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How Public Sector Unions Exploit Identity Politics

As the ethnic composition of America changes from mostly white to a kaleidoscope of color within a generation, there is no better way to fracture society than to teach everyone to resent everyone else. Nurturing tribal resentment is a winning strategy for government unions, because a swollen, authoritarian, unionized government becomes the referee. Government union power increases every time another “person of color” becomes convinced that only government redistribution and racial quotas can mitigate their persecution at the hands of a racist white “patriarchy.”

When society fractures, when we face increasing unrest and poverty, government unions win. It is inherently in the interests of government unions for society to fail. If public education fails, hire more teachers and education bureaucrats. If crime goes up, hire more police and build more prisons. If immigrants fail to assimilate, hire more multilingual bureaucrats and social workers. If poverty increases, hire more welfare administrators.

If you don’t think this strategy can work, come to California, America’s most multi-ethnic state, and a place where government unions wield absolute power. Their wholly owned subsidiary, the Democratic party in California, has spent the last 20+ years perfecting the art of convincing the electorate that Republicans are racists. The strategy has been devastatingly effective, especially with people of color.

According to the Public Policy Institute of California, among California’s “likely voters,” slightly more Whites remain registered as Republicans, 39%, than Democrats, 38%. Among Latinos the registered Democrats, 62%, far outnumber Republicans, 17%, and among Blacks the disparity is even greater, 82% Democrat vs. 6% Republican. Among Asians, where the disparity is less, the Democrats still have a nearly two-to-one advantage, 45% to 24%.

All of this racial perseverating comes at tragic cost. Among the fifty states, California has the highest taxes, the highest state and local government debt, the most welfare recipients, the most people living in poverty, and the highest cost-of-living. The roads and bridges are crumbling, and the water and energy infrastructure hasn’t been significantly upgraded in 30 years. But purveyors of identity politics have a strategy that earns votes, so why engage in actual governance? It’s all about race, stupid. Hire more bureaucrats.

The worst consequence of choosing identity politics over actual governance is the slow but relentless destruction of California’s once great system of public education. There has been negligible improvement in educational achievement for members of California’s disadvantaged, despite decades of political control by public sector union funded Democrats who pander incessantly to the voter’s lowest common denominator of resentment, race. Rather than admit that failures of culture, community, and public education are the real reasons some ethnic groups underachieve, the Democrats that run Sacramento attribute every disparity in outcome among races to the pervasiveness of racism. Their solution? Quotas.

Here is an interesting comparison to prove that quotas are being used to discriminate against California’s “privileged” youth. All data is for 2017. The first column shows what percentage of students taking the SAT, by ethnicity, achieved a score at or above the minimum to be considered “college ready.” The second column shows the ethnic breakdown of college age students in California. Column three uses a factor calculated from columns one and two, for each ethnicity, the percent of college ready students is multiplied by that ethnicity’s percent of the total pool of college age Californians. Each factor is then divided by the sum of all four factors, to calculate a crude but significant indicator of what percentage of 2017 college admissions would be offered to students of each ethnicity, if admissions were based on merit as expressed by SAT scores. Column four shows the actual admissions to California’s UC System in 2017 by ethnicity.

California’s UC System – 2017 Admissions – Actual vs. SAT Based

There are a few obvious takeaways from the above chart. Most salient is the fact that white applicants, if SAT scores were the sole basis for admission, are clear victims of discrimination. After all, if based on their college readiness as assessed by their SAT performance combined with their percentage of the population, they should have earned 43% of the admissions to the UC System, why did they only represent 23% of the incoming freshmen in 2017? But there are other disparities that point to an even bigger problem.

Why, for example, do actual Asian admissions, 34%, exceed the merit based admissions percentage, 21%, as indicated based on their percentage of the college age population and the percentage of them achieving the SAT benchmark? Why, for that matter, are the actual Latino admissions, 33%, slightly less than the amount they would theoretically earn, 35%, based that same criteria? The answer in both cases is the same, and can be best summarized in this quote taken from a report released earlier this year by the Brookings Institution:

“Race gaps on the SATs are especially pronounced at the tails of the distribution. In a perfectly equal distribution, the racial breakdown of scores at every point in the distribution would mirror the composition of test-takers as whole i.e. 51 percent white, 21 percent Latino, 14 percent black, and 14 percent Asian. But in fact, among top scorers—those scoring between a 750 and 800—60 percent are Asian and 33 percent are white, compared to 5 percent Latino and 2 percent black. Meanwhile, among those scoring between 300 and 350, 37 percent are Latino, 35 percent are black, 21 percent are white, and 6 percent are Asian.”

What this means in plain English is that in the UC System, where supposedly only the most elite high school graduates are granted admission, you will find the distribution of the higher SAT scores by ethnicity skewed even more in favor of Asian and White students than you find when evaluating how many students merely achieve the “benchmark” SAT score. This is why Asian admissions, which are arguably the only UC admissions in 2017 that were based truly on merit, skew higher than you would otherwise expect. That is also the reason that Latino admissions skew somewhat lower. And it also indicates that White applicants are discriminated against even more than shown on the table.

Such is the landscape of California’s public system of higher education, considered among the best in the world.

To further investigate this evidence, I talked someone who spent over a decade serving on the Board of Regents at the University of California. They did not mince words. Here are a few of the things they had to say:

– SAT scores have become less important because the university has gone to “holistic admissions” instead of SAT based admissions – the SAT is also watered down with a subjective 3rd “essay” section. The subjectivity of the admissions criteria makes it harder to prove discrimination.

– For years now, the UC System has diversified the faculty by taking more professors to fill positions in African American and Latino studies and shielded itself from discrimination because they can say the person hired had strength in the discipline they needed to fill.

