You might think, given their role in our continuing national nightmare, that woolly-headed economists would be a little bit circumspect when it comes to making pronouncements that affect people’s livelihoods. Not Brian Lucey. In a recent blog post he purports to evaluate Morgan Kelly’s claim that “senior civil servants like [Kelly] continue to enjoy salaries twice as much as our European counterparts.”
Kelly is apparently confused about who is and isn’t a civil servant (professors are not), but that is but the tip of the iceberg when it comes to misinformation about such matters. Nevertheless the claim about his salary seems worthy of public outrage. Lucey, seizing the moment, decides a little half-arsed unscientific investigation is called for. He looks up a handful of job advertisements looking for “professors” and makes three comparisons with the top of the Irish professorial salary scale. One comparison is to Coventry, another is to Hull and the third is to an entity that calls itself Reutlingen “University.” Investigation of the latter website, indicates it is nothing more than some glorified technical institute, with programmes in Applied Chemistry, Business, Computer Science, Technology, and Textiles and Design and nothing else. In other words, not a university at all. He then concludes on the basis of this sample as follows:
Ireland? http://www.ucd.ie/hr/pay/ gives information on the pay scales for UCD academics. The top of the professorial salary is €138,655. That’s 1.7 times Coventry, 2.95 times the German, and 2.3 times that of Hull.
Ah, yes, another of these “where to begin” moments. Let’s begin with the job at the German technical school. Never mind the obvious question (“in what way is this comparable to an academic job in a university rather than at, say, Griffith College?”). There’s also the obvious terminological question that Lucey, in all his wisdom about international comparisons, seems not even to recognise: not all “professors” are what we call “professors.” In the US, all academics are professors. Although “Professor” in Germany is roughly equivalent to our “Professor,” it is by no means clear that this is the case in the prestigious “Reutlingen University” which is advertising for a “Professor” with 5 years’ experience. Lucey, of course, could’ve left it out but that would mean excluding a full third of his sample! And the most inflammatory case of all! Imagine: the very top of the professorial salary scale at the flagship campus of the national university in Ireland is 2.95 times the salary offered at a technical school to a “professor” with 5 years’ of experience. What an outrage.
It bears pointing out that both Morgan Kelly and Brian Lucey are professors and earning those big salaries. And it makes them look good as they selflessly insist that they are overpaid. However, where Lucey goes too far is in insisting that this somehow justifies a claim about “academic salaries” in general.
Lucey’s modus operandi in this case has about as much validity as asking three random punters in the street what they think and then drawing general conclusions about whole classes of people on that basis. Fortunately, there is some actual research out there on these matters, so we don’t have to rely on statistics Brian Lucey pulls out of his arse. For example, an April 2007 study published by the European Commission Research Directorate-General entitled Remuneration of Researchers in the Public and Private Sectors.
Like most studies comparing remuneration across borders and currencies and unlike Brian Lucey, Morgan Kelly or the occasional inflammatory article in the Sunday Independent, the European Commission study is at great pains to determine what salaries are, not in terms of meaningless headline numbers but in terms of purchasing power. The reasons should be obvious. That an economist (and a professor!) needs to have it spelled out to him, well, draw your own conclusions. So let me spell it out:
1) There is a worldwide market for academics and researchers;
2) Academics tend to be reasonably smart and, unlike the average Sindo reader or Brian Lucey, are not simply attracted to big flashing numbers. If they were, they’d all be heading to Japan, where an average academic can earn (cue Dr. Evil voice): eight million yen per annum. Even if we’re converting into the same currency, what matters is not how much of it we earn but what standard of living it allows us to have. Academics are not going to flock to a place that pays high nominal salaries if the cost of living makes the proposition less attractive than a place paying lower salaries with a much lower cost of living.
The means for making such determinations are varied. The Economist uses their notorious “Big Mac Index.” Organizations like the OECD and the European Commission use things called Purchasing Power Parities. Brian Lucey uses . . . nothing. He thinks that it is meaningful to compare salaries in the UK and Ireland just by converting the salaries in pounds sterling into euro and then mime a shocked expression by bugging out his eyes and letting his jaw fall to the floor Macaulay-Culkin-Home-Alone style. It doesn’t matter to him, of course, that the euro is close to all-time highs against the pound. He’s not after the truth, he’s interested in making himself seem heroically selfless. If the euro were at 30p, he’d find some other country to make comparisons with because suddenly it’s the British salaries that would look outrageous without anything having changed in the two countries or the standards of living of academics in them other than the exchange rate.
So what does the EC study find? If you look at just the average researcher salaries in the EU countries covered by the study (the EU 25 plus associated countries), Ireland does indeed look high, with only Austria, Denmark, Luxembourg and Switzerland paying higher average salaries (table, p. 43).
What about if we standardise using purchasing power parities? Ooh, here’s a revelation. The average researcher salary in Ireland, when salaries are adjusted to take into account purchasing power is lower than the average salaries in: Austria, Belgium, Cyprus, Germany, Israel, Luxembourg, Netherlands, Switzerland and the UK (table 10, p. 46). Hardly the outrage we’d been conditioned to expect, eh? Not 1.7 or 2.3 times the salary in the UK. Less than. As in: not more than. Not 2.95 times the salary in Germany. Less than.
Ah, hang on, I hear you saying: those figures are for all sorts of researchers, private sector and public sector alike, including some in business environments. Table 14, however, on p. 49 gives you the comparative salaries using PPPs in the Higher Education Sector:
Notice that average salaries in Irish universities, adjusted for purchasing power, are lower than the salaries in: Austria, Belgium, Cyprus, Czech Republic, Denmark, France, Germany, Israel, Luxembourg, Netherlands, Norway, Sweden, Switzerland and the UK. It would appear that the comparisons in the previous tables were skewed upwards by the enormous salaries paid to private-sector researchers in Ireland. But you won’t read about that in the Sunday Independent or on Brian Lucey’s blog.
What these statistics reveal is that what Brian Lucey and Morgan Kelly are doing in this instance is insisting that Irish academics (and other public servants) and only Irish academics (and other public servants) pay for the fact that Ireland is an expensive place in which to live. It’s almost embarrassing to have to point this out to an economist. As for the private-sector researchers who make even more money, they are not a problem because they are subject to the discipline of the infallible market (and we see how well that sort of thinking worked out for us).
Bear in mind, the EC survey was carried out in 2006 and 2007, before the entirety of the Irish public sector had two successive rounds of pay cuts imposed on it. In the case of academics, those two pay cuts reduced pay by somewhere in the region of 20%. Well-paid professors like Brian Lucey and Morgan Kelly no doubt took pay cuts in the region of 25%. It was false to claim in 2007 that Irish academics were overpaid by international standards. It is no doubt more falserer now, no matter what kind of figures Brian Lucey jots down on his cocktail napkin on the way out of the pub.
Ireland is an expensive place to live. Nevertheless, the nation needs to be able to attract academics here from abroad, for the simple reason that the country does not produce enough quality PhDs and never will. Indeed, many of the best Irish PhDs did their postgraduate work abroad and returned. If Ireland does not offer a competitive standard of living to such people, it will be unable to compete and be left with nothing but third-rate bloviators of a kind far too much in evidence in the press and on the internet.
P. S. Baby-faced killaz in the house!: