November 16, 2023

Universities slash spending on education, science, healthcare, and physical facilities; increase spending on bureaucracy, social services and entertainment (Michael Simkovic)

Real pay has declined steeply for law professors over the last 10 years, down by around 24 percent, while employment of law professors has stagnated.*  This cannot be not explained away by changes in professor age or seniority or by a shift toward clinical or other support staff.  Pay cuts vary by school, and appear to be worse toward the bottom, with some schools possibly even having small increases in real pay.

The decline in pay appears to be due at least in part to a steep decline in the number of applicants to law school, with the steepest declines coming from male students and white students.  This decline in interest in law school is not explained by demographics; the number of recent college graduates has increased during this period, including whites and males.

Although professor pay is sharply down for law professors, it is also down across all fields tracked by BLS OES data, with very steep declines in law, criminology, social work, and hard-science fields.

This raises an intriguing question: where did all of the money go?  Are colleges and universities facing declining revenues or increasing costs that have forced them to make cuts across the board?  And how have those cuts been implemented?  Are universities prioritizing some areas of spending over others?  Are those the right areas of spending for the long-term health of colleges and universities?  Are they prudent business decisions?  Do they suggest the right set of values?  Could they reflect poor leadership, agency costs or ideologically-driven decision making?

The analysis below attempts to begin to answer some of these questions, and perhaps shed light on others, using data from the BLS OES database.  The end product of the analysis is the change in compensation spending, in real 2022 billions of dollars, in each of several occupational categories at colleges and universities between 2013 and 2022.  Details of the method are explained below.**

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November 16, 2023 in Guest Blogger: Michael Simkovic | Permalink

November 14, 2023

Students sue NYU alleging administrators and professors tolerated or encouraged anti-Semitic harassment (Michael Simkovic)

The Reuters story is here.  The Bloomberg story is here.  The lawsuit appears to be directed at the college and the university, not at individuals affiliated with the law school.

More universities will likely face similar lawsuits and negative press coverage in the coming weeks and months.  Attorneys for plaintiffs at the law firm of Kasowitz Benson Torres have said that they plan to file suit against Harvard, Cornell, Columbia, MIT, Stanford, University of Pennsylvania and UC-Berkeley. 

Plaintiffs attorneys' have said that they intend to emphasize an alleged double standard at universities in their treatment of complaints of harassment from Jewish students compared to complaints of harassment from students from other minority groups.

November 14, 2023 in Guest Blogger: Michael Simkovic | Permalink

November 09, 2023

Ohio Court finds College legally liable for supporting libelous statements made by student protestors (Michael Simkovic)

In Gibson Bros. v. Oberlin Coll., 2022-Ohio-1079, ¶ 24, 187 N.E.3d 629, 642, appeal not allowed, 2022-Ohio-2953, ¶ 24, 167 Ohio St. 3d 1497, 193 N.E.3d 575, the Ohio Court of Appeals affirmed a decision by a trial court that granted roughly $30 million in damages and attorney’s fees to a bakery that sued Oberlin College.

This case raises serious concerns for colleges and universities that take an active role in supporting student protests on campus. It suggests that statements made or actions taken by student groups could legally be attributed to a college or university under certain circumstances.  This could prove very financially costly for universities.

In the Oberlin case, one or more college employees attended protests and allegedly helped distribute flyers containing defamatory statements and allegedly helped obtain media coverage for those statements.  The decision did not, however, turn on this.  The court emphasized that college email lists were used to distribute defamatory statements about the target of a protest and that college buildings were used to display flyers containing defamatory statements, and that college officials had the power to stop this from happening. 

The college also encouraged a boycott of a targeted business, which increased the damages awarded to plaintiffs.  The college was aware of student harassment directed at the target of the protests and did nothing to stop it.

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November 9, 2023 in Guest Blogger: Michael Simkovic | Permalink

November 08, 2023

The case for athletics in law school (Michael Simkovic)

University leaders have gotten into the habit of commenting on world affairs on behalf of their universities.  This is often an attempt to reassure students who may be stressed or distressed by world affairs.  Mass media and political activists can grab people’s attention by exposing them to distressing stimuli. 