– Ethnic studies departments are academically weak and don’t provide graduates with anything they can use. Most ethnic studies departments are growing because people are being hired and enrolled in order to fulfill de facto diversity quotas both for faculty and students. The alternative would be to destroy the integrity of the hard sciences with unqualified faculty and students.

– After the passage of Prop. 209, the admission of Asians rose to about 35% because you could not suppress their achievement without admitting you’re breaking the law. Latino and Black admissions track at 29% and 6%, respectively, more consistent with their percentage within California’s population. To accommodate the Asian over-enrollment and the Black and Latino quotas, qualified White applicants are the victims – Whites represented less than 25% of admissions to the UC system last year.

– California’s legislature is controlled by the Latino Caucus, which makes sure that 25% Latino admissions are maintained. Whites don’t go out and protest and make noise because that is politically incorrect and the media doesn’t report the data anyway.

Readers are invited to challenge the accuracy of any of the above statements, made by an informed observer. And what is the result of all this mediocrity that hides behind diversity, this discrimination that hides behind achieving quota-driven equality of outcome? A fracturing of society into identity groups, each of them, whether via propaganda or via reality, encouraged to harbor resentment towards every other group.

If one were to identify which of California’s public sector unions is the most guilty of fomenting racial disharmony, it would certainly be the ones representing K-12 public school teachers and the ones representing college faculty. Their outlook, which is reflected in their policies, their curricula, and only somewhat camouflaged on their websites, is to blame the academic achievement gap on anything but their own poor performance as the most influential determinant of educational policy in California. Blame the rich. Blame capitalism. Blame Western Civilization. Blame “white privilege.” Blame racist Republicans. But don’t look in the mirror.

A rising trope among these neo-racialist purveyors of separatist identity politics is that white people should engage in “allyship,” which to them means for well behaved white people to do whatever they’re told by the high priests of the disadvantaged, no matter how disingenuous or ridiculous. But a true ally would provide tough, genuine love, and tell the truth. Which is if you want to achieve in America, the most inclusive and tolerant nation in the history of the world, you have to work hard, stay sober, stay out of jail, keep your families intact, be thrifty, and hit the books.

That truth would unify and enrich this nation. And a unified and prosperous nation would mean less government, less government employees, and weaker public employee unions. We can’t have that now, can we?

REFERENCES

Race and voting in California: Public Policy Institute of California
http://www.ppic.org/content/pubs/jtf/JTF_RaceandVotingJTF.pdf

Class of 2017 SAT Results, College Board
https://reports.collegeboard.org/sat-suite-program-results/class-2017-results

California Demographics by Age and Ethnicity – University of California
https://www.universityofcalifornia.edu/infocenter/ca-demographics

Percentage of 2017 UC Admissions by Ethnicity – EdSource
https://edsource.org/2017/uc-admits-more-students-from-outside-california-but-officials-expect-more-state-residents-will-enroll/584321

Race gaps in SAT scores highlight inequality and hinder upward mobility – Brookings Institution
asdfasdfhttps://www.brookings.edu/research/race-gaps-in-sat-scores-highlight-inequality-and-hinder-upward-mobility/

Even With Affirmative Action, Blacks and Hispanics Are More Underrepresented at Top Colleges Than 35 Years Ago – New York Times
https://www.nytimes.com/interactive/2017/08/24/us/affirmative-action.html

Are We All Unconscious Racists? – City Journal
https://www.city-journal.org/html/are-we-all-unconscious-racists-15487.html

25 UC Retirees Receive Annual Pensions Exceeding $300,000

Twenty-five University of California retirees receive more than $300,000 annually in retirement,  the California Policy Center has learned. The information, contained in documents released to CPC through a public records request, comes amidst controversy over excessive compensation at the UC system and revelations of a secret slush fund at the system’s headquarters. CPC’s findings were broadcast by KPIX San Francisco and other CBS affiliates on May 5.

The highest paid pensioner is Professor Lewis L. Judd, a UC San Diego Psychiatry professor. He receives an annual pension of $385,765.

Lewis surpasses previous pension champion, Dr. Fawzy I. Fawzy, a UCLA Psychiatry Professor who retired in 2014 on a $354,469 annual pension. Assuming annual cost of living increases of 2%, Dr. Fawzy is now estimated to be receiving around $369,000 annually. But Fawzy also draws a UC salary, one of several hundred UC retirees brought back to teach after retiring. “Recalled” retirees, such as Fawzy, are eligible to draw both a salary and a pension. Fawzy’s total university income exceeded $650,000 in 2015.

Behind the shocking numbers is a six-month battle with university administrators who tried to block release of compensation. CPC Director of Policy Research Marc Joffe originally sent the UC president’s office a Public Records Act request for pension data in December 2016. After numerous delays and negotiations with CPC General Counsel Craig Alexander, the university released a limited amount of data to Joffe today. CPC made the request in connection with its 100k Pension Club project, a website database that contains a list of 50,000 retired California public sector employees who receive annual pensions greater than $100,000. That website is at http://www.100kclub.com.

Ultimately, UC provided a list of 2015 and 2016 retirees, eight of whom are receiving $300,000 or more. The remaining 17 names were included in UC’s previous pension disclosures, last updated for 2014. UC did not provide precise cost of living adjustments for each retiree. CPC estimated their current pensions by adding 2% per year since their date of retirement.

