Tenured Employment--Posner

Most Americans employed in the private sector do not have any job protection. They are what are known as "employees at will." They can quit or be fired at any time for any reason other than a reason forbidden by law, such as race. Unionized workers (now a very small percentage of the private-sector work force) have some job protection; they can be laid off if their employer experiences a fall in demand and therefore doesn’t need as many workers, but they can be fired only "for cause," normally some form of deficient job performance. In the public sector, most employees below the top political level have extensive job protection (including teachers), except in the military and other national-security employment, such as the CIA. Generally, civil employees of the government can be discharged only for cause, which often is very difficult to prove. The Supreme Court has largely abolished, in the name of free speech, the "spoils" system whereby state and local government jobs were given to the political supporters of the party in power. Federal judges can be removed (barring physical or mental disability) only by the cumbersome process of impeachment by the House of Representatives and conviction by the Senate. An important category of job-protected workers that bridges the public and private divide is tenured professors, who cannot be fired without cause. Finally, in Europe most workers have far more extensive job protections than American workers do. The question I wish to address is whether this pattern makes any economic sense. One way to pose the question is to ask why--since employment at will is the cheapest form of employment contract--aren't all employees employees at will? In the otherwise dissimilar cases of unionized workers and public employees protected by the Supreme Court’s interpretation of the First Amendment against political firing, tenure (employment protection) is imposed from the outside. Employers would like greater flexibility, but outsiders--unions or judges--impose tenure for their own reasons. Unions worry that without tenure protection, employers will pick off the union's supporters; the Supreme Court worries that without tenure protection public employees will be afraid to express political views opposed to those of their superiors, and so freedom of expression will be curtailed. But surely the curtailment would be slight, since few public employees will engage in public disagreement with their superiors even if they can't be disciplined for doing so. Moreover, there is a tradeoff between professional competence and personal loyalty. A slightly less able employee who is loyal to his superiors because of political compatibility or even nepotism will work more harmoniously with them, and the reduction in friction may offset a (modest) competence deficit. Tenure is an efficient system in what organizational economists call a "high commitment" workplace. Contrast two types of enterprise. In one, the contribution of the individual employee to the enterprise’s output is readily measured. Ordinarily this will be a business firm. Revenues, costs, and ultimately profits provide objective measures of performance. The individual employee's contribution to those measures may be more difficult to measure, especially when employees work in teams. But reasonable estimates are usually possible--employees and their superiors negotiate reasonable goals for the coming year relating to sales, markups, and cost reductions and progress toward those goals is measured throughout the year. Employees can therefore be paid a salary or wage that approximates their marginal product. With their productivity continuously measurable, there is no need for job protection. Or so it seems; for even in a firm, there may be some benefits to providing a degree of job protection. Suppose employees are in a position where by sharing their know-how they could increase the productivity of other employees. They may be reluctant to do this if they fear losing their jobs because they have helped the other employees become more productive than they. Some firms deal with this problem by making an employee's annual bonus depend not only on his own contribution but also on the overall performance of the firm that year. This is a more flexible method than giving workers tenure. The sharing problem is sometimes offered as an argument for how unionization might actually increase productivity. But it is a weak argument. If tenure is an efficient employment contract, employers will institute it without union prodding. The steep decline of unionization in the private sector is a convincing "Darwinian" refutation of the argument one used to hear that unions actually promote efficiency. Although performance measures are generally most feasible for business firms, some governmental or other noncommercial activities lend themselves to such measures. Criminal-investigation agencies such as the FBI provide good examples. An FBI agent can be evaluated by the number of arrests he makes weighted by convictions (arrests that do not lead to convictions are not productive), with the convictions in turn weighted by the length of the sentence and the value of any property recovered as a result of the prosecution. Note that the measure here, as in a firm, is not a simple quantitative measure of contribution to output, but rather is a value measure. In activities (some of which may be team production within business firms) in which performance measures are infeasible, usually because either the value of output or the employee's contribution to that output cannot be quantified, other methods