But official university positions can create problems for universities: such positions potentially infringe on the academic or intellectual freedom of those within the university with opposing viewpoints; they can alienate potential students, faculty or donors; they can distract administrators from running their institutions.  They can distract students from studying, and distract faculty from teaching and doing research.  They can turn people against each other.

Universities have also sometimes encouraged the formation of student groups that engage in political activism on or off campus or promote certain religious, ethnic, or other identity-based associations.  While this can foster a spirit of camaraderie, it can also be distracting, encourage conflict, and prevent cooperation.  Data from the American Time Use Survey shows that more time spent on political activity is associated with less time spent studying or working and lower incomes.

There are other ways of reducing stress, increasing focus, and encouraging teamwork.  One is intramural athletics.  Physical activity is healthy, especially for mostly sedentary lawyers, law students, and professors.  Physical activity also reduces anxiety and protects against depression.  And it promotes mindfulness.  People who play sports go on to earn more money than similar people who don't (see also here).

Athleticism encourages healthy habits—eating healthy, getting enough sleep on a regular schedule, avoiding drinking or smoking or recreational drug use. The leading causes of death are heart disease, cancer, obesity-related illnesses, car accidents, and other illnesses that are exacerbated by unhealthy habits—not the acts of violence that the media (and some law school deans and university presidents) focus on.  Whatever threat someone might be ruminating about, odds are good that their own diet and exercise habits are statistically more dangerous.  Playing sports reduces obesity.

Participation in athletics may be more effective at promoting understanding and friendships than other approaches.  Playing sports encourages bonding with teammates, and respect for opponents.  Working out and training teaches people discipline, time management, and the importance of enduring pain in order to grow and improve—skills that are important for later success.  Athleticism can also make it easier for law graduates to socialize with and form connections with clients. 

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November 8, 2023 in Guest Blogger: Michael Simkovic | Permalink

November 07, 2023

Professors’ pay is down across fields, but law professors have taken bigger cuts than most (Michael Simkovic)

My previous posts have documented a very large 24 percent decline in real pay for law professors over the last decade, from 2013 to 2022 (see also here and here). Some readers have asked whether professors in other fields are also seeing their pay decline.  The answer, unfortunately, is yes.  However, the decline in pay for law professors is among the most severe in higher education.

Declines in average real pay for professors in different fields range from a low of 7 percent to a high of 27 percent over the decade.  Large fields that have fared better than law include the humanities, communications, economics, business, philosophy, the creative arts, nursing and other healthcare, mathematics, computer science and engineering. 

The only fields with bigger declines in pay than law are social work, criminology, and environmental science. 


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November 7, 2023 in Guest Blogger: Michael Simkovic | Permalink

November 03, 2023

Elite law firms pledge not to hire law students who demonstrate poor judgment and behave unprofessionally (Michael Simkovic)

The New York Post and Reuters have the story.  The stories report that law firms and corporations are blaming universities for not properly educating their students regarding appropriate conduct.

For a discussion of how law schools can help prepare students to behave in a way that will help them succeed in the corporate world, see here.


UPDATE, Nov. 5: For a fascinating discussion of Hamas's perspective, and how western secularists can misunderstand it, see here.

November 3, 2023 in Guest Blogger: Michael Simkovic | Permalink

November 02, 2023

Is pay at your law school keeping up with the cost of living? (Michael Simkovic)

On average, real pay for law professors has plummeted in the last 10 years by 24 percent.*  A large decline in real terms is also apparent in data from the Society of American Law Teachers.  However, pay has gone down by more at some law schools than others.  A few law schools, especially the most elite and best funded institutions, may have even seen real increases in pay. 

How can you tell if pay at your law school is keeping up with the cost of living? 

An individual high-skilled worker will typically see nominal increases in pay from year to year.  The pay increase is observed by the individual as a single pay increase or raise.  But there are really two components to this pay increase:

  • A cost of living adjustment, holding constant experience and productivity
  • A raise to reflect increased experience and productivity of the individual worker

We’re interested in (1), the cost of living adjustment. In particular, we want to know whether it is larger or smaller than a measure of inflation or growth in the cost of living.* 

However, to get at (1) the cost of living adjustment, we have to subtract out (2) the raise due to increased experience, from individual pay increases.

This means that we need an estimate of how much pay should go up or down with experience. 

I’ve created a spreadsheet, here which provides such an estimate. Inputs are highlighted in yellow. 

