Paul Krugman on the Displaced (and Misplaced) Ressentiment of the Merely Rich
Pity the Poor Couple Who Make $450,000 Per Year (Yet Another Failure of Our 'Elite' Educational System)...

Xxxx Xxxxxxxxx's Century-Ago Predecessor: G.H.M in the Atlantic Monthly in May 1905

Hoisted from the Archives: Comment on G.H.M. (2005), "What Should College Professors Be Paid?" Atlantic Monthly (May), pp. 647-50:

The past is a different country. Even the relatively recent past of, say, a century ago is a very different country.

In 1905 "G.H.M.", an anonymous college professor, wrote a four-page article for the Atlantic Monthly in which he pleaded for more money for college professor salaries, and claimed to be vastly underpaid. The first thing to note is the relative level of professorial salaries back then: he claimed that the "average college professor’s salary"--the salary that he saw as clearly inadequate and unfairly low--"is about $2,000." Stan Lebergott's estimates in the Historical Statistics of the United States are that the average annual earnings of an employee in America in 1905 were $490 dollars if employed for the entire year--or $451 taking account of the hazards of unemployment. What G.H.M. says is the average college professor's salary is more than four times annual average earnings of the time.

Today's professors don't make such large relative salaries (except in business, law, and medical schools). In order to match turn-of-the-century college professors in terms of income relative to the national average, a professor today would have to make an academic salary of roughly $250,000--a height far above any professorial average, and one attained only by academic celebrities.[1]

The second thing to note is that our professor sees himself as a reasonable and badly underpaid man. He is not asking for what he would see as the "large salar[y], commensurate with what equal ability would bring in other lines of work ($10,000 to $50,000)"--or 20 to 100 times the then-current average level of GDP per worker, the equivalent today of between $1,100,000 and $5,500,000 a year. At 50 times average GDP per worker (roughly the mid-point of G.H.M.'s range, corresponding to a salary of $2.5 million a year), we are down to perhaps 4000 households in today’s United States (according to Piketty and Saez (2001)). That an "ordinary" professor could feel that his talents ought, in some sense, to earn such an enormous multiple of the average income is a sign of how unequal an economy and society the turn of the twentieth century U.S. was. Yet G.H.M.'s feeling of being sharply constrained by material necessity is real: as this professor goes through his budget, he expects the highly-literate and elite readers of the Atlantic Monthly to nod and agree (and we modern readers do indeed nod and agree) that his family is strapped for cash.

The first large expense G.H.M. lists is for personal services: "We must pay $25 a month for even a passable servant," and add to that $10 a month for laundry (for the regular "servants will do no laundry work") $1 a month for haircuts, and $2 a month for a gardener. Already, on personal services alone, we are up to $445 a year--the average annual earnings of a manufacturing worker in 1905.

G.H.M. offers two rationales for these large personal-service expenditures. The first is that they are necessary to keep the load of domestic work from sending his wife to an early grave. "Shall we expect our wives to bear and rear children, do all of the housework, sustain their social duties, and remain well and strong?"

The second rationale is that these expenditures are required for him to face the world without shame. For the professor, however, these expenditures on personal services are completely non-negotiable. If he doesn't spend, his household will fail to make a properly upper-middle-class impression: the lawn must be trimmed, the house dusted, the clothes cleaned, and the children washed. He has no gasoline-powered lawnmower, no electric hedge clippers, no vacuum cleaner, no dishwasher, and neither a washing machine nor a dryer. Consumer durables take the place now of what took servants' sweat (at least for college professors' households) a century ago.

G.H.M.'s food bills average $55 a month on food--enough back then to buy 170 lbs. of veal cutlets (present market value perhaps $1000), or 500 pounds of chuck roast (present value perhaps $1200), or 1000 lbs. of bread (present value perhaps $1300). Note that $55 a month works out to be $660 a year, again considerably more than a year’s average GDP per worker. G.H.M. spends more than 100% of an average worker's budget on food alone. In general it was hard to economize on food at the start of this century: food and fuel consume almost half of consumer expenditure for the average household in 1885, but only a sixth of consumer expenditure today. It is the same for G.H.M.: his food bills are roughly a quarter of his annual expenditure, while my non-restaurant food bills are less than a twelfth of mine (and I buy a lot of food at a much more advanced stage of preparation today than G.H.M. could back a century ago).

