Market pay piffle

August 10, 2017

In defending vice-chancellors’ high salaries (“Are vice-chancellors in the UK overpaid – all things considered?”, Opinions, 3 August), Len Shackleton brings out the tired old argument, also used in the recent BBC pay scandal, about market rates of pay. But as a professor of economics, Shackleton must know that what he says is a distortion of the market argument.

In a market, different rates of pay are meant to compensate someone who works in tough conditions – the head of the American University in Beirut, say – compared with someone whose conditions of employment and place of work – Shackleton mentions Dame Glynis Breakwell at the University of Bath – are much better. A market in pay is not supposed to be used to argue that just because vice-chancellors in North America or New Zealand earn much more for doing much the same job as their peers in the UK, British v-cs should receive this much higher rate. Rather, it is meant to provide an incentive to these lowly paid UK vice-chancellors to go abroad.

Shackleton’s article also ignores another crucial point, which the BBC case highlights only too well. UK universities and the BBC are public-sector services. We do not expect public-sector organisations to pay their star performers millions of pounds a year because they are “worth it” or because they could get the same or better if they went elsewhere; we expect people who work in the public sector to have a commitment to public service and to accept that they will earn less than the market rate because their salary does not come from the profits of a private company. There are no profits in the public sector, and that is why the pay of the heads of public-sector service cannot be compared to that of the pay of for-profit organisations.

If all public-sector employment were capped at a maximum of, say, £100,000 a year – more than most professors earn and nearly four times as much as the average salary in the UK in 2016 – then we would soon see who had a genuine commitment to public service and who was only in it for the money.

Kenneth Smith
Reader in criminology and sociology
Bucks New University

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