The complete list appears below:

 

Retiree Name Appointment Type Last Employer Annual Pension Benefit Date of Retirement
JUDD, LEWIS L Teaching Faculty San Diego $ 385,765 Jul 1, 2016
MATTHEWS, DENNIS L Non-Teaching Faculty Davis 370,880 2012
FAWZY, FAWZY I Teaching Faculty Los Angeles 368,790 2014
DE PAOLO, DONALD J Non-Teaching Faculty Lawrence Berkeley 359,922 Jul 1, 2016
HOLST, JAMES E. Staff Los Angeles 358,428 2006
RUDNICK, JOSEPH A Non-Teaching Faculty Los Angeles 344,925 Jul 1, 2016
VAZIRI, NOSRATOLA D Teaching Faculty Irvine 340,410 2011
GREENSPAN, JOHN S Teaching Faculty San Francisco 339,243 2014
GRAY, JOE W Non-Teaching Faculty Lawrence Berkeley 335,482 2011
SCHELBERT, HEINRICH R Teaching Faculty Los Angeles 333,247 2013
BRESLAUER, GEORGE W Non-Teaching Faculty Berkeley 328,476 2014
MARSHALL, LAWRENCE F Teaching Faculty San Diego 324,067 2010
KRUPNICK, JAMES T Non-Teaching Faculty Lawrence Berkeley 323,957 2012
DISAIA, PHILIP J Teaching Faculty Irvine 323,839 2010
GRUNSTEIN, MICHAEL Teaching Faculty Los Angeles 322,150 Jul 1, 2016
SIEFKIN, ALLAN D Non-Teaching Faculty Davis 322,101 2014
KENNEY, ERNEST B Teaching Faculty Los Angeles 320,608 2012
DARLING, BRUCE B. Non-Teaching Faculty Los Angeles 320,403 2012
DONALD, PAUL J. Teaching Faculty Davis 317,156 2011
CHERRY, JAMES D Non-Teaching Faculty Los Angeles 315,449 2013
ROLL, RICHARD W Non-Teaching Faculty Los Angeles 315,418 2014
TILLISCH, JAN H Non-Teaching Faculty Los Angeles 311,732 Aug 1, 2016
CYGAN, RALPH W Teaching Faculty Irvine 306,734 Jul 1, 2015
BRAFF, DAVID L Teaching Faculty San Diego 306,407 Feb 1, 2015
EISENBERG, MELVIN A Teaching Faculty Berkeley 305,012 Jan 1, 2015

How to Get Rich by Teaching at UC

They may not have won a Nobel Prize, but California taxpayers and students are awarding ten retired University of California professors an attractive consolation prize: pension benefits amounting to more than $300,000 each per year. Topping the list of UC pension beneficiaries is Fawzy I. Fawzy, M.D. a Professor of Psychiatry and Biobehavioral Sciences at UCLA. He received over $354,000 in 2014, an amount that will continue to grow each year with cost of living increases. Recently, Dr. Fawzy generously helped his junior colleagues by explaining their compensation and pension benefits in a lecture uploaded to YouTube. His knowledge of the ins and outs of the UC payroll and retirement systems is truly impressive.

Teamsters, Researchers Play Hunger Games with UC Contract Talks

Outside the headquarters of the University of California in Oakland, researchers Peter Dreier and Megan Bomba sat alongside two officials of Teamsters Local 2010. Behind them: signs that read “UC: Pay Workers Enough to LIVE.”

The Teamsters Local is negotiating with the university system over clerical and administrative support salaries. Part of the union’s campaign is to persuade outsiders that the UC’s hardest-working employees are going to bed hungry and likely showing up at work that way.

This explains the presence of Drier and Bomba, researchers at Occidental College’s Urban & Environmental Studies Institute. The pair had just finished Exhibit A in the Teamsters campaign, a study that finds a remarkable 70 percent of University of California clerical and support staff are “food insecure,” or lacking access to food at some point in a year.

That 70 percent finding is about 5.5 times the rate of food insecurity among all California households. This is even more remarkable because UC’s Clerical and Allied Services Unit earns 47 percent above the median Californian individual income ($46,583 vs. $31,587).

Beneath those extraordinary numbers are some elementary research problems. Drier and Bomba used an abbreviated six-question survey to measure food security rather than the 18-question survey the USDA recommends. According to the USDA, the six-question survey is “less precise and somewhat less reliable than 18-item measure” and “does not measure the most severe levels of food insecurity.”

The report’s methodology is troubling in other ways. The authors acknowledge that their 2,890 respondents volunteered to take the survey online. That raises the possibility that those who responded were overwhelmingly (and unscientifically) attracted by questions about hunger. That’s called “self-selection,” and there’s no evidence the researchers accounted for a non-random sample.

Translation: the shorter survey and self-selection may have biased the results to overreport food insecurity.

The Teamsters have used this sort of science to produce political findings before. A previous study requested by Teamsters Local 2010 from the Economic Policy Institute estimated that 93 percent of UC clerical workers do not earn enough to cover a basic family budget. The study was built on the assumption of a one-parent, one-child household, though it’s not clear that’s representative of UC clerical worker households.

Food insecurity is a real problem and the researchers correctly point out the negative effects it has on wellbeing. There is no doubt single-parent households face significant strain. But it is not clear why UC clerical workers suffer from food insecurity more than five times the average Californian while making above the individual median income. Studies that are methodologically flawed to overestimate the problem do a disservice to those who are actually going hungry.

If the study’s findings are correct, they raise a question the researchers did not ask: why can’t University of California support staff afford to eat? The answers may be related to other trends: the UC system has increased the number of high-paying administrative positions by 60 percent over the past decade. At the same time, UC students have seen an increase in tuition of over 200 percent since 2000. These hikes make college less affordable for students who, in a separate study, report high levels of food insecurity.