of employee motivation than performance-based compensation must be sought. The "high commitment" workplace is a recognition that, fortunately, employees have other motivations for working productively besides the hope of salary increments, such as identification with the goals of the employer, as when judges and (other) civil servants internalize a "public service" ethic that induces them to work productively for a modest wage with limited hope of advancement. Tenure in such a setting both encourages sharing and discourages "influence activities," a term organizational economists use to refer to the kind of jockeying for position that occurs in the workplace when the absence of objective performance measures opens the door to worker competition based on personality, connections, and intrigue. Even in a high-commitment environment, additional motivation may be provided by a tournament-style promotion system. Even if an employee's output cannot be measured with any precision, it may be possible to identify the best employee because the gap between his contribution and that of the next best may be large enough to be perceived without being quantifiable. Promoting the best employee to the next rank is therefore a method of incentivizing employees to do their best. Both judicial and academic tenure are defended as needed to encourage independent thought and prevent political retaliation for unpopular views. This rationale is more persuasive in these contexts than in that of ordinary public employees, but it is not very satisfactory. In most nations, including nations that we consider our peers, the judiciary is insulated from political pressures but the judicial career is much like that of other employees. Judges start at the bottom rung of the judiciary when they are appointed and work their way up by impressing their superiors. The U.S. federal judicial system (also the British judiciary, and that of the other former British possessions) is unusual in being a system of lateral appointments (from practice or the academy, generally) with very limited promotion. The difference may be due to the fact that the Anglo-American and especially the U.S. legal system gives much more discretionary authority to judges than other foreign systems do, so that identifying the "best" for promotion is difficult and even arbitrary. I do not think tenure makes a great deal of sense any longer in the academic setting, and I expect to see it gradually abandoned. (It has already been abandoned in England, for example.) If a university wishes to offer its faculty protection against political retaliation for unpopular views, it can do that by writing into the employment contract that politics is an impermissible ground for termination. Tenure is no longer needed because of an absence of performance measures. These measures exist in abundance. Quality of teaching is readily measurable by student evaluations, provided care is taken to prevent teachers from courting popularity by easy grading and light assignments and student evaluations are supplemented by faculty observation of the classroom. Quality of research is readily measurable by grants, prizes, and above all by citations to the professor’s scholarly publications, weighted by the quality of the journal in which the citations appear. In some fields, such as mathematics, there is generally a significant falling off in academic output at a young age, and there is fear that without tenure these faculty would be turned out to pasture long before retirement age. But this is no different from the situation in professional sports, modeling, and other youthful occupations, where it is handled by an alteration in the wage profile. If a career in mathematics entails a sharp fall-off in market wages after, say, age 40, the academic market will compensate by offering disproportionately high wages to young mathematicians; otherwise, talented mathematicians will choose professions, such as economics, in which math skills are valued but productivity does not decline steeply with age. One reason for the superior productivity of U.S. compared to European workers is that tenure encourages lazinesss by reducing the cost of laziness to the worker. But that is not the principal problem. Tenure removes the stick but not necessarily the carrot. More productive professors can be paid more and, even if their university has a lock-step compensation system, can obtain prestige and outside income by outstanding performance. The greater cost of tenure is simply in forcing retention of inferior employees. The 80-year-old mathematician may be working hard, but he may be incapable of achieving the output of the 25-year-old mathematician who would take his place were it not for tenure. Note how governmental prohibition of compulsory retirement at a fixed age aggravates the inefficiency of tenure--and is no doubt contributing to its eventual abandonment. Perhaps the strongest argument for academic tenure is that without it academics would be reluctant to undertake promising projects with a high risk of failure. But the situation is no different in "knowledge" firms such as software and pharmaceutical-drug producers, which encourage their scientists to undertake high-risk projects--and do not think it necessary to offer tenure. If most good new ideas are produced by young academics, then an institution that raises the average age of faculty, namely tenure, seems likely to reduce academic productivity. An interesting empirical project, therefore, would be to study the effect of England's abolition of tenure on the average age and productivity of English university faculties.

