Case Study 1 — The MSU Adjunct Wage Gap: Inequality You Can See in Your Own Classroom

Professor Elena Vasquez and Professor James Chen teach in the same building at Millbrook State University. Vasquez earns $38,000 from all sources. Chen earns $92,000 from MSU alone. The gap between them — roughly 2.4:1 — is the inequality the reader can see from their seat in the classroom.

This case study walks through the gap using the four explanations from §13.2 and the three philosophical frameworks from §13.3. The goal is not to settle whether the gap is "right" or "wrong" — it is to show how economic analysis clarifies the forces that produce the gap, and how different value frameworks lead to different evaluations of the same facts.

Why the gap exists: the economic analysis

Institutional change

The most important structural factor is the shift from tenure-track to contingent academic labor. In 1975, about 75% of U.S. college faculty were tenure-track or tenured. By 2025, that number has fallen to about 25%. The remaining 75% are adjuncts, lecturers, and other contingent faculty — hired course by course, semester by semester, often at multiple institutions.

This shift was driven by university budget pressures (state funding for public universities has fallen in real terms), administrative growth (the number of administrators has grown faster than the number of faculty), and the simple economics of labor supply: there are far more people with PhDs who want to teach than there are tenure-track jobs. The oversupply gives universities enormous bargaining power over adjuncts.

The institutional change is not unique to academia. The broader U.S. economy has seen a similar shift toward contingent work — the gig economy, contract work, temp agencies. In each case, the employer shifts risk and cost from the firm to the worker, which increases employer flexibility and reduces worker security and compensation.

Labor market segmentation

The academic labor market is deeply segmented by field. In fields where PhD holders have lucrative outside options — economics, computer science, business, engineering — tenure-track salaries are pushed upward by competition with the private sector. Chen's $92,000 at MSU is lower than what an MIT PhD in economics could earn in consulting, finance, or tech. MSU has to offer competitive salaries to attract and retain tenure-track economists.

In fields where PhD holders have few outside options — sociology, English, history, philosophy, art history — universities face no competitive pressure to pay high salaries. Vasquez's PhD in sociology does not command a high price in the private sector. MSU can pay her $3,200 per course because her alternatives (another adjunct position at similar pay, a non-academic job that doesn't use her training) are not much better.

The segmentation is not a market failure in the narrow sense — it's the market working as the supply-and-demand model predicts. But the outcomes are strikingly unequal for people doing very similar work.

Monopsony power

For many adjuncts, the local university is effectively the only employer of their specific skills. Vasquez can teach sociology at MSU, or she can teach sociology at the nearby community college (which pays even less), or she can leave academia entirely. She faces a monopsonistic labor market: one buyer, many potential sellers, with the buyer having wage-setting power.

Monopsony, as we'll see in Chapter 21, is a labor market structure where the employer can pay below the competitive wage because workers have limited alternatives. The standard supply-and-demand prediction (that wages reflect productivity) doesn't hold in monopsony markets. Wages reflect the employer's power, not the worker's value.

Winner-take-all dynamics

Within academia, a small number of positions are highly compensated, secure, and prestigious (tenured professorships at research universities). A large number of positions are poorly compensated, insecure, and invisible (adjunct positions). The distribution looks like a winner-take-all market: the few who get tenure-track positions "win" disproportionately; the many who don't are left with the scraps.

The mechanism is similar to other winner-take-all markets: the supply of qualified candidates far exceeds the number of desirable positions, so a small difference in luck, timing, connections, or field of study can produce a large difference in career outcomes.

How the three frameworks evaluate the gap

The utilitarian view

A utilitarian asks: does the adjunct system maximize total welfare?

The answer is probably no. The current system produces enormous stress and financial hardship for adjuncts (large welfare loss for many people) in exchange for modest budget savings for universities (smaller welfare gain for the institution, which passes some savings to students as lower tuition but much of it to administrative expansion). The marginal utility of income is much higher for Vasquez at $38,000 than for the university at the margin. A system that paid adjuncts more (and administrators less, or charged slightly higher tuition) would probably increase total welfare.

The Rawlsian view

A Rawlsian asks: does the system benefit the worst-off?

The worst-off in this system are the adjuncts — Vasquez and the thousands like her. The system does not benefit them; it exploits their passion for teaching and their limited alternatives. A Rawlsian would argue that the system is unjust because the inequality does not benefit the worst-off. The difference principle is clearly violated.

A Rawlsian policy response: guarantee adjuncts a minimum compensation per course that approaches a living wage; provide health insurance and retirement benefits to all who teach above a threshold number of courses; and create pathways from adjunct to tenure-track positions.

The libertarian view

A libertarian asks: did Vasquez choose this freely?

In a narrow sense, yes. She chose to get a PhD in sociology, knowing (or having reason to know) that the academic job market was difficult. She chose to accept adjunct positions rather than leaving academia. No one forced her.

In a broader sense, the "choice" was heavily constrained. The academic labor market has features — the long training period, the geographic limitations, the psychological investment in a career — that make "just do something else" a much harder option than it sounds. And the information available to Vasquez when she started her PhD (in her early 20s) about the probability of getting a tenure-track job was imprecise at best and misleading at worst.

A libertarian who takes the "narrow" view would say the gap is just. A libertarian who takes the "broader" view might acknowledge that the conditions of choice were not fully voluntary in the way the framework requires.

What could change

Several policies could narrow the adjunct-tenure gap:

1. Unionization. Adjunct unions have formed at many universities and have negotiated higher per-course pay, health benefits, and job security. The evidence suggests unions raise adjunct pay by 10–25% on average.

2. Institutional reform. Some universities have created "teaching professor" tracks — permanent positions with reasonable pay and benefits, focused on teaching rather than research. These are better than adjunct positions but typically pay less than tenure-track research positions.

3. Transparency. Requiring universities to publish adjunct pay, benefits, and working conditions would give prospective PhD students better information about the labor market they are entering. Information is the prerequisite for meaningful choice.

4. Reduced PhD output. If universities produced fewer PhDs in oversupplied fields, the labor market would tighten and adjunct wages would rise. But no individual university has an incentive to cut its own PhD program.

5. Public funding for higher education. If state governments restored the level of per-student funding they provided in the 1980s, universities would face less budget pressure and could afford to pay adjuncts more. The political feasibility of this is uncertain.

What this case study illustrates

The Vasquez-Chen gap is not a puzzle. It is a predictable outcome of institutional change, labor market segmentation, monopsony power, and winner-take-all dynamics. The economic analysis explains why the gap exists. The philosophical frameworks help you evaluate whether it should exist. The policy options show what could change.

The gap is also a microcosm of broader inequality trends. The forces that produce the adjunct-tenure gap — institutional erosion, concentrated market power, the winner-take-all structure — are the same forces that produce the broader rise in inequality across the U.S. economy. Understanding one helps you understand the other.

Discussion questions

1. Is the adjunct-tenure gap at MSU "fair"? Answer from each of the three frameworks.

2. "Vasquez chose to get a PhD in sociology, knowing the job market was bad. The gap is a consequence of her choices." How would a libertarian, a Rawlsian, and a utilitarian each respond to this claim?

3. Would unionization of adjunct faculty at MSU reduce the gap? What does the institutional-change explanation predict? What might the university's response be?

4. The case study notes that some universities have created "teaching professor" tracks. Is this a good solution? What are the trade-offs?

5. The case study suggests that reducing PhD output would tighten the adjunct labor market. Should universities produce fewer PhDs? Who would benefit and who would lose?