At least one UC official said the timing of Drier and Bomba’s report is suspicious, coming as it does during contract negotiations with Teamsters Local 2010. “I’m not surprised to see these kinds of things sort of planted, if you will, to affect the collective bargaining process,” said a university regent.

A recent California Policy Center study found that UC Berkeley’s pay distribution is more unequal than Haiti’s, the world’s most unequal country. Many administrators and professors make six-figure annual salaries, ironically including those in Cal’s Center for Equitable Growth.

Andrew Heritage is a California Policy Center fall Journalism Fellow. He is a doctoral student in political science at the Claremont Graduate University.

UC Berkeley’s ‘income inequality’ critics earn in top 2%

Scholars from the University of California at Berkeley have played a pivotal role in making income inequality a major political issue. But while they decry the inequities of the American capitalist system, Berkeley professors are near the top of a very lopsided income distribution prevailing at the nation’s leading public university.

Among the most prominent of these scholars is Robert Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley. Reich’s 2013 film, Inequality for All, is an indictment of a rigged U.S. economy that makes a select few richer while consigning the middle class to stagnation. A review of the film and Reich’s other work suggests that the economist and former Clinton-era Labor Secretary provided numerous talking points for Bernie Sanders’ high-profile – though ultimately unsuccessful – presidential campaign.

While Reich helped popularize the income inequality theme, much of the intellectual heavy lifting has been done by UC Berkeley economist Edward Saez and his colleagues at the university’s Center for Equitable Growth (CEG). Saez has been researching income inequality since 2003, when he co-authored a paper on the topic with Thomas Piketty, the French economist whose book Capital in the Twenty-First Century also played a key role in popularizing the income inequality issue. The pair continue to collaborate.

Since these Berkeley academics preaches, we wondered whether the university community also practices greater equality. To answer this question, we examined distributional equity at the university, relying on publicly available data.

Statistical Comparisons of Inequality

Social science researchers often measure income inequality with the Gini Coefficient – a calculated value that can range between zero and one. The higher the Gini Coefficient, the more unequal the country, municipality or community. If everyone in a population has exactly the same income, that group’s Gini Coefficient is zero.  By contrast, if one individual receives all of a community’s income (and everyone else receives nothing), the Gini Coefficient is 1.

According to World Bank statistics, the average country had a Gini Coefficient of around 0.36 in 2012, when data for 68 countries were available. In 2013, the coefficient for the U.S. was 0.4106 – roughly the same as it was under Bill Clinton in 1997. The country with the lowest reported Gini was Ukraine (at 0.2474) and the highest was Haiti (at 0.6079). Scandinavian countries are among the most equal (between 0.26 and 0.29), while Latin American nations dominate the high Gini countries (with several over 0.50).

Within the United States, the Census Bureau reports Gini coefficients for over 500 cities.  The latest data available are for 2014. The city of Berkeley’s Gini score of 0.5356 places it in the top 5% of U.S. cities for income inequality. In California, it ranks third of 133 – behind Davis (another city dominated by a UC campus) and Los Angeles. Internationally, city of Berkeley’s score is virtually identical to that of Colombia.

Public employee compensation data allows us to measure income inequality on campus. The State Controller’s Public Pay database contains salaries for all UC employees, indicating which campus each employee is on. The Gini coefficient for the 35,000 UC Berkeley employees in the data set is 0.6600 – higher than that of Haiti.

Getting Rich from Researching and Critiquing Inequality

Income inequality at Cal extends to the university’s inequality research arm, the Center for Equitable Growth mentioned earlier. According to 2014 data from Transparent California, Center Director Emmanuel Saez received total wages of $349,350. Its three advisory board members are also highly compensated Cal professors: David Card (making $336,367 in 2014), Gerard Roland ($304,608) and Alan Auerbach ($291,782). Aside from their high wages, all four professors are eligible for a defined-benefit pension equal to 2.5% times final average salary times number of years employed. It is also worth noting that all four are in the top 2% of UC Berkeley’s salary distribution, and that Saez is in the top 1%. It could be that an effective researcher has to know his or her subject: thus to the study the top 1%, we suppose one has to be in the top 1%.

Pricey Textbook

BOOK CLUB: Cal economics students are pounded by high-priced textbooks.

Robert Reich receives somewhat lower compensation than the four CEG economists, collecting $263,592 in pay during 2014. But Reich’s salary was likely not his only source of income in 2014. Reich makes himself available to give paid speeches through a number of speaking bureaus, charging a fee estimated at $40,000 per talk. He is also likely to receive some income from his books, movies and pensions from previous employers.

Reich is not the only senior academic who can avail himself of significant income aside from that provided by his university employer. Because teaching and publication demands on tenured professors are relatively modest, there’s time to earn extra income from consulting and writing textbooks. The latter can be surprisingly lucrative, since many college textbooks sell for over $200 per copy. Last September, the Cal bookstore offered an introductory economics textbook for $294. Lucrative opportunities to supplement one’s income with consulting fees and royalties are typically unavailable to a college’s administrative staff.

Highly Paid Coaches and Administrators

Aside from tenured professors, UC Berkeley also provides generous compensation for athletic coaches and administrators. The highest paid UC Berkeley employee in 2014 was Daniel Dykes who received $1,805,400 for coaching the California Golden Bears football team, which went 5-7 that year and did not make a bowl appearance. Dykes was followed closely by Jeff Tedford (at $1,800,000), the Bears’ former coach who was still on the payroll in 2014 despite having been relieved of his coaching responsibilities. The next five highest paid UC Berkeley employees were also coaches.

UC Berkeley Chancellor Nicholas Dirks was paid $532,226 in 2014, but a unique perk substantially boosted his effective compensation.

