional campus, any whiff of union activity or organising would mean no classes offered next session…… one still struggles with Oz management attitudes based round 19thC authoritarianism; reflecting the politics of today of disempowering ‘elites’, educated and science.
As bad, has been the short term reactionary style of old school management (that filters down), or none at all, i.e. sessional personnel subjected to top down communication whilst neither lateral nor bottom up communication. This leads to lower quality due to no professional development nor collegiality, simply chance encounters with no support from academic management who defer to business management, or sales.
Who didn’t see this coming? Churn and burn degree factories. What a joke.
An excellent article that reflects the reality of the current university system in Australia. Universities are really strange organisations, being independent businesses with both public and private revenue streams. This should change. Universities should be re-focused on the essential role of educating Australians with the merit to have that opportunity. They should not be run for a profit at all and senior salaries should be regulated to reasonable levels on a national payscale.