A third thing to note is the cost of (effective) medical care: $1200 to treat a single case of appendicitis. That's nearly three years' worth of an average worker's income--the same share of GDP per worker then that $160,000 would be today. Appendicitis today is a serious illness--but think what it was like before antibiotics, before laproscopy.

And a fourth thing to note is G.H.M.'s plea for culture: he and his wife's long and sophisticated education "has given us a refined appreciation of the drama, and we have a knowledge of and love of the best music. The annual football game is a social event which every loyal member of the college community is supposed to attend. We cut this out long ago. Grand opera exists for us only in the memory of our German days. Let us keep the spark alive by taking our wives once a month to a cheap concert; say $1." $12 a year--perhaps 1 1/2 percent of annual per-worker spending--to to hear perhaps 18 hours of live music played by professional musicians. And how little his family gets for it!

The overall impression to us is one of grinding poverty. And the overall feeling that G.H.M. has is of near-poverty--of being just one racing shell-length ahead of the working class, of being barely able to afford the necessities and some of the conveniences of life.

Yet according to GHM the average college professor stood in 1905 in roughly the same relative position in the distribution of income in America then as somebody in roughly the 99.5 percentile does today...

G.H.M. (1905), "What Should College Professors Be Paid?" The Atlantic Monthly 95:5 (May), pp. 647-50.

A great deal has been written of late, especially in the annual reports of college presidents, regarding the inadequacy of the compensation received by university teachers. The writer, to whom the question is one of vital importance, has seen many of these general statements, but has failed to find any which has taken up the matter in conclusive form. This he hopes to do here concisely.

Primarily the question is one of standard of living. If a grocery clerk can maintain his family in a suitable degree of decency and comfort on seventy-five dollars a month, have we a right to expect that a college instructor can do the same? The answer to this involves the demands which society makes upon the respective individuals.

To get at this point the writer analyzed the itemized household accounts which his wife has kept for the past nine years, during which time he has been connected with one of our large and wealthy universities. Two years were spent as an instructor, two as assistant professor, and the next five as associate professor.

Summing up his total expenditures for these nine years, and in like manner his salary for the same period, he finds his expenditures have been to his salary in the ratio of 2.1 to 1.

His average annual expenditure has been $2794.27.

His average salary has been $1328.15

For the privilege of teaching he has paid the difference, of $1466.12 annually, from private means.

Even the unbusinesslike professor must pause before such a state of affairs, and try to fathom the reason for this discrepancy, when his firm belief is that he is living on as low a scale of economy as is possible for him in his position.

In order to find out where the bad management might be, -- if bad management there was, -- he divided his expenditure account into thirty-one separate items, arranged in tabular form under the following heads: --

  1. Household Furnishing and Repairs.
  2. Groceries, Meat, Fruit, Vegetables, etc.
  3. Servants.
  4. Fuel.
  5. Light and Water.
  6. Gardener and Grounds.
  7. Laundry.
  8. Taxes.
  9. Life Insurance.
  10. Fire Insurance.
  11. Rent, or Interest on House and Lot.
  12. Bicycles and repairs.
    Horse, care and feed.
  13. Doctors and Dentists.
  14. Hospitals, Nurses, Drugs.
  15. Death Expenses.
  16. Legal Services.
  17. Interest on Borrowed Money, for running expenses.
  18. P.O. Box, Postage, Stationery, Telegrams, Telephone, Express, etc.
  19. Newspapers, Books, and Periodicals.
  20. Clothing, Dry Goods, Shoes, etc.
  21. Learned Societies and Social Clubs.
  22. University Gifts and Supplies.
  23. Typewriting, Printing, and Mimeographing.
  24. Children's Tuition and Pocket Money.
  25. Subscriptions and Charity.
  26. Theatre, Concerts, Athletic Sports
  27. Christmas and other Gifts.
    Entertainment of Friends.
  28. Wine, Beer, Tobacco, Candy, and other Luxuries
  29. Personal and Toilet Supplies
  30. Business and Recreation Trips, Hotels, R.R. Fare, Carfare, etc.
  31. Family Obligations, or Payment of Educational Debt.
  32. Savings, other than Life Insurance, looking toward old age.

