Monday, February 02, 2009

Bad Economics 101

There are some obvious ways in which the current World Economic Crisis is affecting Academia -- students unable to pay tuition, academic and staff positions going unfilled owing to hiring freezes, and building/renovation projects delayed are among the most prominent -- but what about other effects?

I wrote last year about how the lives of some of my graduate and undergraduate students have been disrupted by their having to move, with little notice, out of their apartments and find a new place to live, owing to the financial problems of their landlords. Since then, I've read that tenants in some places are being given more time to move out of foreclosed properties, as tenants are innocent victims in these situations.

The following are other examples of which I am aware, based on my own experience and discussions with colleagues at other US universities and colleges:

- Despite hiring freezes, some open faculty positions are being converted into non-tenure track, temporary appointments, and some are being left empty, resulting in canceled classes and/or higher teaching loads for other faculty, and uncertain employment options for those on the job market.

- Fewer funds are available for graduate teaching assistantships, even though undergraduate enrollments are not down, so there are the same number of labs to teach. I am not sure how this is going to work. Some of the slack can be taken up by eliminating coveted non-teaching TA positions (e.g., grader, AV/demo facilitator positions). Some departments hire undergrads as TAs because undergrads are cheaper than grad students (and, according to a colleague of mine who keeps track of these things, their teaching evaluations are as good as, or better, than those of the grad student TAs).

- Fewer/no funds available for teaching supplies. This happens from time to time anyway, even in non-crisis years, but is always unfortunate because there is always a significant amount of teaching-stuff carnage during a typical academic year and so there is almost always a dire need to replace the worn out, damaged, destroyed materials.

- Fewer/no funds for 'luxury' items such as speaker series; people to help with website construction and maintenance; social events; support for student travel to conferences; department newsletters..

- No raises this year or next.

- Don't even think about the possibility of getting a new building or renovated space.

- Adoption of bizarre and inefficient new accounting practices that don't seem to have any cost-saving benefits and that make everyone cranky but that perhaps have the effect of making it seem like Action Is Being Taken. Example: Some colleagues, owing to their university's new rules about hiring and justifying grant-related expenses, are unable to spend $ that is in existing grants. This grant money came from a funding agency and the expenses were justified in the original proposal. It is difficult to think of a (sane) reason why grant funds cannot be spent on the materials and activities for which they are intended.

Consider the following: More than a year ago, a colleague hired a postdoc. It was a 2-year position, but as is common practice at that university, the official offer was for the first year, with the second year contingent on adequate performance during the first year. The grant contains funds for two years: year one at Salary 1; year two at Salary 1 + raise. The postdoc did an outstanding job from the very beginning and was assured of the second year, but when it came time to start the second appointment year at a higher salary, the university said No to the promised raise.

The supervising faculty/PI argued with the accountants, argued with the Chair (who was sympathetic and tried to help), and argued with the Deans. The accountants and administrators were not convinced by the reasoning that the money for the raise was in the grant and the university was not saving any money by denying the postdoc the raise. The university people said that because the raise was not promised in the original offer letter, the raise could not be paid, in keeping with a hiring and salary freeze across the university.

Despite many many hours of ethics training on how to be responsible with grant funds, the PI came up with a creative solution to the no-raise problem, and this solution actually made the postdoc very happy. In the PI's opinion, not giving the postdoc a raise was more unethical than the creative solution.

This situation and others like it have generated much discussion among a group of my colleagues. Is it possible that university administrators, even at a big R1 university, do not know how grants work? Or is there something we faculty don't understand about spending grant funds on the items specified in the grant?

Maybe everyone is in Crisis Mode and not thinking clearly, and an efficient (and maybe even ethical) way forward will become apparent in the near future. I hope so, but at the moment it seems that the already difficult situation is in some cases being made even more difficult by strange and unhelpful policies that harm students, researchers, and faculty.

19 comments:

Alex said...

