COVID-19 has been bad for jobs in higher education. Last October, the NTEU estimated that since March 2020 more than 12,000 jobs had been lost. According to Universities Australia in February 2021 at least 17,300 jobs were lost in 2020. But how many jobs were there to begin with?
This is a surprisingly difficult question to answer. The official DESE staff statistics give us a headcount as at 31 March each year of people employed on an on-going or fixed term contract at public universities and Bond, Notre Dame, University of Divinity and Avondale University College. At the end of March 2020 these institutions had just over 130,000 employees.
But as the chart below shows, the full-time equivalent count is always higher than the on-going or fixed term headcount, because it includes casuals. On a FTE basis, about 18 per cent of all staff are casuals, including nearly a quarter of academic staff. But DESE does not collect headcount data on casuals.
I could think of a couple of plausible mechanisms. With children sent home from school and childcare restricted women might have given up study, at least temporarily, to look after their kids. The difficulty of doing required clinical placements and teaching rounds during COVID-19 workplace disruptions might have triggered deferrals, which would probably affect women more than men due to their their large majorities in health and education courses.
On the other hand, the quoted fall in female enrolments – 86,000 – was struggling to pass my ‘does it look right?’ test. And the source, Education and Work, which is conducted each May, has a history of rogue results. It is a sample survey of Australian residents rather than being derived directly from enrolment data. The further users drill down into Education and Work sub-categories – gender, type of enrolment, age group etc – the less reliable it gets (the ABS is upfront about this, and publishes relative standard errors).
Last November I used the TableBuilder version of Education and Work (expensive paywall; university staff can use it) to exclude international students. That caused the female decline in enrolments to go way and became a small increase, although with a narrowing of the gender gap. In 2019 Education and Work reported 1.5 female students for every 1 male student, which declined to 1.42 to 1 in 2020.
In my previous post in this series, I argued that international student fees help pay for under-funded government-sponsored research grants. But these research projects are not the only partially-funded research universities are trying to finance. They also have many teaching staff on contracts that include research time, but who do not attract equivalent research income.
For academics, the expected and preferred academic career is generally to have a teaching and research or research only role. For most academics, however, teaching is not their top priority. A survey about a decade ago found that, among teaching-research academics, nearly two-thirds leaned towards or were primarily interested in research.
Not surprisingly, most people who do PhDs are interested in research. In a 2010 survey, only six per cent of research students planning an academic career nominated a ‘mainly teaching’ role as their ideal job.
They are still not counted as charities to get the lower 15 per cent decline in turnover threshold (not that Torrens is one anyway). They still have to count government grants in their revenue base. However, their revenue loss can be calculated over the month or quarter that applies to most enterprises, rather than the six months that applies to Table A universities.
A week ago, when I last reported on the saga that is university eligibility for JobKeeper, the government had just announced that its grants would be counted in university revenue, making it harder for universities to get the required 30 or 50 per cent (depending on their size) drop in their income.
Despite this, I thought that some universities might still be eligible. The University of Sydney believed that it was. This was because while no university is likely to be down 30 or 50 per cent on its annual revenue, the timing of when international students pay their fees could mean that, in certain months, the cash flow reductions were that large.
The amended JobKeeper rules dash that hope. While other organisations can calculate their revenue losses over a monthly or quarterly period, for universities the relevant period will be the six months starting 1 January 2020. Over a six-month time period, the fortnightly payments of Commonwealth grants are likely to push university revenue losses back below 30 or 50 per cent. Read More »
Update 2/5/20: The government has further changed the rules so that university income must be assessed over the six months from 1 January 2020.
When I first wrote about universities and JobKeeper, at the end of March, I concluded that although they were included they were unlikely to meet the required revenue falls. Especially for the universities with $1 billion plus annual revenue, the required 50 per cent fall in revenue seemed like a financial disaster beyond what COVID-19 issues could trigger.
This flips the normal funding biases of higher education. Generally, educational organisations that were publicly-funded before 1989 have privileged access to government subsidies. Now, for a brief time, the educational charities that are not in the pre-1989 group have easier access to public funding. They only have to show a 15 per cent decline in revenue, instead of 30 or 50 per cent for Table A and B institutions, depending on their revenue. In 2018, 41 non-university higher education providers were registered educational charities.*Read More »
At least temporarily, some domestic students are financially better off due to the government’s COVID-19 measures. This is due to increased income support payments and JobKeeper exceeding their likely pay if they had been working.
Eligibility for JobKeeper is a two-stage process. First the employer has to be eligible, with a 30 per cent reduction in revenue for businesses with revenues below $1 billion, and a 50 per cent reduction for business with revenue above $50 billion. Most charities have a lower threshold of a 15 per cent reduction in revenue.
Second, the student has to be an eligible employee. In the ABS Characteristics of Employment Survey for August 2019, about two-thirds of employed students aged 17-30 years who are studying full-time meet the criteria. They have either on-going employment (using the entitlement to paid sick leave proxy) or are casuals who have been with their current employer for 12 months or more. This analysis includes all students, not just higher education students.
[Update 25/4/20: The Treasurer has announced that full-time students aged 16 and 17 years will not be eligible for JobKeeper, adding an age condition that slightly affects my analysis.]
If these tests are satisfied, there is a flat payment from the government, but paid by their employer, of $1,500 a fortnight. This is likely to be much more than full-time students usually earn. According to the Characteristics of Employment Survey, their median earnings are $320 a week, or $640 a fortnight. JobKeeper is likely to more than double earnings for eligible students until it expires on 27 September 2020. Read More »
Update 28/04/20: It now seems likely that there won’t be additional higher education places beyond 1000 places for non-university higher education providers. This would revise down the potential value of the package by about $100 million, to around $500 million – but noting the substantial uncertainty in the original post.
Calculating the financial impact of these measures is not easy. We don’t know what impact COVID-19 has had on domestic student numbers, although some universities had soft demand before COVID-19 disrupted on-campus classes. The University of Sydney has reported that its domestic numbers are down nearly 5 per cent on expectations, but that could be due to a tough NSW market.
The government now has a first support plan for higher education. Its key elements are letting universities keep student-related grants and loans for 2020 even if they enrol too few students, funding short courses, and regulatory fee relief.
An earlier post was my inference and guesswork from fragmentary Easter Sunday announcements. This post uses material from FAQs issued by the Department of Education on Tuesday. For readers who do not need to be across the technical detail of higher education funding I recommend my article for The Conversationrather than this post.
Whatever the reason, universities will now be paid their original estimated funding rather than their legal entitlement. This also suspends the need to meet performance funding criteria, which is sensible. Read More »