Comments

[Dan]

One thing that has not been mentioned is that, from a societal benefit standpoint, the location of individual research is unimportant as long as the results are published.

What concerns me about Judge Posner's thesis is that treatment of the historical dimension is missing. A practice whose utility fluctuates with periods of greater or lesser political upheaval should not necessarily be evaluated on the basis of a single historical "snapshot."

Also, related to the historical idea, the value of research is not necessarily easily measured because recognition of value and acceptance of new approaches by a larger research community is often not immediate. Alfred Wegener's Plate Tectonics theory is a famous example of delayed academic acceptance.

But if the emphasis is on teaching ability rather than research ability, since the metrics of good job performance are so much easier to establish, Judge Posner's argument against tenure protection seems much stronger.

[anon]

Tenure is probably not a good idea. If we cleaned out the administration at the Kellogg School of Management and got new slate of people, it might help the economic malaise in the state of Illinois. We should ship the current cast of great yet ineffective people to a less-sophisticated state.

[Wes]

Einstein is IMHO a poor example of academic-tenure-as-enablerWhile I agree that Einstein may have been a poor example, he was intended as an example of an how long term employment of someone like Einstein is beneficial to the long term reputation of the university.A few months ago I attended a presentation where a community college administrator said that his college was transitioning from a "sage on the stage" to a "guide on the side" model of teaching - that is, a model where the course content would be purchased from some corporation and the faculty members would merely administer the course website, click through PowerPoint presentations provided by the corporation and administer tests provided by the corporation.In the future, academics may either have to choose between working for the corporations that provide academic content or doing government funded research.

[ben]

Why should we care what a federal judge with one of the world's cushiest retirement plans and a lifetime of tenured positions says about job security. Has Posner EVER been laid off? Is he renouncing his tenure or his retirement plan? (He could, job security has helped him to get rich)

Argumentum ad hominem. Try attacking the argument.

[Arun Khanna]

Wes said: "Suppose, for example, that a university hiring committee is looking to recruit someone to their faculty who is (already) at the top of their field - for example, they've won a couple Nobel prizes."
Fredrick Sanger is the only living person who has won two Nobel prizes and he retired in 1985. The three others who have won two Nobel prizes are dead: John Bardeen died in 1991, Marie Curie died in 1934, Linus Pauling died in 1994.

[Wes]

Fredrick Sanger is the only living person who has won two Nobel prizes and he retired in 1985.Clearly this is the result of academic tenure: once someone has demonstrated that they are capable of winning one Nobel prize then any failure to win subsequent Nobel prizes is clearly the result of academic tenure induced laziness.

[ben]

I don't want to think of it in terms of opportunity costs. If all the elevator mechanics are unionized, then the value of the elevator repair is set at the value of the union contract. The elevator in Macy's has to work!

They don't have to work because the value they add is finite. In the example, their value is $1. It is only in Macy's interest to fix them if the cost of repair less than that.

Profits at Macy's go either to management and shareholders, or to employees. The argument is about what share goes where.

This is completely incorrect. If wages are forced above the productivity of some individuals then Macy's, a profit seeker, will not hire those workers. Quite apart from whether you think this is heartless, etc, it is a matter of basic logic. Please get an argument.

The proper economic question is, is there a deficiency in the bargaining process that makes it necessary for employees to join together in order to be on an equal footing with Macy's. Can Macy's fire people when they ask for a cost of living increase and scare everyone so much that they eventually drive wages down to $5.15 an hour? Yes.

Quite obviously, no. Are you saying workers at Macy's have no other work options? Not at the any of hundreds of other shops, not in another service industry, not by going back to school? Get real. True, Macy's is bigger than individuals, but it has absolutely no power to coerce individuals to select them as employers over any of thousands of alternatives. Macy's, in most if not all instances, is obviously a price taker in the labor market. Your premise is flatly wrong. Please get an argument.

[Richard Mason]

Academic tenure may have perverse results in removing the incentive for continued performance. On the other hand, it is surely no more perverse than the golden parachutes, and munificent bonuses weakly related to performance, which senior management arrange for themselves in other organizations.

Which leads to the thought: Why do capable individuals accept lower-paying jobs in academia in the first place? Because of a sense of prestige (Ph.D.'s, and perhaps J.D.'s and M.D.'s too, often being inculcated with the belief that the smartest will continue in academia, while the rest are washed out and do something else). Because of a belief that they will have more freedom and control of their own work than in a business organization. Because of a desire to remain in the stimulating environment of a university campus.

These intangibles-- prestige, freedom, environment-- offer psychic compensation which partially substitutes for monetary income and persuades some to be professors when they could make more money doing something else.

Now, as a successful corporate executive enters the end-stage of his career, he naturally secures the most pleasant retirement that he can. Having been compensated primarily with money throughout his career, he arranges a golden parachute consisting of more money.

But what about an academic? His revealed preferences are less for monetary compensation and more for intangibles. His ideal retirement package would contain the prestige of continued association with a university, the freedom to continue to work on what interests him, an office on campus and the chance to continue to interact with all that the campus offers. In short, he still wants to be a professor when he retires. His preferred parachute is to stay on the plane.

So, the use of tenure as a job compensation for academics may be of a piece with the other forms of compensation that an academic is offered even in the earlier stages of his career.

[David]

The irony here is that Judge Posner is the poster child for why his theory is wrong. Life tenure has not made him "lazy" or unproductive, and without tenure, it is unlikely that he would feel free to say many of the things that he says. While, of course, Judge Posner is an exceptional person, there are many, many other tenured workers who are highly productive. I would hazard a guess that tenured professors, for instance, are no more "lazy," across the board, than nontenured workers in other professions, many of whom spend their days schmoozing or surfing the web.