Your posts keep resonating with me, between last week's post on student questions and emails and this one on university spending. Suffice it to say that there's talk of defaulting on start-up packages.

I'm sure that this will do wonders for our reputation and our ability to hire good people in the future.

Anonymous said...

I think that the thing the school doesn't understand about grants is that they are NOT the University's, they are just holding them in trust. that grant money would not be in their accounts without that PI.

How about no money for faculty to make copies. Even for exams.

Thomas Joseph said...

Maybe everyone is in Crisis Mode and not thinking clearly ...

Unfortunately, this is the EXACT time when we need cool and level heads. It's a shame that common sense often seems to be the first thing thrown out the window when times get rough. Then again, maybe there never was common sense there in the first place, and it only took the crisis to reveal that fact.

Anonymous said...

My university is doing the same thing, with both external grants and start-up funds. They are trying to hold on to every penny they can so that they can pay off some big bills that come due at the end of the fiscal year. The ability to attract and hire good people -- or any people -- seems to be the least of their concerns right now. And with so many universities in the same boat these days, who's to say that any one university's reputations will suffer?

John said...

Your post is right on the money. You could probably also collect a number of stories about the contradictions with proposed "stimulus" projects. A new building is now scheduled to break ground in May next to mine, which our building is opposing in a NIMBY way, which is ironic logic all around.

One factor we faculty don't give sufficient credit is that flexibility is also expensive. If the bureaucrats are going to bend the rules, as in allowing the raise that is fair to the postdoc, it takes extra effort to be sure more trouble is not generated than relieved. Many faculty assume their overhead is more omnipotent than it really is.

Thomas Joseph said...

How about no money for faculty to make copies.

My wife went back to school for another degree. She wanted to change her career path. Both she and I are amazed at the total waste of paper that occurs there. They have a system, called "Blackboard", which is an online interactive system for posting syllabi, homework, online quizzes, and any other information a teacher would need to communicate to a class.

However, it remains an under utilized resource. Why the university doesn't mandate it's use is beyond me.

Anonymous said...

I've just heard that all faculty and staff at my graduate alma mater are being forced to go to 4-day work weeks, regardless of whether they are paid from grant or state funds.

squawky said...

Have no idea what my university plans to do re: cutting budgets - we're under a hiring freeze (although at least one other public university in my state has advertised for open positions this year), and we've been told to put in all requests for new supplies ASAP (you can't cut money that's already been spent, I guess).

Re: grants - your comments about grant offices not realizing how grants work resonating here... one of my first proposals had a pretty large subcontract for some colleagues. My grants office told me to make sure to state which university that subcontract would go to explicitly in the proposal, as otherwise our state attorney general could choose to put the subcontract up for bid and have someone else do the work cheaper (if the grant was funded - it wasn't).

I was trying to get my routing forms signed, so I didn't end up trying to explain how bidding out the subcontract would be a seriously bad idea. I just hope there is someone in the administration that realizes this...

Sigh - we're getting the "impact of the cuts in the budget" meetings this week... I can't attend them, so have to hope all ends up ok...

chemcat said...

we got a two weeks furlough. we cannot take ti during the summer, neither on days we teach or have service activities. On furlough days we won't be able to check email, enter the building, etc.
The cut is across the board, and will sum up to about 10% of the salary. There are serious fears that this will become a norm (ie paycut).
Everything was handled top down, no discussion; faculty were very passive too. Proposals of sliding scale to spare the lowest paid staff were unanswered.
Meanwhile, the U is going ahead with at least two high profile hires (center type, bringing many staff people). Technically the money comes from a different pot, yet it's a bit like the automotive execs flying on separate corporate jets to DC.
Plus, once the big shots are here, they will be on state payroll like everybody else...

here too it was initially decided to cut salaries to people on soft money, but I think that after a good chat with federal agencies, this idea has disappeared... Basically the admin thought that it was unfair to not cut everybody, again showing no understanding of how grants work....

