A Dour Look at Your New Year’s Resolution to Save Money

A higher ed group that I love dearly recently started a conversation about little ways to save money. Folks shared a range of tips (packing your own lunch and not drinking expensive coffee were favorites) that people were already using to save money. Here is the thing about lunches out and lattes, though: You can pack lunch every day of the week this year to save money, but next year there are no more days of the week to pack them. You can never drink a latte this year, but you can’t drink any less of them next year. As long as increases in your earnings aren’t outpacing the increase in cost of living–which is reality for the vast majority of Americans, including lots of “middle class” folks, whose lives cost about 30% more than they did 20 years ago–you’re eventually going to hit a wall with what you can sacrifice. You can only not go on so many vacations, have so many non-existent gym memberships, not subscribe to so many cable channels, not eat out so much, before you are left with a bare bones budget that still won’t cover childcare, health care, higher ed, and housing, which are far more significant costs than a rise in, say, a gallon of milk. Then you are faced with this reality: many of us don’t earn enough money to be–or to feel–financially secure.

I want to look just narrowly at one category of people: early and mid-career college professors. (Why? ‘Cause I’m one of them.) I also recognize that many people are already surviving–and dying–on a bare bones budget, including an increasing number of whites, whose racial privilege has long kept them alive, even in poverty, longer than poor people of color. For those people, picking up an additional (additional additional) job may be impossible, and there is simply nothing left to cut from the family budget. For the many people with PhDs who use food stamps and campus food pantries and for university employees who use services like Arkansas’ State’s Santa’s Wolves (a Christmas giving program that allows A-State employees to donate gifts to A-State employees who can’t afford them because the pay for so many employees, especially women in secretarial positions, is so low), the advice to cut back on the number of costly after-school activities your kids are in or buy in bulk is similarly frustrating. And, yes, this is absolutely a topic that must be discussion in conjunction with conversations about gender, social class, and race in higher ed.

That said…

In 1996, I left for college, the first in my family to go. That year, my mother, who had been working in a unionized, pink collar job with the telephone company, for about 6 years at that point, earned $36,000 for full-time, year-round work to support herself and three kids. Given that she did not have a college degree and hadn’t been in the professional workforce for that long, her salary wasn’t bad. Fastforward to 2015–just last year. I had had a PhD for 5 years and had been teaching full-time in my chosen profession for 10. With a millstone of student loan debt around my neck and three kids (and, thankfully, a husband), I was earning, for full-time work….$36,000.

Obviously, two data points don’t tell us much, so here’s a few more: Most college teaching is done by adjuncts, whose employment is never guaranteed and whose wages are immorally low. But for many of us who “make it” into full-time work (that $36,000 wasn’t for a tenure track job but a Visiting Assistant Professor gig), the money is still not fantastic. Starting salaries for TT folks in my department are $51,000–below the national average of $56,341 for a new assistant TT (The argument that Arkansas, where I am a prof, is cheaper than other places only goes so far. Yes, rent is less than in San Francisco or NYC or even Salt Lake or Santa Fe, but my grad school debt is the same wherever I live). That’s nothing to scoff at, but it’s also nothing to brag about, given that getting the job requires at least 5 years (and, on average, just over 8, which means that there are lots of folks spending an entire decade pursuing a degree) and lots of debt–about 40% of the nation’s total higher ed debt and nearly $60,000 for borrowers in the 50th percentile (recognizing that there is a huge range, especially when law and med students are included). These are years of lost earnings, including lost contributions to retirement and social security accounts.

Even in the increasingly unlikely best case scenario–you skipped the distractions of marriage and childbearing (but you’ve always been exceptional, right? So you’ll definitely be able to have a baby at an older age, despite lots of evidence that your fertility is dropping quickly as you wrap up grad school.)–in order to earn your degree at 33, with “just” $35,000 of debt and land a tenure track job that is going to require you to fly half a continent away any time you want to visit your family. And you get that $56,341 average salary. Yay! You are probably (depending on where you live) right in the middle of the American income distribution. (Check out Pew’s calculator to see exactly where you fit.)

Here’s the thing: That’s still not enough to comfortably support a family of four. In almost every state, you’ll not be earning enough to live an “adequate but modest” standard of living, which the Economic Policy Institute reports is, on average, $63,741. (If you earn that in Des Moines, Iowa, you are earning just what you need to cover your bills.)