Some of the theories that Judge Posner proposes would create a rather Hobbesian world. But Judge Posner's life choices prove that he has no desire to live in such a world. This, to me, speaks volumes. Perhaps this is an unfair argument -- it is not necessarily hypocritical for a libertarian to work for the government -- but I thought it is worth noting. I would be intrigued to hear his response.

[Barry]

Why is tenure granted by custom in most concerns, as Becker observes. For employers, there may be economic reasons for granting tenureóimagine a list hereóbut fairness is likely the prime motivator. My experience has always been that managers bend over backwards to treat workers fairly. Even when you are certain that firing someone is justified, it is lump in the throat, heart-poundingly difficult to do, and as a mentor of mine with a reputation for toughness once told me ìIf it ever gets easy, thereís something wrong with you.î
Economic libertarians are often quick to get into bed with the wingnuts who wring their hands over things like ìBrokeback Mountainî getting too much press, but the coarsening of culture I worry more about is when economic analysis such as presented in this blog goes beyond analyzing and exploring the nuances of policy to advocating a point-of-view that undermines such common decency.
Fairness is hard to measure, of course, but the moral justification of laissez-faireóas we all know--is fairness: the invisible hand accretes utility as rational self-interested parties make decisions in the market place, each to further their own happiness. (Efficiency and wealth creation may be indicators of increasing utility, but they are not strict proxies.)
Posnerís preference for the operation of the ëinvisible handí is clear.
ìEmployers would like greater flexibility, but outsiders--unions or judges--impose tenure for their own reasons.î
ëSelfishí reasons, I might add.

Tenure is codified in workplaces where workers have relatively more say in the contract process than average, where they have an opportunity to express their preferences for contract terms. Unions shops and college faculties have a seat at the table and can negotiate term. For most workers, employers dictate the terms, or negotiate them one-by-one.
Are unions exercising a special privilege? To Posner, it seems so.
In Posnerís universe, the union gets between the employer, the corporation, and the employee, the worker. The union is an outsider, an interloper, a meddler, not the workerís representative in a bargaining process. Similarly, judges are outsiders either deciding based on ëwhat they had for lunchí or applying ill-conceived ëlawsí designed by other ëoutsidersí such as our representatives; judges are not seen as enforcing rights and terms of employment agreed upon by the people.
It would be odd, indeed, to privilege the choices made by the ëinvisible handí over the express wishes of individuals through their bargaining agents and their governments, but perhaps we know better what is in our best interests when we let others do our thinking for us?

[Corey]

"Argumentum ad hominem."

What, you don't think it is at all possible
that someone who has spent nearly their entire working life under tenure might underestimate the negative intangibles of living without it?

"In the example, their value is $1."

You missed the point. Whoever sets the value at $1 predetermines the outcome of the example. What if collective bargaining forces Macy's to either cut profits and pay $6 or not have elevators? Is that an inefficiency of unions or was Macy's stupid for installing elevators that didn't add enough value to pay a living wage for their upkeep. Does society need jobs that add less value than it takes to maintain an individual worker? No. Should companies be able to pay less and rely on public welfare to make up the difference? I take it since part of that comes out of your pocket you might think no.

"If wages are forced above the productivity of some individuals then Macy's, a profit seeker, will not hire those workers."

What does productivity mean? Can Macy's whip its employees to make them more productive? If Macy's puts a gun to their head and they agree to work for 10 cents an hour, did they just get more productive under the definition you are using?

Let me ask a different question. Now that airlines have beaten unions and dropped pilot wages from over $100K to sometimes less than $40K, do you feel safer in the air? Think about the amount and quality of pilot training that someone wishing to enter the field will rationally choose at each of those salary levels. Maybe there are other values (safety and professionalism) besides raw profit that influence our idea of what pilots should get paid.

"Macy's, in most if not all instances, is obviously a price taker in the labor market."

Oh, I'm so glad it is obvious to you. I imagine you work retail a lot. But yeah, you are probably right, they could go to Walmart, I hear they pay an excellent wage. I'm sure their kids won't starve as they go back to school. They can just eat cake at the many thousands of alternatives for free day care.

"Please get an argument."

Please open your eyes. The world prior to wage, hour, and tenure protections was hell on workers, even in the growing market economy of the 1880s or 1910s. Workers are rational too, if they had an alternative to working for $6 without health insurance they would take it.

[HL]

Civil servants, especially in California, have morphed into a species of super-citizens with super job security, super pensions, super healthcare, and super salaries. Over time these luxuries are propelled ever upward by a one-way ratchet forbidden by law to slip back a notch.

The more super the benefits, the more super the interest in maintaining them. This creates a form of positive feedback that can get out of hand, especially when civil servants use their positions and paychecks to influence elections and benefits. Look at the finances of San Diego.