Download Law professor wage growth from experience and inflation

My spreadsheet enables users to enter an end year (for example, 2022) and a start year, input their age at the end year, and their actual nominal salaries in the start year and the end year.  It also lets users choose between cost of living adjustments based on either the average wage index or the Case Shiller Housing Index.

The spreadsheet then calculates how much of a pay increase the user would have to receive between the start year and the end year to stay even with cost of living, assuming that the user was also getting the expected increase in pay due to increased experience and productivity. 

This expected increase in pay is expressed both as a percentage pay increase and as an expected compensation in the end year. 

If compensation in the end year is lower than this amount, this indicates that pay at your school may not be keeping up with costs of living.  Or it could mean that you are receiving lower than average productivity increases.  If other members of your faculty also have experienced slower than expected pay growth, that provides stronger evidence that overall faculty compensation is growing slower than the cost of living.

What this means is, to get the most out of this spreadsheet, you’ll need to share it with your colleagues and have a conversation about the results that you’re getting.

Users might want to customize the spreadsheet to use an index of local housing prices rather than a national index.

More details on how I estimated the expected wage increase from experience is explained below.

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November 2, 2023 in Guest Blogger: Michael Simkovic | Permalink

October 25, 2023

Double-digit drop in real law professor pay confirmed by second data source (Michael Simkovic)

My previous post presented data showing that law professor pay has declined 24 percent in real terms from 2013 to 2022 using figures from the U.S. Department of Labor Bureau of Labor Statistics Occupational Employment and Wage Statistics Report.*  Restoring law professor pay to 2013 levels would require at least a 31 percent increase in pay, not counting inflation since 2022.**

Several readers asked whether this extremely large drop in real pay might reflect a change in the relative seniority levels of law professors—for example, more clinicians and legal writing instructors or a higher ratio of junior faculty—rather than a decline in pay for tenured track doctrinal faculty after controlling for seniority.

This optimistic explanation is unlikely according to new data from a second source, the Society of American Law Professors (SALT), presented below.  Instead, the BLS data appears to accurately reflect the average decline in law professor real pay.  The SALT and BLS data also both suggest variation across schools.  SALT provides more granular detail about the full extent of that variation.  In the SALT data, a small minority of law schools (less than 15 percent of the sample) even show small increases in real pay for law professors.

Data from SALT confirms the BLS OES’s numbers for the decline in mean and median pay.  SALT’s data includes only tenure-track doctrinal faculty broken into three levels of seniority—assistant professor, associate professor, and full professor.  SALT also provides school-specific data for a relatively large number of reporting schools. Across the three seniority levels, roughly 10 to 20 percent of law schools reported data in both 2012-2013 and 2019-2020.  I use only these schools reporting in both years for my analysis to ensure consistency across years (similar to a fixed effects analysis).

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October 25, 2023 in Guest Blogger: Michael Simkovic | Permalink

October 12, 2023

The forgotten virtue of emotional self-control (Michael Simkovic)

Abraham Lincoln managed his feelings of anger by writing “hot letters”, which he would then set aside until his emotions cooled.  With a clear head, he usually decided that it was inadvisable to send or publish the letters.  They would remain safely locked in a desk drawer until they were discovered by historians.

It is important to recognize when one is angry, and to realize that being angry—especially when accompanied by feelings of self-righteousness or moral virtue--can be like being drunk or high.  It can be thrilling and energizing in the moment but also impairs one’s judgement.  It can lead to mistakes that cause long lasting harm to the angry person and those around him or her.  Avoiding making errors of judgment while emotional, especially while angry, is an extremely important skill for professionals such as lawyers.  It has also been praised as an important virtue by Buddhist monks, stoic philosophers, and psychologists. 

A particularly advanced technique is the ability to calm oneself extremely quickly so that amount of time spent angry—and therefore vulnerable to errors of judgement—is too short to cause harm, even in a live face-to-face interaction.  Those who perfect it appear to never get angry, because the time spent angry is so brief. 

This is a skill that we should be teaching in law school.

