Huge salaries, but then crying poor. Are universities their own worst enemies?

This is part two of the series Hard Knocks Uni: The Crisis in Higher Ed. Read part one here.

Macquarie University was looking for savings. Facing a loss of revenue from international students, it cut millions from its staffing budget, and more than 150 left in a mix of voluntary and forced redundancies since the pandemic began — more if you factor in casual and fixed-term contracts that weren’t renewed.

Last year its vice-chancellor, S Bruce Dowton, who is usually photographed in a bowtie, earned more than $1 million. 

Let’s not villainise Dowton too much. Bloated executive salaries have become the norm in Australia. Even last year, when universities cried foul about a lack of government support during the pandemic and some VCs took a solidarity pay cut, salaries remained absurdly high. 

And that points to a tension at the heart of the higher education sector.

Pretty much everyone in higher education is deeply pessimistic. But the view from the chancellery isn’t the same as the view from the coalface. University leaders, many of whom have earned millions a year, rightly condemned years of government underfunding and neglect. Yet their salaries have grown and management has ballooned while their institutions have become structurally reliant on wage theft and an increasingly casualised, insecure workforce.

The corporate uni

The current state of higher education is a tale as old as neoliberalism itself. It goes a little like this: over the past 30 years, the Commonwealth more than halved its funding. As funding dried up, universities were forced to turn to other sources for income, and became heavily reliant on international students.

“They’ve put most of their eggs in the international student basket and they’ve been very successful,” University of Wollongong council member Adam Lucas said. “But they’ve been cutting programs, cutting staff, increasing ratios and casualising the workforce.”

At the same time, universities were being asked to do a lot more, no longer just educational institutions, but large, semi-corporate, state-owned entities. Their corporate drift is reflected in the astonishing growth of what anthropologist and activist David Graever might call “bullshit jobs” — swelling ranks of management, the glut of roles like “deputy vice-chancellor student experience”.

Between 1997 and 2017, middle management roles grew 122%, and senior management 110%. Regular professional staff grew at just 37%. Support staff declined. 

The corporate drift is also reflected in changes to boards and councils, increasingly dominated by people from the business world with no clear ties to academia.

“It’s been a deliberate strategy to disempower academics and control us and how we operate and function,” Lucas said.

La Trobe University political historian Judith Brett agreed: “When they restructured university councils to make them more like boards of directors, that was a massive mistake. That was when they started seeing universities as a financial entity.”

Councils are also becoming less democratic. For example, in 2016 the University of Sydney cut the size of its Senate and the number of positions elected by staff and alumni.

But the most obvious and unpopular sign of what universities have become is in vice-chancellor salaries. Despite some — including former University of Sydney boss Michael Spence — taking a pandemic cut in 2020, several still earned salaries in the millions. Duncan Maskell at the University of Melbourne earned more than $1.5 million.

“There’s no doubt salaries in executive wings of universities are high — there’s no point pretending that’s not the case,” Universities Australia chief executive Catriona Jackson said. “But if you actually look at the financial situation more broadly, before the pandemic universities were operating at a margin of 6.2%. That’s now 2%.”

Professor Andrew Norton, an expert in higher education policy at the Australian National University, said high VC and executive salaries have been a huge own goal for universities that for years have been putting the case for more public funding. 

“Not only has it angered students but it’s also riled the very politicians universities rely on for support,” he said. “You don’t need to pay someone a million dollars to run a university.”

Building bonanza 

Executive salaries are not the only things to grow. University property portfolios have soared off the back of the river of gold from foreign fee-paying students. The net asset holdings of Australia’s public universities is about $61 billion. 

“Part of the furore over the current job cuts is that public universities have millions of dollars tied up in investment, including property, stocks and other kinds of assets,” Lucas said. “They’re hiving this money off from normal operating expenditure. They’re not using it to protect our jobs or conditions or support research. They’re just keeping it in separate accounts.”

Jackson says not all assets can be simply sold: “It’s easy to look at buildings and say that is money. But buildings have been gifted; they have national trusts. They often don’t make money. They cost money.” 

There are signs this is changing. The University of Sydney is selling at least 13 properties. The UTS has sold three student accommodation properties for $95 million.

On the coalface

While all this has been going on, universities have adapted to stalled funding from the Commonwealth by deepening their reliance on casual labour.

It isn’t clear just how casualised the academic workforce is, but at some universities it’s about 70%. At the universities of Sydney and Melbourne, about 50% of the work is done by casuals. 

Yaegan Doran from the University of Sydney’s casuals network said: “From a macro perspective, as university funding was cut by governments, managers looked for cost-cutting, and began casualising their workforces.

“At a more cultural perspective, the standard thing was 70s; it was not as unusual to move from a casual to permanent job. It became your penance for the next step. Now that pathway is a lot narrower.”

For years, the casualisation of academic work was a kind of open secret in the higher education world. Because the National Tertiary Education Union was traditionally dominated by permanent staff, the plight of casuals wasn’t often centred in their campaigns.

But job security has become an increasing focus of the union, mainly because COVID-19 blew it all into the open.

In part that’s because the pandemic laid bare the nexus between casual work and systemic wage theft. Suddenly universities were back paying millions to staff who had been consistently underpaid for years.

Last month, Monash paid $8.6 million to underpaid staff. That followed payouts of $12.75 million at the University of Sydney and $10 million at the University of Melbourne.

The casual problem has also got attention because it’s precarious staff who’ve been on the coalface of the COVID-driven ructions in universities. Casuals lost their jobs as universities rushed to offset projected pandemic revenue losses.

Doran found out he had lost his job “overnight” after the pandemic hit. 

Those who were still working bore the brunt of the universities’ struggle to suddenly overhaul teaching models. Shifting between online and face-to-face learning blew out their workloads. The return to classes in between COVID outbreaks suddenly gave them more unexpected work.

At La Trobe University, for example, casual staff were handed university-branded cleaning packs and expected to sanitise classrooms. 

Not much sympathy

The reality of higher education makes it harder for management, and the higher education sector, to win sympathy in the larger fight over long-term funding.

On one hand, vice-chancellors cry poor. On the other, many supported some of the Coalition’s more ideologically driven attempts at structural reform that would starve the sector of funding.

In 2014, ANU vice-chancellor Ian Young, who headed the Group of Eight, was a key backer of the Abbott government’s failed attempt to deregulate university fees. Most threw their support behind the Morrison government’s Job-ready Graduates package. 

And while those on the coalface struggle, we still don’t really know by how much, because that has been well-hidden.

Next: the hidden crisis at universities.