Economics Professor Poorer than Sewage Workers

Tomohiko Taniguchi (Editor at Large, Nikkei Business Publications)

Something is apparently wrong with Japan's college education system. Unless the missing link between academic accomplishments and financial rewards is fully restored, there remains little incentive for college professors to be more academically productive than they are now.

A moral hazard noticeable amongst professors at nationally run universities is that their annual compensations are so low while their job security is on such firm ground that many of them simply give up being aggressive in the pursuit of their studies.

Let us take the example of a Professor at a relatively well-known national university who, over a couple of glasses of beer the other night, bluntly declared, "Studies? What studies? I do none". It was not necessarily a joke, for his financial situation deserves not admiration but rather sympathy. His annual compensation including everything, from tax and bonuses to reimbursements for book purchases and travel expenses, totals only 11.57 million JPY - that is 106,000 USD, or 61,000 GBP. For a 53-year-old tenured economics professor, this is far from sufficient to sustain his household if he is the sole breadwinner, which the professor happens to be.

With this allowance, he may well be able to make two or three return trips from Tokyo to Osaka in a year, but not a single overseas trip. He regrets that he cannot subscribe to the Financial Times, as doing so would cost him too much, let alone subscribing to database services, like Factiva.com or LexisNexis. He has in vain requested to the administrators that the university as a whole subscribes to one of those services. Under the gradual, though steady belt-tightening that has been going on amongst nationally owned universities, buying the kind of services that would benefit only a handful of professors tends to be regarded as unworthy. It is little wonder that he says advancing his studies is almost a luxury.

Could he then work as, for instance, a non-executive board member in the corporate world to compensate his income? Could he go on strike as a union member, urging the university to pay them more? Neither is possible because he is a government employee, whose moonlighting is explicitly prohibited and basic worker's rights suspended.

So much for the poor remuneration a senior-level professor has to endure. The flip side of the coin, however, is that as a government employee, his job security is so firmly assured that no one is entitled to fire him. Equally, neither the president of the university nor the dean of his school can demote him, even if his academic performance is below par. This is because the system that has become fossilised amongst private businesses, namely seniority rule under the lifetime employment system, remains intact amongst government employees, including those professors at nationally run universities.

What emerges consequently is a total lack of rewards and incentives, leading many professors to abandon their ambitions of aggressively advancing their own studies. This reminds me of what it was like under the Soviet rule in Russia.

Given the huge proportion national universities have within Japan's college education system, the problem described thus far is too big to ignore. The economics professor, whose annual paycheque barely reaches 12 million JPY, was once insulted to learn that some local municipalities, with different systems of compensation, are rewarding sewage workers with exactly the same amount of money, 12 million JPY.