One equitable solution to this conflict of interest between voting for good government and wanting a very comfortable and secure job would be for civil servants to forfeit the right to vote in any election at the level of government where their salaries and other job benefits are determined. Federal employees would not be allowed to vote in Federal elections, state employees would not be allowed to vote in state elections and local employees would not be allowed to vote in local elections. Nor would such employees be allowed to contribute to political candidates for these elections.

This idea could be extended to any citizen who receives a check from any level of government. If you accept a government paycheck, Social Security, Medicaid, Medicare, or a farm or other business subsidy, you should forfeit your right to exercise your conflict of interest by voting for or contributing to those who determine those benefactions.

Election recusal would be a common sense bit of fairness that is already in operation in several governmental situations. Judges recuse themselves from cases where their personal financial interests are at stake. In many local governments the local representatives are supposed to recuse themselves from voting on issues where they have a personal or financial stake. A recusal from the politics of their paycheck would be a small price for civil servants to pay for the benefits that they receive.

[Ibrahim Lodhi]

Articles4Free.Com - Submit Articles4Free
http://www.articles4free.com

BlogsBasket.Com - Create Unlimited Blogs
http://www.blogsbasket.com

Ismaili-Net.Com - 21st Century Forum for Ismaili Friends.
http://www.ismaili-net.com

MrPakistan.Net - Online Maketing Solution Provider
http://www.mrpakistan.net

Text2Read.Com - Read the Information in Texture
http://www.text2read.com

[Steve]

I appreciate that there might be economic arguments against tenure, but the following is not one of them:
"Tenure is no longer needed because of an absence of performance measures. These measures exist in abundance. Quality of teaching is readily measurable by student evaluations, provided care is taken to prevent teachers from courting popularity by easy grading and light assignments and student evaluations are supplemented by faculty observation of the classroom. "
It is styled as an economic argument, but it is a sentimental argument (largely an appeal to pathos). It depends upon the arguable claim that all students and faculty are capable of fair and elightened evaluation. Evaluative measures may indeed exist, but they are neither abundant nor clear. Student evaluations are corrupted from the start by virtue of a false premise, i.e., that a student knows enough to assess whether his teacher taught him correctly. This calculus is marred by a category error (all students are equivalent consumers of data), and unqualified by perfomance. With respect to the latter, should evaluations by A-students be given more weight than those by C-students? After all, don't grades also assess a capacity for good judgment? Should learning disabilities disqualify students from evaluating professors? Student evaluation is fraught with contradiction arising in part from imposing a consumer model on paideia.
Furthermore, who decides what is a "light assignment"?Determining vague categories like light assignments and "easy grading" would require a highly intrusive public apparatus, a mathematical valuation of all human knowledge to accord with an economic model (so many data of so much value, etc.), and an equivocation of education and vocation.
To give responsibility to "other faculty" for evaluation ignores the fact that faculty are not equivalent units of data production. An expertise in harmonic number theory does not qualify one to assess a music teacher. Will faculty only be assessed by peers, and to what degree of graininess will "peer" be decided. Who decides? (The passive voice can hide a great deal of government!) Neither is production capable of easy assessment. One short article may be worth more than twenty banal books. Who gauges worth versus quantity? Will we have a court of enlightened CEOs determining the relative worth of an article about Augustine's notion of caritas versus a best-selling book on Harry Potter web sites?
Yes, there are bad teachers wedged into tenured posts. But market utopianism won't move them. As "ben" points out above, unions and tenure, whatever their obvious downsides, also provide incentives to teachers--to good teachers as well as to bad. Save tenure, what other incentives will draw the best and the brightest to teach? N. E. Hatfield has this right in his comments. As a conservative and a faculty union member, I've yet to be convinced that I should abandon my economic interests for the sake of a sentimental, utopian vision of an unregulated education market.

[Anonymous]

Thanks again, here

[Anonymous]

Great website! I add this site to my bookmarks! Thanks for webmaster!

[Anonymous]

Thank you, you always get to all new and used it
ÿ¥ÿßÿ™

دردشه

[Anonymous]

thanks to tell me that,i think thats so usefully----
tiffanys
links of london

[Anonymous]

a great post,thanks for shareing-----
ed hardy
tiffany uk

[Anonymous]

دردشة برق

دردشة الخليج

[Anonymous]

شات الشلة

دردشة تعب قلبي

[Anonymous]

شات حبي

شات الحب

[Anonymous]

ÿ¥ÿßÿ™ ÿØŸÑÿπ

شات الود

[Anonymous]

tiffany jewellery
tiffany jewellery

[Anonymous]

tiffany jewellery
abercrombie and fitch