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Recently, the lowest paid workers on campus at Kentucky State University were compensated at the state’s meager minimum wage of $7.25 per hour. The university president, on the other hand, earned a salary of almost $350,000. No one would argue that a university president isn’t worth more to his/her institution than, say, a student worker or a gardener. But is there an ethical or moral element in play when an administrator of an institute of higher learning (and, by extension, a values-based organization) is compensated at a rate 25 times that of the lowest head on the totem pole? What about larger not-for-profit organizations like the Kennedy Center for Performing Arts, whose executive receives a salary well above $1 million? Can colleges bloated with highly-paid administrators provide an adequate defense for supporting a class of well-compensated executives in an age where income inequality has become such a glaring issue? What is the actual market for people filling senior leadership positions?
What’s the Big Idea?
I’m ruminating on these topics because I recently came across a story on Business Insider about Dr. Raymond Bearse, the interim president of Kentucky State University, who cut his salary $90,000 (to a paltry $259,745) in order to raise the full-time minimum wage on campus to $10.25. Bearse is still well-compensated (as Chris Rock would say, he can still afford extra cheese on his Whopper) but his selfless act makes a huge difference to those who benefit from the decision. When taken in context, the impact that $120 more per month will have on those getting raises is much, much larger than the relatively meager $1875/wk pay cut taken by the interim president. Money that may have gone toward Bearse’s savings or investments will now be put toward putting food on tables and sustaining the local economy. It also potentially means less of a need for government assistance to subsidize the lives of those paid too little to live. This move makes sense from both an ethical standpoint and an economic one — the money serves the most good in the hands of those more likely to spend it.
What’s fascinating here is that usually when people in similar seats of power make these types of decisions, the cuts necessary to sustain pay raises are rarely taken from their own pockets. Instead you see price hikes on tuition or slashed departmental budgets or some other form of robbing Peter to pay Paul. Very rarely do you see a highly-paid executive say, “you know, I can still live comfortably with less money,” and do such a thing.
Bloated executive and administrative salaries are partly the result of a flawed system that depends on the whims of regents, trustees and other board members. More often than not, these board members hail from a similar social class of executives and therefore benefit when they inflate the salaries of CEOs, administrators, and directors.
Without delving too deeply into public and private corporations, the concerning issue exists in the nonprofit sector where various organizations like colleges and charities should conceivably be battling income inequality rather than contributing toward it. But all you have to do is check the salary of a dean and compare it to a lowly adjunct — who’s really benefiting from the outrageous price of higher education? What good does it do to overpay the people at the top and stiff those on the bottom?
It’s not a sustainable solution, at least not in the long term. We have to hope more leaders like Dr. Bearse emerge; the only people who can reverse this trend are in positions of power. Doing the right thing may involve pulling a George Washington and giving up some of that power.
But power is a small price to pay in closing the widening chasm between the haves and the have nots.
What do you think?
Read more at Business Insider