Power and Income Inequality in the UC System and Beyond

In looking at recent employment trends in at the university, we find that the there has been a significant increase in the number of highly compensated individuals.  In fact, in 2004, there were 1,890 employees making over $200,000 a year, and eight years later, there were 5,461. This tripling of highly compensated individuals occurred during a period of reduced state funding and a financial crisis that resulted in layoffs, a salary furlough, massive tuition increases, and system-wide budget cuts. Furthermore, in 2012, the university employed, 262,415 people for a total payroll of $11.2 billion, and the people making over $200,000 represented just 2% of the employees, but they earned 14% of the income. In contrast, during 2004, the people earning over $200,000 represented less than 1% of the workers, and they took in 7% of the income. Just like the rest of the American economy, the trend thus has been to concentrate income at the top.

If we look at who the high earners are in the UC system, we discover that they are medical faculty, administrators, athletic coaches, law professors, business professors, and graduate faculty.  Almost none of the employees have anything to do with undergraduate education and none of them are unionized.  In contrast to this group of highly compensated individuals, we find the majority of teachers and workers who receive moderate incomes and are mostly unionized.   One thing then to learn from this example is that unionization is clearly not driving tuition increases, and in the case of undergraduate instruction, wages have remained stable, but they have not kept up with the huge increases of the top earners. 

           

Looking at the Office of the President, we find some surprising statistics.  We have been told that since 2009, there has been a major reduction in the number of employees and the cost of running the central office, but, we find that in 2008, there were 2,243 employees for a total gross pay of $155 million, and in 2012, there were 2,093 employees for a total pay of $155 million. So, the number of employees went down, but the cost stayed the same, and this is due in part to an increase of people making over $200,000.

            

As income gets concentrated at the top in the UC system, so does power.  The growth of the administrative class is coupled with an increase in the number of faculty hired outside of the tenure-track system.  According to the recent UC Accountability Report, in 1998, there were 7,250 full-time equivalent (FTE) tenure-track faculty on the general campuses and medical programs, while in 2013, there were 8,914; meanwhile, the number of non-tenure-track faculty (lecturers, visiting professors, clinical non-tenure) went from 4,511 FTE in 1998 to 7,638 FTE in 2013.  This means that during this period, the number of tenure-track faculty went up by 1,664, while the number of people off the tenure track went up by 3,128.  Although these figures do not include graduate student instructors and post-docs, it is clear that the majority of the people teaching and researching at the university have very little role in shared governance.  In fact, national studies show that as the number of faculty off the tenure track increases, the number of administrators increases, and the level of shared governance decreases.

Like the rest of America, the increase in income inequality and the number of highly compensated managers is coupled with a decrease in job security and compensation for most workers.  This transformation is also tied to a reduction of workplace democracy as a result of de-unionization, de-professionalization, and the growing disparity between the highly compensated managers and the part-time, flexible labor force.  In order to reverse these trends, we have to fight for increased democratic participation in the workplace through the creation of more stable jobs and a growing role of all workers in the decision-making process. Moreover, unions have to bargain for more democracy in the workplace and reduced income inequality.  

Employment for College Grads after the Recovery

According to an Inside Higher Ed article on a new government report, ?Four of five students who graduated college in 2008 were able to find some sort of employment in the four years after their graduation, despite entering the work force during the worst of the economic recession, a federal report shows.? This very positive reading of the report has to be put in context.  First of all, the study is only looking at people who graduated from four-year institutions, not community colleges or for-profit schools.  Second of all, out of the 82% who have jobs, 84% have full-time jobs, so that means that 31% of all of these recent grads with degrees from four-year institutions were either unemployed or worked half time or less.  Moreover, 10% of the employed were actually back in school.

One important issue that the report fails to examine is whether these students with bachelor degrees are working at jobs that traditionally require these degrees.  We know from general labor trends that over 25% of the people working now who have earned college degrees are working at jobs that used to only require a high school degree or less.  The government web site does tells us that 22% of the sample were in jobs not related to their college major, 40% were in jobs  closely related to their major, and 31% had employment in jobs somewhat related to their majors.

A major problem with the study is that it relies mostly on self-reporting and a 17,00 person sample that skews white and female.  73% of the respondents were white and 58 were female.  Moreover, 73% had graduated before the age of 24.  Also, 32% graduated from private universities, and so this sample does not look like most students who are now enrolled in higher education.  

Within this rather selective group of graduates (remember less than 60% of the students at these institutions ever graduate), after four years, the median salary for a full-time worker was $46,000 and the median salary for a part-time employee was $20,000.  So half of the 69% (34%) of the recent college grads with full-time jobs with bachelor degrees from this selective sample were making less than $46,000 a year, and another 16% were making less than $20,000.    