Dirks House

HE BUILT A WALL AND YOU PAID FOR IT: Chancellor Dirks’ residence with new $700k fence.

Like all UC Chancellors, Dirks is provided with a free residence. According to the San Francisco Chronicle, University House – now occupied by Dirks – contains 15,850 square feet of living and meeting space. Living on campus has not been an unalloyed benefit for Chancellor Dirks, however. The home has been attacked on numerous occasions by student activists. In response, the university recently completed a metal fence around the home at a cost of $699,000 – two and a half times over budget.

Dirks’ cash compensation was slightly lower than that of former UC President Mark Yudof, who co-instructed one class at Cal’s Law School in 2014, receiving $546,057 for his time. According to the Sacramento Bee, “Yudof benefited from a UC policy that allows high-ranking administrators to receive a year of pay if they are preparing to teach again.” After stepping down as president, Yudof took a one-year sabbatical, co-taught one class in Fall 2014 and another in Spring 2015, and then retired.

Tenured faculty and administrators at Cal have also been shielded from harsh discipline, even when they engage in sexual harassment. According to a recent report in the San Jose Mercury News:

Astronomer Geoff Marcy received a warning last year despite the university’s finding that he had serially harassed students over nearly a decade. Former law school dean Sujit Choudhry received a 10 percent pay cut but was initially allowed to keep his position after he was found to have sexually harassed his executive assistant. And former Vice Chancellor Graham Fleming — who stepped down last April amid allegations he had sexually harassed a staff member — quickly landed an administrative job as ambassador for UC Berkeley’s new Global Campus, a satellite campus in Richmond.

The three Cal employees cited received generous compensation in 2014. Marcy collected $217,861; Choudhry made $472,917 and Fleming received $404,625. More recently, Berkeley has taken stronger disciplinary measures in response to media attention and pressure from UC’s system President Janet Napolitano. Fleming was fired and Choudhry resigned in March.

Life for the Other 99%

High compensation for tenured faculty does not necessarily come with a heavy teaching workload. Instead, most of the teaching burden appears to fall on junior faculty and teaching assistants.

Introductory classes at UC Berkeley often have several hundred students. Although a faculty member gives the lectures and designs the syllabus, students functioning as teaching assistants, readers and graders handle most live interaction with course participants, review their homework and score their exams. Students fulfilling these roles may be in a graduate program, but are often juniors or seniors.

In Fall 2013, Cal’s Intro to Computer Science – CS 61A – had 1,098 registered students, exceeding the capacity of the lecture hall. The assistant professor conducting the course, John DeNero, recorded lecture videos for those who could not fit into the room. He told the student newspaper: “Almost all of the learning in computer science courses happens in the lab and when they’re working on projects. So if you don’t fit in the room, you can definitely still participate in all the important parts of the course.” Students taking the class had access to 19 teaching assistants and 15 readers. DeNero was paid $46,643 in 2014 – likely exceeding the amounts paid to the enormous assistant and reading staff who now receive around $14 per hour. Thus, one of the university’s most important services – orienting new students to the fast-growing field of computer science – was delivered by poorly paid staff, without any input from its highly compensated senior faculty.

Although the City of Berkeley has a higher minimum wage than the rest of the state, Cal is exempt from this municipal minimum. In late 2014, The East Bay Express reported that the university was paying hundreds of student workers less than the $10 per hour city minimum.  More recently, the university implemented a UC-wide Fair Wage/Fair Work Plan under which the minimum wage rose to $13 per hour in October 2015 with subsequent increases to $14 per hour in October 2016 and $15 per hour in October 2017. It should be noted that, unlike other minimum wage requirements, UC’s minimums apply only to employees working more than 20 hours per week, so it is possible that some student workers will remain below the City of Berkeley minimum, currently set at $12.53.

It is difficult to assess how little of the teaching burden falls on the shoulders of tenured faculty.  The University of California’s Annual Accountability Report (covering all 10 UC campuses) indicates that most instruction is provided by “full-time permanent faculty.” This designation includes assistant and associate professors who have yet to obtain tenure. Further, the university employs a misleading metric for reporting relative instructional burdens between full-time permanent faculty, lecturers, visitors, adjuncts and others. Teaching loads are shown in “student credit hours (SCH),” which is the number of students enrolled in a given course times the number of credits earned from that course. If a permanent faculty member gives the lectures for a 4-credit course attended by 1000 students, 4000 SCH are added to the full-time permanent faculty total even though most instructional activities in the course are performed by juniors, seniors and graduate students.

Relatively low-paid and heavily worked staff also keep many of Cal’s core functions running. Administrative staff faced a round of layoffs in 2011 and are now undergoing a further workforce reduction despite increasing enrollment numbers. Meanwhile, unrepresented staff (those not unionized) have seen minimal salary growth in recent years. Although administrative tasks – such as managing financial aid applications, administering grants applications and maintaining university software platforms – may seem less glamorous than research, individuals performing these functions often work much harder than tenured faculty while earning far less.

Conclusion

The University of California at Berkeley has a great reputation, and the school continues to earn its high standing with a mixture of world-class scholars, outstanding students and (at least some) great facilities.

To attract excellent academics and administrators, the university must offer competitive compensation packages. In some cases, these packages will draw truly outstanding people who go on to do excellent work for the university. In other instances, these packages amount to sinecures enabling high-status individuals to receive compensation disproportionate to their contributions.

In this respect, Cal is no different from a large, publicly held corporation. Companies offer big salaries to CEOs and other high-level professionals, sometimes getting their money’s worth and other times not. Just as it isn’t reasonable to expect a tenured professor or senior administrator to be paid in line with entry-level employees, we shouldn’t expect senior university administrators and tenured professors to be paid the same as work-study students.

