Category Archives: Compensation

Annual Report on the Economic Status of the Profession, 2018–19

Source: American Association of University Professors, May 2019

From the summary:
For our annual Faculty Compensation Survey, the AAUP collected data from more than 950 colleges and universities across the US, including community colleges, small liberal arts colleges, and major research universities. The 2018-19 data cover more than 380,000 full-time faculty members, and also include salaries for senior administrators and pay for part-time faculty members.

On average, salaries for full-time faculty members at US colleges and universities are 2 percent higher in 2018-19 than they were in the preceding academic year. But with prices in the economy as a whole growing by 1.9 percent during the year, faculty salaries barely budged when adjusted for inflation. This is the third successive year that increases in average full-time faculty salaries have barely outpaced inflation….

State Collective Bargaining Laws and Public-Sector Pay

Source: Eric J. Brunner, Andrew Ju, ILR Review, Vol. 72 no. 2, March 2019
(subscription required)

From the abstract:
Using the Public Use Microdata Sample from the 2005 to 2015 American Community Survey, the authors provide new evidence on how state collective bargaining laws affect public-sector wages. To isolate the causal effect of bargaining laws on public-sector pay, they examine wage differentials between otherwise similar public- and private-sector employees located in the same local labor market. They estimate difference-in-differences (DD) models that exploit two sources of plausibly exogenous variation: 1) policy discontinuities along state borders and 2) variation within states in collective bargaining laws in states where the majority of public workers are without collective bargaining rights. Findings show that mandatory collective bargaining laws increase public-sector wages by approximately 5 to 8 percentage points. Results therefore suggest that mandatory collective bargaining laws provide a formal mechanism through which public-sector workers are able to bargain for increased compensation.

What do government unions do? Public sector unions and nonunion wages, 1977–2015

Source: Jake Rosenfeld, Patrick Denice, Social Science Research, Volume 78, February 2019
(subscription required)

From the abstract:
In this article we investigate the connection between public sector union memberships and nonunion worker pay. We leverage nearly four decades of Current Population Survey (CPS) data on millions of U.S. workers to test whether public sector union density, measured at the state-level, is associated with higher average wages among unorganized workers. We find stable and substantively large positive effects of state-level public sector union strength on nonunion public sector workers’ wages. These results are robust to the inclusion of a range of state-level controls, including GDP, average educational attainment, public sector size, and the strength of private sector unions. Analyses of public sector unions and nonunion private sector pay reveal a robust positive relationship – but one limited to women, revealing how occupational segregation interacts with pay-setting institutions to influence wage outcomes.

Compensation Consultants and the Level, Composition and Complexity of CEO Pay

Source: Kevin J. Murphy, Tatiana Sandino, Harvard Business School Accounting & Management Unit Working Paper No. 18-027, Last revised: March 8, 2019

From the abstract:
We provide fresh evidence regarding the relation between compensation consultants and CEO pay. First, firms that employ consultants have higher-paid CEOs—this result is robust to firm fixed-effects and matching on economic and governance variables. Second, while this relation is partly due to consultant conflicts of interest, it is largely explained by the impact consultants have on the composition and complexity of CEO pay plans; notably, this impact fully mediates the consultant-CEO pay relation. Third, firms with higher-paid CEOs and more complex pay plans are more likely to hire a consultant. Lastly, say-on-pay voting patterns suggest shareholders view positively the advice consultants provide but only when consultants do not provide other services. We also find suggestive evidence of boards “layering” new equity incentive plans over existing ones, thereby increasing the impact of composition and complexity on CEO pay beyond the premium the CEO would demand for bearing additional compensation risk.

The Child Care Crisis Is Keeping Women Out of the Workforce

Source: Leila Schochet, Center for American Progress, March 28, 2019

More mothers would increase their earnings and seek new job opportunities if they had greater access to reliable and affordable child care. ….