The report also tells us that in four years after graduation, 39% had one job, 34% were on second job, and 28% have had three or more jobs.  In other words, there is a high level of job movement, which resulted in the finding that the average student in this sample spent 10 months out of the labor force in four years.  We are thus a far way from the opening claim that four out of five recent graduates had jobs.  Like so much reporting on employment, general claims have to be analyzed at a much deeper level in order to get the real story.  A more accurate summary of this report would say that out of the select group of students who graduated in 2007-8 from four-year institutions, 61% presently had full-time jobs with a median salary of  $46,000, while the rest of these graduates were making a median salary of $20,000 or less. Of course, these stats do not include the vast majority of students who are either at community colleges or who will never graduate. 

Arne Duncan, Larry Summers, and the Higher Education Myth

I am currently working on a book, The Politics of Higher Education, Jobs, and Inequality.  One of my main arguments is that there is a bipartisan consensus that higher education is the solution to all of our economic and social problems.  There are several problems with this stance: 1) producing more people with college degrees does not create more good jobs; 2) higher education itself magnifies economic and social inequality; 3) political officials focus on higher education so they don?t have to talk about underemployment, exploitive labor practices, globalization, automation, de-unionization, de-professionalization, privatization, poverty, the minimum wage, and social welfare programs; and 4) the belief in higher education as a fair meritocracy serves to justify inequality. 

These myths surrounding higher education and the economy were on full display during Arne Duncan?s and Larry Summers' presentations at the Aspen Festival of Ideas this week.  Duncan argued that since the value of having a college degree has never been greater, we have to find ways of making colleges and universities more accountable.  For Duncan, this means that instead of the government simply giving schools more money with no strings attached, we need to judge higher education institutions on outputs like their graduation rates and number of Pell Grant students.  Although these are important issues, they do not address the question of educational quality.  Instead, the Obama administration is developing their own method of rating and ranking schools, and this feeds into the logic of the meritocracy and the idea that we know how to judge learning in a quantifiable way.

Duncan argued that while student debt levels are too high for some students, college is still the best investment a person can make.  What he did not say is that one reason why college students on average earn so much more than students without college degrees is that the wages for people with only high school degrees or less has gone down so much.  Moreover, over 50% of recent college grads are either underemployed or unemployed, and many of these grads are working at jobs that do not traditionally require a college degree.  Thus, while earning a degree does increase your odds at earning more, the main reason why is that so many people are earning less. 

Duncan and others appear to believe that college degrees produce jobs that require degrees, when in fact, there is very little relation between these two factors.  In fact, since wealthy students graduate from college at a much higher rate than anyone else, higher education often serves to increase income inequality.  Higher education thus cannot substitute for broader economic public policies, and at a time when public higher education is seeing decreased funding, it is absurd to ask higher education to be the solution to all of our problems.  For example, Duncan claimed that higher education is the key to keeping high-pay, high skill jobs in America, but this perspective fails to look at the role of corporations seeking to increase their profits by outsourcing jobs and replacing full-time workers with part-time employees. 

In what we can call the narcissism of the meritocracy, political officials believe that since higher education helped them to attain their success, then everyone else should be able to do the same.  The flip-side of this myth is that the people who are not successful only have themselves to blame.  In discussing President Obama?s own career, Duncan used this example as proof that the system works. However, we know that Obama is a rare exception, and our meritocracy is turning back into an aristocracy. 

Duncan also believes that the Obama college ranking system will give consumers more information so that they can make better decisions in picking a school, and this process will create a free market structure where people will vote with their feet.  In other terms, the colleges and universities that are not performing well in the ratings will lose students and then they will be forced to change.   This whole logic is based on the false ideology of the invisible hand and social Darwinism.    In the underlying belief in the rationality of the free market, the idea is that only the fittest will survive, and everyone else will be disrupted or eliminated.   

In his interview, Larry Summers added to this neoliberal consensus by claiming that what is preventing higher education from advancing and serving the students are the dual evils of tenure and shared governance.  Referring to the debate between Jill Lepore and Clayton Christensen, Summers argued that technology will force schools to either adapt or die.  He added that since the average professor is around fifty, these institutions will not experiment because all of the new technology companies are led by young people.  The implied solution then is to get rid of tenure and shared governance and let these schools experiment and innovate.   What Summers did not say is that these institutions have already innovated by replacing professors with part-time, non-tenured faculty.

While the current President of Harvard, Drew Faust, did push back on some of Summer?s ideas, she said that faculty would be much happier if they spent their time on their own expert areas and did not waste time on learning about school budgets and other issues concerning shared governance.  In other words, she also believes that shared governance should be handed over to the expert administrators who continue to multiply on our campuses.  

Like Duncan, Summers believes that it makes no sense to have 35,000 professors teach calculus at their individual schools when a small number of great professors could teach thousands online.  Under the banner of increasing equality of opportunity, Summers wants to eliminate most of the faculty.  Here we see one of the ways that higher education, jobs, and inequality are linked:  technology allows managers to replace workers and increase inequality by allowing a few stars to make all of the money.  Of course, the whole idea of stars is based on the meritocratic idea that we can fairly judge and assess quality.  In the desire to turn every aspect of our lives into a market, the myth of the fair meritocracy plays the Darwinian role of sorting society into a small number of winners and a large number of losers, and higher education has now become on of the main sources for this generation of inequality.