He believes that, assuming that a college professor has the right to marry and have two or three children, there is not a single one of these items which may be omitted from a consideration of expenses to cover a period of years. The whole question, then, resolves itself into this: how much per year is it reasonable to allow for each of these items?

In the community in which he lives, with a family of two adults, two children, and one servant, at the present high prices of the necessities of life, he believes that the sums he mentions are the very least upon which his household can be conducted. And he bases this belief upon a most accurate analysis of fully itemized accounts.

Taking up the items in detail: --

1. Household furnishing and repairs. This item must cover, for a period of years, the original cost of household furniture of all descriptions. In addition, it must look after natural wear, tear, and breakage of furniture, glass, dishes, kitchen utensils, rugs, curtains, bedding, etc., as well as carpentry, plumbing, and the like. It must also provide for pictures, "works of art," and household adornments in general. Does $75 a year seem excessive for this? Say $6 a month.

2. For five persons a grocery bill of $25 per month, a meat bill of $15, milk $5, fruit, vegetables, butter and eggs, $10, or a total of $55 ($11 per person), should not seem unreasonable.

3. We must pay $25 a month for even a passable servant. Shall we expect our wives to bear and rear children, do all of the housework, sustain their social duties, and remain well and strong?

4. Kitchen, fireplace, and furnace fuel will aggregate $120 per year, or $10 a month.

5. Light and water average with us just $5 a month.

6. The labor of a gardener one day a month is $2.

7. Our laundry averages just $10 monthly. Our servants will do no laundry work.

8. An investment of $5000 in house and lot, together with personal property and poll tax, makes this $10 a month. If there were no house owned, the rent item (11) would have to be increased.

9. To protect the family of a man who is not in a position to save, $5000 life insurance is not too much. The monthly premium on this amount, assuming a twenty-payment ordinary life policy, will be $10.

10. $3000 insurance on house, and $2000 on personal property, makes $18 per year, or $1.50 a month.

11. Six per cent on $5000 invested in house and lot is $300 annually, or $25 a month. This does not provide for depreciation, maintenance, and repairs. No desirable house on the campus can be rented for less than $35.

12. Not caring to pay so large a rent, we live off the campus and use bicycles. Their depreciation and repairs average $2 a month. Keeping a horse would cost $8 a month.

13. An experience of ten years shows us that not less than $10 a month may be set down for doctors and dentists for the family. A single attack of appendicitis in ten years will take the whole of this.

14. Hospitals, nurses, and drugs average $5 a month.

15. Since the average duration of life is about forty years, in a family of four individuals one death is to be expected every ten years. this item may be set down at $2 a month.

16. Occasional notary and minor legal services average $1 a month.

17. Certain expenses, like life insurance and taxes, being payable in large amounts, necessitate loans from the bank, which are gradually repaid. This item may be set down at fifty cents monthly.

18. For a live family with connections, postage, stationery, telegrams, telephones, express, freight, cartage, and allied items, will aggregate $3 a month.

19. Newspapers, books, and periodicals. A college professor is supposed to revel in this kind of thing. Suppose we allow him $5 a month.

20. To clothe four individuals neatly and completely cannot cost less than $180 a year, can it? This is $15 a month.

21. Learned society and social club initiation fees and dues must amount to at least $2 monthly.

22. University gifts and supplies, typewriting, etc. We are constantly going into our pockeets for small items which the university will not or cannot furnish without unbearable delay; or we may be working on lines of investigation that call for outlay. Say $1 a month.

23. In our case, our children are of the kindergarten and primary school age, so this item is only $9 a month. Older colleagues, whose children have advanced to the music lesson and preparatory school age, say they must allow $50 to $60 monthly.

24. Some families belong to a church. We all have charitable instincts, we are of that class to which the call of needy or suffering humanity appeals. May we allow $2 a month?

