This is one of the key problems with statements like this one, made by Mark C. Taylor:
A middle ground will address most of the problems. After a trial period of three to five years, faculty members who merit promotion should be given seven-year renewable contracts. For this system to work effectively, these reviews must be rigorous and responsible.
I am not saying that you could not get this to work. But it is going to change the dynamics of these positions considerably. People are often willing to move cross country for the chance of permanent employment. But who is willing to do a major relocation to a small town for a series of rotating contracts? Even more important, these are people who have spent a decade (or more) in school and who are ill positioned to make major risks. And, under these conditions, buying a house counts as financial circumstances may make the decision not a renew contracts happen in clusters.
It is true that, ideally, there would be no global financial considerations placed on the decision to renew a contract. But that seems like an idealistic assumption.
Now, it is true that universities in big cities don't have this issue. However, in the United States and Canada (where I have experience), it is the universities in large (and diverse) cities that can afford to not have tenure now. You can decide you like Toronto as a city and be willing to find another job if the contracts at the University of Toronto don't work out. It's hardly the same at Lakehead University (in the small and very blue collar city of Thunder Bay) where relocation is likely to be hundreds of miles should employment fall through and alternative employment options are thin.
So one item that is being missed in the tenure debate is the heterogeneity of universities, themselves, and how much local conditions matter.
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