In short: a beginning professor’s salary, which starts years later than her non-academic peers’ and at much greater cost, is not enough to support a family of four. The message from high ed could not be clearer: do not marry and do not have children. If you do marry, marry someone with higher earning potential than you (though you are a washout if, consequently, you follow his career path rather than yours) and, ideally, less debt so you aren’t waiting around for your doctor husband to pay back his massive med school debt. If you do marry, make sure it’s someone who can always work; illness or disability are not possible. If you do have kids, make sure that they are healthy, because there is not room in this model for daycare, must less significant medical care.

capitalism

Above, street art expressing the truth that capitalism is what ails you. The image is of a woman’s; the words say “Dear Capitalism, It’s not you. It’s me. Just kidding. It’s you. It’s over!”

You can never drink a latte again. You can sign your kids up for sports through the Y rather than the private club team. You can skip kids’ sports and violin lessons and summer camp entirely. But salaries for early academics–people often in their mid-late 30s and 40s–are nowhere near the salary needed by most folks to experience a day-to-day sense of emotional well-being (probably around $83,000 for a family of 2.58–which describes no one). Of course, this varies by state and city and number of children, and we need to recognize that health costs are going to be very, very high for a minority of folks. Additionally, we can probably expect debt (which former grad students have a lot of) to influence the exact amount we need. But it’s safe to say that if you are married with more than .58 of a child and went to grad school, $83,000 isn’t going to be a salary you are seeing for a number of years–until you hit full professor (and by then the assistant profs reading this now will find that the number has risen again, probably faster than the salary of a full prof). So if you have kids, you are going to need a working spouse–one whose job pays more than yours but is also less demanding and can be performed anywhere in the country you get that one TT offer all your dreams depend on.

All of this doesn’t mean you shouldn’t try to save money, especially when saving money also means you are wasting less. There are all kinds of great reasons, beyond money, why you should bike to work (exercise, pollution) or pack your own lunch (40% of food is wasted in the US, so pack your leftovers). And almost everyone with a near-decent salary should be encouraged to spend it (or save it) in ways that better reflect their desires and values. (This is the premise of my favorite money book, Your Money or Your Life.) So cut out lattes or skip the nail salon or cut cable of those things aren’t worth it to you. There is also tremendous satisfaction in feeling in control of your own money, of making choices about where it goes rather than watching helplessly as it slips away. (On the other hand, adopting a “miserly spending style toward self and others” can also be a problem, according to the APA.) Taking better control, though, might also mean facing the recognition that assistant professors’ salaries are not accurate reflections of the training they undergo to do their job, are not commensurate with the value of their work, and are not enough, on their own, to allow a family to live a comfortable middle-class lifestyle. 

If your New Year’s resolutions involve saving your money or budgeting, keep these challenges in mind. There are reasons why money management is so painful that so many people avoid it. Sometimes, we can make all the “right” choices–getting an education, pursuing the noble calling of teaching, delaying marriage and childbearing, and working our tails off–and still not have enough to enjoy economic stability. In fact, the economics of higher ed nearly guarantee it.

latte2

Academics: Don’t be mad about the cost of a cup of coffee (above). Be mad at the fact that kids born today will easily pay $200,000 for a four-year degree. I mean, if they can. That’s one $5 latte every day of your life, if you live to be 109. So it’s probably too late for you to give up Starbucks in order to save for your kids’ education. 

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Think I’m too bitter? This year, former A-State Chancellor Tim Hudson swindled the university out of hundreds of thousands of dollars. Even as he was being investigated for ethics violations, the university gave him a second raise for the year–totaling nearly $70,000–or $2500 raises to the university’s 28 lowest-paid employees, including many earning under $22,000. For his failure in oversight during Chancellor Hudson’s period of embezzlement, the university system president Chuck Welch was given a $10,000 raise. Meanwhile, the university evicted some of its lowest paid employees from employee housing in order to make way for for-profit dorms. But this is business as usual in higher ed: Proving that there is no upward limit to avarice, Harvard, with its 35.7 billion dollar endowment, forced cafeteria staff to go on strike for a wage increase (which will still keep them in relative poverty) even as the university won a $10 million grant to study race and poverty in Boston. Higher ed folks: it’s your board, not your lifestyle, that needs a New Year’s shakeup.

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5 comments

  1. I recommend reading: ‘Who Stole the American Dream?’ by Hedrick Smith. He essentially makes the point that businesses use to: pay a living wage, offer a secure retirement pension, and pay 100% for healthcare. But they found that with lobbyist and lots of money to Congress they could have the rules changed so the onus is put on the employees to pay for their own retirement and healthcare. As you so astutely point out “there is no upward limit to avarice.”

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