While it is true that the compensation ratios between the highest- and lowest-paid employees are greater at many large corporations than at universities, there is an offsetting consideration. A very large portion of compensation at UC Berkeley and other public universities is paid by federal and state taxpayers through grants and financial aid. This is not the case for private companies – at least those that don’t sell to the government.

The hefty salaries and generous pensions awarded to Berkeley administrators, professors and coaches are funded by taxpayers – most of whom earn far less than these academic luminaries. So if UC Berkeley economists are really opposed to income inequality and are concerned about low-paid workers, they might consider sharing some of their compensation with the teaching assistants, graders, readers and administrative staff at the bottom of Cal’s income distribution.

We’re not saying income inequality is a bad thing; we’re not saying that Reich, Saez and other Berkeley professors should make less than they do, or that student teachers ought to make much, much more. In fact, there are reasonable arguments that income inequality is not only inevitable and even ethical, but that it’s also a generally positive feature of advanced economies.

We are saying there’s something unusual in the Berkeley phenomenon – the high-profile role of high-income earners in criticizing income inequality.

ABOUT THE AUTHOR
Study author Marc Joffe is the founder of Public Sector Credit Solutions and a policy analyst with the California Policy Center. Joffe founded Public Sector Credit Solutions in 2011 to educate policymakers, investors and citizens about government credit risk. PSCS research has been published by the California State Treasurer’s Office, the Mercatus Center and the Macdonald-Laurier Institute among others. Before starting PSCS, Marc was a senior director at Moody’s Analytics. He earned his MBA from New York University and his MPA from San Francisco State University.

ABOUT THE CALIFORNIA POLICY CENTER
The California Policy Center is a non-partisan public policy think tank providing information that elevates the public dialogue on vital issues facing Californians, with the goal of helping to foster constructive progress towards more equitable and sustainable management of California’s public institutions. Learn more at CaliforniaPolicyCenter.org.

 

University of California Hikes Tuition to Fund Soaring Pensions of up to $350,000 a Year

The University of California (UC) is implementing major changes to their retirement system to address its $12.1 billion unfunded liability, which has been cited as the driving factor behind recent tuition hikes.

The proposed changes include a cap on pension benefits and the possibility of offering a 401(k) defined contribution plan to new hires.

Looking at how UC got here is instructive. In 1990, the plan enjoyed a healthy funded ratio of roughly 135%. The decision was then made to stop making any contributions – employee and employer – and rely on investment earnings to keep the fund afloat going forward.

This continued for two decades. UC only resumed contributions in 2010 when over $6 billion in unfunded liabilities had accumulated and the plan was heading towards ruin, should they fail to act.

The fiscal irresponsibility, first in suspending contributions, and then failing to reinstate them until the very last moment, is staggering. As Moody’s declared, “employee and employer contributions are the bedrock of any defined benefit pension plan.” The American Academy of Actuaries (AAA) concurs, noting that contributions “should actually be contributed to the plan by the sponsor on a consistent basis.”

It should be noted that the spectacular decline in the health of UC’s retirement system occurred despite UC realizing an average annual investment return of 9% over those same 20 years, significantly higher than their assumed 7.5% annual return. Clearly, Moody’s and the AAA understand what is needed to keep pension systems in sound financial shape, while public pensions’ emphasis on investment returns over annual contributions is fundamentally flawed.

So why did UC behave so recklessly? Quite simply, public institutions have the exact opposite incentives necessary to manage a defined benefit system appropriately. The decision makers who authorized the funding holiday in 1990 are all long gone, and none of them will bear any of the cost for their actions. In fact, they all directly benefited from their profound mistakes.

UC regents and plan trustees, all being members of the retirement plan themselves, all saw their take home pay immediately rise as a result of their contributions dropping to 0%. Further, UC administrators saw millions of dollars flow back into their general budget, no longer designated for funding the retirement system.

Pete Constant, Senior Fellow at the Reason Foundation, finds that public pension systems are “actually a perverse system in which there is a win for the entire membership when pension board trustees are wrong!”

He notes that, “The risk associated with not meeting actuarial assumptions is borne entirely by the taxpayers…unfunded liabilities are generally amortized over long periods of time, spreading the associated costs across generations.”

This point is driven home by looking at the several recent UC retirees who are collecting base pensions of over $300,000 a year for life. While these former UC employees were fortunate enough to pay nothing, for at least 20 years of their careers, for such lucrative pensions, the cost is now being borne by an entirely new generation of students and taxpayers.

Further, current UC employees have seen their annual contributions rise dramatically, and new hires will be under a substantially reduced pension system themselves. In short, virtually everyone but the employee who received the benefits, or those who received that employee’s services, are now paying the cost.

UC’s decision to consider shifting new hires to a defined contribution plan is long overdue. In addition to the perverse management incentives and issues of intergenerational inequity outlined above, a shift to defined contribution plans would eliminate the long term liability to taxpayers, while offering greater flexibility and portability to employees.

As UC President Janet Napolitano said, “Pension reform needs to happen. It’s the responsible thing to do.”

Robert Fellner is the Director of Transparency Research at the California Policy Center.

When Teachers Unions Attack

Coca Cola, Teach For America, Walmart and banks are the latest targets of Big Labor.

Attempting to get over the millions of dollars they spent backing losers in the November election, America’s teachers unions are on a mission to find new bogeymen. First victim: Coca Cola. Yup, the American Federation of Teachers has adopted a resolution which claims that “three general secretaries of the union representing Coca-Cola workers in Guatemala City and five workers were killed, and four more workers were kidnapped.” (To read the rest of the pathetic guilt-by-association allegations, go here.) But the real reason the union is pillorying our national soft drink is because “Coca-Cola circumvents its own code of conduct by hiring workers through subcontracting rather than hiring permanent employees.”