25. Our education has given us a refined appreciation of the drama, and we have a knowledge of and love of the best music. The annual football game is a social event which every loyal member of the college community is supposed to attend. We cut this out long ago. Grand opera exists for us only in the memory of our German days. Let us keep the spark alive by taking our wives once a month to a cheap concert; say $1.

26. We have children and friends; there are birthdays and anniversaries; as well as Christmas. Is $50 a year too much? This is $4 a month. Dinners, receptions, and the like, are not for us.

27. Occasionally a man is jaded; he has a wild desire to "blow himself." May he have $1 a month pocket money, to share with his wife?

28. Most of us can shave ourselves, but we cannot cut our own hair, although we may invert a bowl over the heads of our youngsters, and trim around the edges. Here is another $1.

29. When summer comes, a teacher is pretty nearly always exhausted. His work is trying and confining. His family requires an occasional change of air. His professional needs may call for a long journey to attend an important meeting of fellow workers, etc. For an average geographical location $100 a year, or $8.50, is not too much to cover these items. For an exceptional location, like the extreme Pacific coast, this item should be trebled.

30. The writer has known many colleagues whose educational expenses had put them under obligations which they were pledged to repay. In most cases it takes ten years to wipe out these obligations. Sometimes at the end of this period not even the beginning of discharging the debt has been made. Our college professors often come from families whose means are small. The support of aged parents or other relatives may have to be borne by them in common with their brothers or sisters. Every man is apt to have some such claim on himself or his wife. To cover these items let us allow him $10 a month.

31. A few, a very few, of our colleges pay pensions to their old and worn-out teachers. In such cases perhaps there is no need for a man to lay aside something for his old age, or to make provision for his children's start in life. Perhaps he owes a duty to his children to give them as good an education and chance as he himself received. If so, he must begin to lay aside for it. Where there is no pension, should he not aim, after thirty years of faithful service, to have $10,000 laid aside? He is not in a position to know of places where he can get large returns on his small investments. Shall we allow him $250 a year to put aside (providing there are no "exceptional and unusual" expenses that year, as there always are)? Let us say $20 per month.


These are certainly not great demands. Yet, summing them up, taking the smaller of the two when two sums are mentioned, we have $262.50 monthly, or $3150 per year. Let us talk no more of bad management, -- we and our wives face an impossible problem.


If this seems extravagant to those who have to determine upon the proper minimum compensation for a man of long training, education, and refinement, we must ask them to look over these items carefully, one by one, and put down what they think a fair sum for each item for a family of the college professor's social status. Then let them foot up the total. The average college professor's salary, in the United States, is about $2000. The inevitable deduction from the table of analyzed expenses, borne out by the experience of the writer and of all his colleagues whom he has consulted, is that this must be increased sixty per cent, -- the increase to be uniform in all grades, from instructor to head professor.

If the profession of teaching is to attract the highest type of efficient manhood, a living salary must be paid. A man who devotes his life to the cause of the advancement of education must feel a "call" to it. He should be of a type which joyfully relinquishes all desire to accumulate worldly wealth or to live in luxury. Large salaries, commensurate with what equal ability would bring in other lines of work ($10,000 to $50,000) might be just, but would be undesirable, as they would tend to serve as bait to attract mercenary and lower types of men.

but a man fit to occupy a chair in a university shoul dbe paid enough to enable him to live in decency and comfort, rearing and educating his children, and retiring in his old age to something other than absolute penury.

The writer would commend a careful study of his table to all college trustees.

Can a man, whose energies are spent in so unequal and impossible a struggle to make both ends meet, maintain freshness and vigor in his work, be an inspiration to his students, and fulfill in scholarship the promise of his early years? The alternative demanded by the conditions is celibacy.

---- [1] And, of course, the joke is on me: when I first wrote these words--back in 1987--college professor salaries of $250K a year were completely out of the question. Now... it is, I think, what Professor Xxxx Xxxxxxxxx of U. of C. Law School pulls down once one counts health insurance, employer matches to retirement contributions, health insurance, school subsidies, and other fringe benefits...