Recently, I heard the argument that the best way for Universities to show respect for all fields of study, and show that they are of equal importance is to pay all professors the same wage. This caused me to think about what economics had to say about this idea. Given that there is a certain amount that the private sector will pay for individuals with a PhD and that this phenomenon influences what Universities will pay for PhD-holding individuals, it makes sense that there exists a market for professors. This market has different demand for different doctorates e.g. a professor of Finance on average is paid $132,000 vs. a professor of Theology is paid on average $71,000.
Due to these differences, it makes sense that there would be an argument that there is an implicit endorsement that some fields are more important than others. This is at least partially true, but it is not clear if this is fair to professors or even students. The main problem of a same-pay approach is a difference in professor quality.
If a University paid both its Finance and Theology professors the same, $100,000, then the University would get above-average quality Theology professors and below average quality Finance professors, ignoring other factors (see graph). This means the the Theology department will have its importance over-weighted, as the University pays for top-notch professors, while neglecting its Finance department. Now if we consider other real world factors that influence professor quality, then the inequity becomes even more clear as Finance professors of above-average quality are penalized for working our hypothetical University and incentivized to leave it.
While for some the disproportional departments are a cost of treating all PhD-holders with respect is worth it, the students of the University and the hardworking professors of the underpaid department may disagree. Ignoring the fact that the higher paid doctorate-holders are often teaching subjects that will lead to students having higher incomes after college, the idea of giving all departments a chance to thrive on their own merits is clearly the desirable and equitable solution by most standards.