There it is. AFT’s real gripe is that Coke is hiring non-union workers. (Rumors that the union went after Coke because it thought that the company was owned by those two evil brothers from Kansas are unfounded.)

As The Daily Caller’s Eric Owens points out,” The anti-Coke gambit is the latest in a bizarro month even by the standards of America’s teachers unions.”

While AFT is busy defaming Coke, the National Education Association has been focusing on student debt, and recently kicked off a “Degrees Not Debt Week of Action.” Of course, what the union doesn’t mention is that in order to get potential teachers and other college grads off the hook, the beleaguered taxpayers would have to assume the debt. The union also neglects to acknowledge that organized labor has played an important role in the escalating costs of getting a college degree. Referring to the University of California, Jon Coupal points out that the driving force behind tuition hikes is the growing unfunded liability of pension funds and “other items of questionable compensation for unionized faculty.” Coupal quotes Wall Street Journals Allysia Finley,

UCs this year needed to spend an additional $73 million on pensions, $30 million on faculty bonuses, $24 million on health benefits and $16 million on collectively bargained pay increases. The regents project that they will require $250 million more next year to finance increased compensation and benefit costs.

Ms. Napolitano [President of the University of California] says that the UCs have cut their budgets to the bone, yet her own office includes nearly 2,000 employees—a quarter of whom make six-figure salaries. An associate vice president of federal government relations earns $273,375 a year, plus $55,857 in retirement and health benefits, according to the state controller’s office.  Thirty professors at UC Santa Cruz rake in more than $200,000 in pay, and most faculty can retire at 60 and receive a pension equal to 75% of their final salary. More than 2,100 retirees in the university retirement system collected six-figure pensions in 2011.

At the same time the teachers unions are trying to shaft the taxpayer, they pretend to really, really care about the little guy. In a press release, AFT accuses Wall Street of “costing schools, municipalities billions.” The union’s hellfire-and-brimstone document informs us that banks took advantage of poor lil’ ol’ educators by charging interest on money they never should have had to borrow in the first place. (Okay, I added that last part.) Never one to mince words, Chicago Teacher Union president (and member in good standing of the International Socialist Organization) Jesse Sharkey proclaimed, “The banks owe us a rebate of hundreds of millions of dollars, which we should invest in 50 sustainable community schools with robust wraparound services, restorative justice programs, low class sizes and sufficient staffing levels.”

Despite Mr. Sharkey’s attempts to wage class warfare, there is absolutely no evidence that the banks are guilty of anything but doing legal business. But why let the truth get in the way of a good Marxist narrative?

And then there is the AFT’s embrace of “United Students Against Sweatshops.” (Yes, Virginia, there really is such a loopy organization, and its biggest funder is AFT. USAS deserves a post of its own which I will get to in the near future.)  With chapters all over the country, the apparent raison d’être of the USAS Harvard franchise is to drive Teach For America into the sea. Why? Because TFA, which places idealistic young teachers in tough-to-staff schools, takes funding from the Walton Foundation, which of course is the philanthropic arm of Walmart, which, according to USAS, is trying to privatize public education, which it shouldn’t do because it will cost the teachers unions countless members, which will destroy their bottom line… or something like that.

The common thread running through the latest teachers union gambits is a strong animosity toward the American way of doing business, especially when it interferes with their hegemony. They are anti-capitalist – never mind that capitalism has been the driving force in cutting world poverty in half over the last 20 years – and pro-socialism, which strives for equality, even though people who live under such a system are equally miserable. But the unions, which took a real thumping on Election Day, may be overplaying their hand. It seems that the citizenry has figured out that the teachers unions provide no good solutions. Indeed, they’re an integral part of many of the educational and fiscal problems we face today.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

Affordable Tuition vs. Gargantuan Pensions for Unionized Faculty

Californians have abysmally low levels of civic engagement as evidenced by the recent election where voter turnout set an historic low.  And the widespread disengagement of California’s younger voters is even worse.

True, in 2008 California’s youth turned out in large numbers to elect Barack Obama as President.  And in 2012 they turned out again because, in addition to Obama being up for reelection, Proposition 30 was on the ballot.  Proposition 30, which gave California the highest income tax rate and highest state sales tax rate in America was, ironically, entitled Temporary Taxes to Fund Education.

During the Proposition 30 campaign, Governor Brown traveled to several university campuses to push the massive tax hike promising that passage would prevent tuition hikes. California’s college students, being as gullible as they are idealistic, believed the promise hook, line and sinker.  So much for critical thinking.

But perhaps California’s younger voters are finally getting wise to all the broken promises of tax-and-spend politicians and that might explain, in part, why they stayed home in this last election.  And sure enough, their increasing cynicism is proving to be well founded.

Despite the massive tax hikes ostensibly to keep higher education affordable, the University of California Board of Regents just announced a sizable increase in tuition.  And UC students are none too happy.

Turns out that the driving force behind these hikes is the growing unfunded liability of UC’s pension fund and other items of questionable compensation.  Allysia Finley with the Wall Street Journal explains:  “UCs this year needed to spend an additional $73 million on pensions, $30 million on faculty bonuses, $24 million on health benefits and $16 million on collectively bargained pay increases. The regents project that they will require $250 million more next year to finance increased compensation and benefit costs.”