….This report highlights the relationship between child care and maternal employment and underscores how improving child care access has the potential to boost employment and earnings for working mothers. Based on new analysis of the 2016 Early Childhood Program Participation Survey (ECPP), it demonstrates how families are having difficulty finding child care under the current system and how lack of access to child care may be keeping mothers out of the workforce. The report then presents results from a national poll conducted by the Center for American Progress and GBA Strategies, which asked parents what career decisions they would make if child care were more readily available and affordable. Finally, the report outlines federal policy solutions that are crucial to supporting mothers in the workforce. ….

Closing the Gender Pay Gap: New Approaches to an Old Problem

Source: Kurt Stanberry, Compensation & Benefits Review, First Published March 14, 2019

from the abstract:
This article addresses new approaches to address a long-standing employment compensation problem—the gender pay gap. Existing approaches, including the Equal Pay Act and Title VII, are more than 50 years old, and have only been marginally successful in resolving this problem. A pay gap based on gender remains a problem today. New approaches include the potential passage of the Paycheck Fairness Act at the federal level and a variety of laws at the state level. Some states have passed pay equity laws that are more successful than the federal law due to the use of the comparable work concept. Additionally, some states have passed laws regulating the asking of salary history questions, as well as the use of non-compete and no-poaching agreements, all of which have a chilling effect on pay equity. The result of the combination of these actions is a probable reduction of the gender pay gap, although eliminating it remains a distant goal.

Openings for State Jobs Are Up, So Why Are Applications Down?

Source: Katherine Barrett & Richard Greene, Governing, March 25, 2019

A new study shows the depth — and the root causes — of the public sector’s workforce problem.

– A National Association of State Chief Administrators survey shows that state government job postings rose 11 percent from 2013 to 2017.
– Meanwhile, the number of people applying to state jobs dropped by 24 percent.
– CAOs cited noncompetitive salaries, negative perceptions about public service and insufficient recruitment as reasons.

Related:
Job One: Reimagine Today’s State Government Workforce
Source: Kayla Leslie, National Association of State Chief Administrators, March 2019

From the press release:
U.S. state governments face growing challenges attracting, building and retaining critically important talent and workforce skills, according to new research from the National Association of State Chief Administrators (NASCA) in collaboration with Accenture (NYSE: ACN) and NEOGOV.

Based on surveys of chief administrators and human resource (HR) directors in 33 states, a survey of nearly 3,000 state-government job seekers, and analyses of over 14,000,000 public sector job postings, the research — published today in a report titled Job One: Reimagine Today’s State Government Workforce — shows a widening gap between the number of open jobs and the number of applicants but also highlights strategies to help reverse the trend…..

‘Wage’, ‘Salary’ and ‘Remuneration’: A Genealogical Exploration of Juridical Terms and their Significance for the Employer’s Power to Make Deductions from Wages

Source: Zoe Adams, Industrial Law Journal, Volume 48, Issue 1, 21 February 2019
(subscription required)

From the abstract:
The Supreme Court in Hartley v King Edwards VI College (2017) has confirmed that an employee who refuses to work in accordance with his contract forfeits his right to be paid for the duration of the breach. The decision extends to professional employees paid a periodical salary the principle established in Miles v Wakefield MDC (1987). The present article sheds new light on these decisions by situating them within a broader debate concerning the function of the wage and the proper relationship between work and payment. Drawing on insights from economic theory, and engaging in a genealogical analysis of legal concepts, the article shows how this debate has, over time, conditioned the use of concepts such as the ‘wage’, ‘the salary’ and ‘remuneration’ in legislation and case law concerning deductions. It shows that the legal concept of the ‘wage’ is closely related to the economic idea of the wage as the price of a commodity, while the legal concepts of ‘salary’ and ‘remuneration’ are more closely analogous to the economic idea of the wage as the cost of subsistence. The courts’ tendency to confuse these concepts, and to analyse the employer’s power to deduct as a right to withhold wages for non-performance of the contract, tells us much about the implicit assumptions underpinning cases, such as Miles and Hartley, and how they have shaped the path of the law.