When I taught taxation, including the tax implications of divorce, I used to show my students a clip from the 1980s film The War of the Roses.  In the film, a Harvard Law graduate and corporate lawyer played by Michael Douglas becomes unhinged during a brutal divorce from his wife, played by Kathleen Turner.  After being injured by his wife in a physical altercation (she was a former gymnast with extremely powerful legs), Douglas believes himself to be dying of a heart attack.  Not wishing to die leaving behind ill will, Douglas writes an emotionally generous love letter to his wife, declaring how grateful he is to her for the happy years they once shared together and how much of his success he owes to her. 

When Douglas survives hospitalization for what turns out to be a mild ailment, and attempts to reconcile with his wife, she mocks him for being a hypochondriac.  Later, during divorce property settlement negotiations, Kathleen Turner’s character turns the letter over to her divorce lawyer, who reads passages back to Douglas’s character.  Douglas becomes enraged and launches into a vicious tirade against the lawyer—who he knows full well is doing his (admittedly distasteful) job. Douglas ends by calmly and somewhat more politely asking if he can have a moment alone with his wife.

The divorce lawyer, brimming with unflappable charm and grace, smiles at Michael Douglas, chirpily replies, “Certainly”, and leaves the room, happy as a clam. 

This clip makes an important point: a great lawyer has supreme emotional self-control and does not allow anger, fear or hurt—his or her own or others—to cloud his judgment or control his actions.  No matter the emotional turmoil, the mind must be as smooth as the unperturbed surface of a body of still water.  The good lawyer is non-reactive, studies the situation as it is and not as he wishes it would be, and thinks about how best to accomplish his most important objectives given real world constraints.

There are many topics about which many people, including law students, law professors, and law school administrators feel passionately and intensely disagree with each other.  Discussion of these topics can fill people with potentially destabilizing emotions.  These topics include race, sex, politics, religion, and sometimes money. 

A good lawyer understands, like a Buddhist monk, that there is no such thing as righteous anger.  There is only emotional self-control and self-destructive foolishness.

A recent incident illustrates this rather nicely.

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October 12, 2023 in Guest Blogger: Michael Simkovic | Permalink

September 22, 2023

A Lightly Comedic Primer on Personal Finance for Law Professors (Michael Simkovic)

Many graduates of elite law schools work in large corporate law firms either initially or after a clerkship.  This requires law graduates to work closely with businesspeople, accountants, bankers, and other financial professionals.  Those who have expertise in finance or accounting are at an advantage.  Those who do not, but wish to succeed, quickly get up to speed.  Given this reality, surprisingly few law professors are financially sophisticated.  Some of them make suboptimal decisions, which over the course of a lifetime can cause them to end up hundreds of thousands or even millions of dollars poorer than they otherwise could have been. 

This article, which is intended for educational and entertainment purposes only, and not as individualized financial advice, may be of interest.  If you want individualized advice, talk to a licensed financial advisor who you pay in such a way that your incentives are well aligned. 

The goal of personal finance is to achieve the highest rate of return possible, on an after-tax, after-fee, after-inflation basis, without taking unacceptably high risks.  The higher the rate of return on investment, the less the investor needs to save now and the more the investor can consume later.  A “return” in this context, means the growth in the value of the investors’ assets or net-worth, both from asset price increases over time and from distributions of cash such as dividends, interest or rental income, which are often reinvested. 

Investments typically involve a trade-off between risk and return.  On average, over the long term, investments that are riskier—such as equities and real estate—offer a higher rate of return than investments that are safer, such as savings accounts, CDs, treasuries and highly rated corporate or municipal bonds. 

Investors can also arguably achieve a “free lunch”—reducing risk without sacrificing average returns much—through diversification within a risky asset class.  The easiest and simplest way to do this is to purchase a low-cost equity indexed mutual fund which tracks a broadly diversified portfolio of U.S. publicly traded firms, such as the S&P500, the Russell indexes, or the Wilshire 5000.  Within these broad indexes, when some stocks go down, others will go up, making overall returns smoother and less volatile.

Trigger Warning: Nerdy Jokes Appear after this Point.

Some investments, however, are over the long run, what is in technical finance jargon referred to as “what the heck were you thinking?” investments.  They carry both high risks and poor long-term returns.  These include, for example, commodities (gold; oil), cryptocurrencies, or your cousin’s idea to open a fine-dining restaurant in Patchogue.

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September 22, 2023 in Guest Blogger: Michael Simkovic | Permalink