Moreover, Finley reveals the extraordinary level of waste in the UC system:  “Ms. Napolitano [President of the University of California] says that the UCs have cut their budgets to the bone, yet her own office includes nearly 2,000 employees—a quarter of whom make six-figure salaries. An associate vice president of federal government relations earns $273,375 a year, plus $55,857 in retirement and health benefits, according to the state controller’s office.  Thirty professors at UC Santa Cruz rake in more than $200,000 in pay, and most faculty can retire at 60 and receive a pension equal to 75% of their final salary. More than 2,100 retirees in the university retirement system collected six-figure pensions in 2011.”

At the moment, the outrage expressed by students in their protests – one of which resulted in a shattered glass door outside a meeting of the UC Regents – seems a bit unfocused.  They’re angry but, aside from the mere fact that their education costs are rising, many are not clear about the causes.

In a weird way, UC’s pension crisis might be the ultimate teachable moment for college students who typically have little grasp of anything related to public finance.

So, students, here’s the scoop:  There’s no such thing as a free lunch.  Public employee compensation is expensive; especially pension costs that you will be paying long after those of us who are older are long gone.  Government waste, fraud and abuse in California is a real problem.  Those who pay taxes – a lot of taxes – have choices where to live and move their businesses – and that may not be in California.  Debt means future costs.  You might like the idea of High Speed Rail but you might want to study both the costs and viability of any megaproject before you hop on board.

And finally, don’t buy into any promise by any politician about what they are going to do for you without first figuring out what they are going to do to you.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Union Friendly National Security Bureaucrat Picked to Head University of California

With its 10 campuses, nearly 200,000 staff, and $20 billion annual budget, the University of California system is emblematic of the state government that pays a portion of its bills – enormous, unruly, overly expensive, steeped in politics, dominated by unions and other special-interest groups, and plagued with controversy.

California voters in 2010 turned the reins of the California government over to Jerry Brown, who has – despite his whimsical rhetoric – governed as the ultimate status-quo politician who has protected the state bureaucracy from reform.

Likewise, the UC regents have decided to choose a status-quo candidate as its newest president, as Department of Homeland Security Secretary Janet Napolitano gets the nomination. UC Regent Sherry Lansing said in a statement that some might find Napolitano to be an “unconventional choice,” but that’s nonsense. Napolitano is as conventional of a choice as one might have to run a large bureaucracy even if she has no serious academic experience.

Based on her tenure in the federal government, she will be an advocate for higher spending, for expanded unionization, and for more of everything that has turned the current university system into such a bureaucratic, scandal-plagued mess.

Just when the system needed a reformer who might implement competitive reforms and focus on cost-cutting, the system turns to a Washington insider more apt to keep federal funds flowing and student aid primed than to stretch the large budget already there.

The University of California has been embroiled in so many grotesque scandals in recent years. In one pay scandal, administrators enriched themselves and even their friends and lovers even as they were hiking tuition rates for students.

According to a 2010 article in the Bay Citizen, when outgoing President Mark Yudof took the helm amid a financial crisis, he “moved with his wife into a 10,000-square-foot, four-story house with 16 rooms, 8 bathrooms and panoramic views.” It cost UC more than $13,000 a month. While Yudof is credited for reducing the system’s massive pension problems, he was widely criticized for significantly increasing the living standards of UC leaders and for imposing large tuition hikes on students while he spent his time lobbying at the Capitol for more money.

One of the threads of the UC scandals is the sense of privilege and elitism expressed by those who run it combined with their desire to access more taxpayer cash and evade accountability. The Yudof situation came after a 2007 scandal, in which “UC President Robert Dynes and the governing Board of Regents have handed out more than $1 million in extra pay and perks to about 70 top executives,” according to the San Francisco Chronicle.

The university system has even struggled with ethical problems involving doctors accused of performing unauthorized brain research on dying patients and UC fertility doctors who used stolen eggs and embryos. Nightmarish things happen at big institutions, but the University of California system seems to endure more of these things than other large universities.

Instead of seeking a forward-looking, market-oriented reformer, UC officials pretend that nothing is amiss and pick an old-school voice. The Sacramento Bee noted that Napolitano’s selection “marks shift from academia to politics.” That’s almost right. UC has always been deeply involved in politics, but now it dispenses with the veneer of academic priorities.

As Republican Assemblyman Tim Donnelly of Hesperia put it, “After failing to secure the border, ignoring the Fast and Furious scandal that killed one of the agents serving under her command, and leading the invasive and ineffective Transportation Security Administration, it’s honestly hard to imagine what Janet Napolitano thinks she can do for California’s UC system.”

He’s missing the point. Napolitano will do nothing for UC, which is why she was chosen. She will handle UC’s problems in the same way she handled the scandals that came under her department in the federal government. She will dodge, weave, stonewall and attack critics and yammer for more money.

That’s why the UC establishment is so thrilled to have her. And it’s why Napolitano and the UC leadership – not to mention the state’s Democratic leaders – have not said anything of substance about the university’s problems as they announced this selection. According to all the speeches, this is about Napolitano being an incredible leader whose love of education will help her lead an even more incredible institution.

It’s also Orwellian to have someone with Big Sis’s authoritarian background running an educational institution that is supposed to value open debate and free speech.U.S. Rep. Doug LaMalfa, R-Richvale, touched on Napolitano’s “poor record on civil liberties and government transparency” and expressed fears about her “authoritarian management style.”

His points about civil liberties are well taken given the UC system’s own problems on that front after a UC-Davis police officer nonchalantly pepper-sprayed park-squatting students and Occupy protesters in 2011. The officer no longer works for the university, but UC was less than forceful in the way it handled this matter.

If the system were looking for someone to maintain the status quo, it would have been better to at least have selected an accomplished educator. Napolitano is the worst of all worlds, which is bad news for taxpayers, students and the state of California.

Steven Greenhut is the California columnist for the San Diego Union-Tribune.