Paying the cost of being the boss

Times are tough. With unemployment rates still high, many people and businesses are struggling to make ends meet. The same is true in colleges across the country and here in Oregon as well. Students feel the pain with rising tuition costs-Portland State had a complete campus closure over winter break in an effort to save money, meaning faculty is feeling the pain too.

‘ Now, Oregon University System presidents are taking a pay cut. All seven OUS presidents agreed to voluntarily freeze their salaries at July 2008 levels, according to The Oregonian. And why shouldn’t they? While students go into massive debt to get a higher education, university presidents enjoy free, state-owned housing and free cars on top of high salaries.

According to The Oregonian, the salaries for the state’s public university presidents range from $176,929 to $414,397-and remember, they don’t have to make mortgage or car payments with this money and only one, Western Oregon University president John Minahan, has to buy his own car.

This pay freeze bucks the national trend of pay raises for college administrators over the last several years. According to The New York Times, average pay for public university presidents nationally rose by a measly 2.3 percent last year. In years previous, that number had been at least 7.5 percent, with 2005 marking the highest increase in recent years at 19 percent.

The CEOs of America’s 500 biggest companies received an average pay increase of 6 percent last year, according to www.forbes.com. This is actually quite small considering that during the economic boom in 2004, they enjoyed a 54 percent increase.

Oregonians earning within the middle 50th percentile only received a 2.4 increase in average salaries from 1990 through 2008. That is slightly higher, over a period of 18 years, than the measly 2.3 percent that university presidents enjoyed last year. The Oregonian further reports that Oregonians earning in the top 2 percent received an average salary increase of 29.5 percent over the same 18-year period.

So, with adjustments for inflation, middle-class Oregonians are making less than 3 percent more than they were almost 20 years ago, and rich Oregonians are making almost 30 percent more. Something is really wrong with this scenario.

Oregon university presidents actually make less than their counterparts from other states, and it is appreciated that they volunteered for these pay cuts. These obscenely high salaries and generous increases shared by executives in both the public and private sector are symptoms of the bigger problem of growing wage inequality in America.

The argument is that if the university doesn’t pay well enough, the president will just find a position at another university that pays better. The trend has already been for them to jump around a lot. If we want a good president, we have to shell out the big bucks and perks. That may be true, but there needs to be a limit.

If universities across the country worked together to lower the industry standard wages for their executives, the benefits would probably trickle down to many other areas of the school that could really use the funding right now. This seems like a radical idea, but these are radical times we are living in.

Middle-class families are feeling financial burdens from all directions. President Barack Obama even called for universities to start cutting their own costs in his ‘State of the Union’ speech last week as a way to help these families. Along with health care costs, education costs are hitting the middle class pretty hard. All of this on top of the fact that middle class wages are not going up and most likely won’t be any time soon.

Wealth distribution in Oregon and in America is extremely unbalanced and the trend is anything but reversing. According to The Huffington Post, income inequality is at an all time high in this country. If the trend keeps up, soon even more money, and thus power, will be concentrated in a few people at the top. This is not only infuriating, but alarming as well. This struggle is far from over. Today’s college students are going to have to deal with this for a long time to come.

It is surely not easy to care as much about the shrinking middle class if you are not one of them. It says something about OUS presidents that they volunteered for this pay freeze, even though theirs are some of the lowest salaries in the country. But from where most of us stand, it’s pretty hard to swallow the obscene salaries of executives in the first place.
‘