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I've worked in higher education on the administrative side. I've been able to get a very thorough look at University budgets. From my perspective it's really a travesty that research Universities, with their multi-billion dollar operating budgets seem more inclined to hire largely purposeless administrators than to increase PhD stipends/wages such that a PhD wouldn't be so financially painful for students.

From my own perspective working in administration, it seems to me that the blame can be placed squarely at the feet of the near universal tendency for bureaucracies to naturally increase in size over time if left to their own devices. The discussion of why this is the case is beside the point, but this near universal law seems to be at work here. This limits graduate student stipend size because when faced with the choice of expanding the bureaucracy or paying graduate students more, the administrator - as a bureaucrat - will almost invariably decide to expand the bureaucracy.

That said, there are other dynamics at play in Universities that make me wonder why bureaucracies have been so successful at vacuuming up funds. Elite Universities often compete for top PhD candidates, so why haven't the competitive forces that drive up wages in the face of labor demand also driven up the stipends offered to accepted candidates? Are Universities coordinating to keep stipends artificially low? Or is the bureaucratic tendency to expand overpowering the market dynamics that would otherwise compel Universities to offer higher stipend packages? Or are existing stipend packages already at what we would expect the market level to be?

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    Why do you think if there was more money in the budget it would go to pay students more and not faculty more? – StrongBad Jun 26 '18 at 22:04
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    Or about four people to make sure the grad students don't spend too much money when traveling? – Azor Ahai Jun 26 '18 at 22:19
  • This appears to be more of a rant than a focused question. Yes, as a grad student I wasn't paid what I could have been paid as an engineer with a BS. But, I also wasn't competent (yet) at being a researcher - I had much to learn. Further, most US grant agencies limit the amount of overhead (which pays the bureaucrats) that can be taken by the university. Your argument does not hold up. – Jon Custer Jun 26 '18 at 22:28
  • @StrongBad I'd actually extend that to "Why do you think they even come out of the same budget?" – Fomite Jun 26 '18 at 23:19
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    @DanRomik sure. The work they do, from what I've seen, neither increases revenue for the University, lowers costs, or contributes to the University's main mission of educating students or engaging in research. They are hired without any clear purpose simply because the University has a very large budget (from large student tuition costs) and create initiatives that very often have no clear benefit to the University, simply so they can justify their existence. In order to support these initiatives, they hire even more people. – credo56 Jun 27 '18 at 15:24
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For students funded via the NIH and similar mechanisms (CDC and AHRQ come to mind), there are standard rates for what graduate students are paid. This is a fairly extensive treatment on the subject for one university: https://controller.ucsf.edu/file/4361

There are some ways to supplement this, but "This is what my grant pays for" is a very strong pressure on budgets, and departments often set grad student pay by policy in light of this, to prevent there being clear gradients of funding between students in their department.

Note that going over this by a lot via something like unionization can have extremely unintended consequences, like PIs suddenly becoming much more interested in postdocs.

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    NIH postdocs have a well-defined scale that influences salaries throughout academia. The same is not true for grad students supported by NSF—even within universities and schools, individual departments may pay their students wildly different amounts. – aeismail Jun 26 '18 at 22:29
  • @aeismail Our department sets things based on the NIH rate even if you're paid through the NSF, DoD, Merck, newly discovered pirate gold, etc. to prevent that. But I'll edit out the NSF. But do also note that the "postdoc" rate is also functionally a grad student compensation cap. – Fomite Jun 26 '18 at 22:31
  • Just to say that in the UK, the PhD stipend is also set by the body funding the PhD rather than the university. – Ian Sudbery Jun 27 '18 at 11:23
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I think this is the wrong question to ask. Remember that throughout high school, undergraduate studies and most masters programs, students pay for themselves. Viewed from this perspective being paid to do a PhD is a huge blessing. Imagine if PhD studies not only not pay five figures a year, it cost five figures a year. This isn't that far-fetched either, since PhD students consume faculty time, university resources, take courses, and so on. A student who complains about the paltry pay sounds pretty ungrateful to me, not to mention ignorant, since he presumably knew what the stipend was before accepting the offer.

You also write that "Elite Universities often compete for top PhD candidates, so why haven't the competitive forces [driven up stipends]". This is because top PhD candidates are generally not driven by money (if they were, they usually would not be doing a PhD in the first place). Many top PhD candidates will not think twice about taking a $25k/year position at an elite university instead of a $50k/year position at a lower-ranked university. Hence normal rules for supply and demand don't apply. Further, even with low pay, there's no shortage of PhD students. There's no need to pay more then.

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    The "top PhD candidates are generally not driven by money" claim is false. In most countries, full professors at top research universities have much higher salaries than the median salary of all full-time employees. This suggests that money is an important factor for top researchers. It's not the only factor, but once they gain more leverage, researchers seem to prefer a higher salary over the chance to hire one more PhD student / postdoc. – Jouni Sirén Jun 27 '18 at 8:38
  • @JouniSirén I meant PhD candidates, not faculty. – Allure Jun 27 '18 at 8:44
  • Today's top students are tomorrow's top faculty. They accept low stipends/salaries as students, because they have no choice, if they want to stay on academic career. Their true preferences are revealed once they are able to make choices. – Jouni Sirén Jun 27 '18 at 8:52
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    @JouniSirén The question deals with PhD students. A university could conceivably try to attract top candidates by offering a larger stipend. Also, perhaps when it's time for PhD students to become faculty, they've grown older and wiser, which is why they choose differently. – Allure Jun 27 '18 at 9:00

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