Jack Lew, John Galt, and American universities
Instead of complaining narrowly about newly confirmed Treasury Secretary Jack Lew’s bloated compensation at NYU, we should demand that all universities release all employee salaries. As tuitions skyrocket, students and parents have the right to know where their dollars are going.
J. Scott Applewhite/AP/file
Why does a university education cost so much?
I’ve got one kid in college and another on the way there, so the question is very much on my mind. I also teach at a hugely expensive university, which paid one of its executive vice-presidents more than $800,000 a year and loaned him at least $1.4 million to buy a home. He also received a $685,000 severance payment, and his loan was ultimately forgiven.
I speak of Jack Lew, President Obama’s nominee to lead the Treasury Department. I didn’t meet Lew when he worked at New York University, from 2002 to 2006. But I haven’t met most of the administrators atop our massive institution, which continues to hire more and more of them.
And that’s the real story in the controversy over Mr. Lew, who was confirmed by the Senate as President Obama's new Treasury secretary late yesterday. Most media reports have focused on Lew’s efforts to steer NYU student borrowers towards “preferred lenders” like Citigroup, which made Lew a top executive after he left NYU. In fairness to Lew, though, we really don’t know if there was any quid pro quo there.
Here’s what we do know: between 1975 and 2005, the number of “executive, administrative, and managerial employees” at American universities grew by 85 percent. Meanwhile, so-called “professional staff” – accountants, counselors, admission officers and so on – rose by a whopping 240 percent.
But the number of professors grew by just 51 percent – almost exactly the same rate as student enrollment. In 1975, colleges and universities employed one professor for every 16 students; 40 years later, there was one professor for every 15.