BUSINESS CASE: LABOR MARKET

In 2017 there was considerable media coverage of the rewards being received by the senior staff (called vice chancellors) at UK universities. Many university vice-chancellors were earning 300,000 a year, and some more than 400,000. The government responded by creating a new regulator called the office for Students. This office would have the power to fine universities if they could not justify high pay. Any pay over 100,000.The BBC reported:

Universities have argued that their leaders are managing large institutions, have enormous responsibilities and huge budgets, and therefore command large salaries.

Jo Johnson (the governments minister for universities and sciences) said It is important theres confidence fees are put to uses we intend them to be - we want fees to deliver great teaching and world class research.

The overall cost of salary and benefits for vice-chancellors rose 2.5 % to an average remuneration of 257,904 in 2015-16 on previous year. When pension contribution are included, the rise was 2.2% to an average of 280,877. And several high profile cases revealed pay levels substantially higher than this. Imperial College London pays its vice -chancellors a 430,000 yearly wage and pension package. She was recruited from an American university some years ago where she was paid 679,745. The University of Birmingham pays (its vice chancellor) 426,000 in salary and pensions.

Defenders off these earnings say that universities operate in a competitive market and argue that salaries help to maintain the UKs positions as a world leader in science and innovation (BBC)

Source: www. Bbc.co.uk/news/uk england

BUSINESS CASE QUESTIONS:

What factors do you think affect the demand for vice-chancellors?

What factors do you think affect the supply for vice-chancellors?