Anonymous said...

We have many of the same issues in Canada with one exception -- applications to our grad program by US students is up from (typically) none to twelve (all came in late) this year. Part of our 'stimulus package' was increased funding for grad students. However, with cuts to the bug three granting councils this is pretty much a wash for faculty.

Narya said...

If grants in your world work the way they do in mine, then not spending the money = LOSING the money. You'd best have a plan for "unobligated funds," not to mention a conversation with your project officer about the acceptability of same, or you will have to give the money back.

Anonymous said...

Your blog is great! Have been following for awhile but never posted. Anyway, I'll be starting my postdoc in a few months and I was wondering if you or any of your readers have any advice regarding "positioning" myself for the academic job market in a few years. I hate to say it that way because it sounds so calculating, but I want to be realistic about the number of qualified PhDs/MDs vs. the (dwindling?) number of faculty positions. Besides the ability to do good science, what are other skills that cash-strapped universities might find appealing? Teaching experience? And should I tailor my postdoc research in a certain way? For example, by using a cheaper model organism or opting for simpler technology. Thanks in advance for any ideas...

Anonymous said...

Thomas Joseph: we do that kind of thing already. But, you can't do that with an exam for a 300 person intro class. I suppose you could do online exams, but I would never; the cheating would be impossible to control.

Narya: that fits with what I know about grants. Of course the university is the one that fills out the accounting paperwork, so God knows what would actually happen (ie: maybe they could find a way to keep it?)

Anonymous said...

I'm a new professor dealing with the crazy rules - which are even harder when all of your funds are start up and totally under the rule of the crazies (yes they are 'unrestricted' but with hiring freezes and such it gets murky whether I can hire a staff person I need. or make large equipment purchases).

On the bright side, at least faculty jobs have some (?) security - I feel for the staff who are going to bear the brunt of this and all of us will be doing more with no raises.. sigh

Unbalanced Reaction said...

It makes me angry when school accountants (like at LargeU, argh!) fail to grasp that salaries for post-docs come from grants AND the grants are used for overhead for the school. Sigh.

With the current job climate, I'm feeling *very* lucky that I got to avoid the job market this year.

Karl said...

Creative solution==Give postdoc Pcard to buy non-alcoholic foodstuffs for the next 6 months? Buy Postdoc sub-property-tag-limit hardware? Travel funds used for "research" in costa rica?

Thomas Joseph said...

Thomas Joseph: we do that kind of thing already. But, you can't do that with an exam for a 300 person intro class.

Indeed, that's a given and I have no qualms with that whatsoever. What I'd like to see, and what I stress here at work myself is ... you make the adjustments where you can. If you're not doing that (and you guys definitely are), you're just plain lazy.

Uncle Al said...

Management is about process not product. Managers make decisions, workers make mistakes. To find a bottleneck, first look toward the top of the bottle.

If your grant funding supports fungus growth in HeLa cell cultures and you therein discover a generic cure for cancer, you must reapply with a revised grant or risk prosecution for embezzlement of laboratory funding (felonious negligent discovery).

Defer to vermin defining truth and morality by convenience of the moment. Freedom is compliance.

Anonymous said...

Its more than likely that Administrators don't know grant funding rules, either specifically or in broad terms.

I've observed in a five year stint in Administration as an officer, rather than an academic role, that teaching labour expands to fill funding. This is not as true of research funding, which seems to be based around discipline culture / grant funding structure.

Finally, I suspect that the lack of hiring / raises has to do with the industrial system in the US for academics. Other systems which have had national industrial bargaining, and social expectations of COLA adjustments for all workers tend to have raises even in slack years. I suspect this is due to central government funding of tertiary teaching and the capacity for central governments to absorb debt in superior ways to institutional actors / local governments. The downside of this for academics appears to be wage flattening, level flattening and changes in the structure of competitive grants.