Higher Education Needs a Dialogue with the 99%

Higher education is at a crossroads, not only in the U.S. but also globally. This challenge is prompting an immigrant union, on the centennial anniversary of the “Bread and Roses” strike at Lawrence Mills, to once again take up the labor movement’s historic role of speaking for the common good and the broad interests of working people.

Service Employees International Union (SEIU) Local 615 represents 18,000 property service workers in Massachusetts and Rhode Island, 5,000 of whom are employed in 48 colleges and universities as janitors, trades people, food service and security workers. (Nationally, SEIU represents 75,000 members in both public and private nonprofit higher education institutions, 10,000 of whom are adjunct faculty.)

Why we have joined this debate

“Why in the world does a custodial union care about higher education policy?” I hear this question from friends in the labor movement as well as from administrators, professors and others. Until now, labor associations representing academics, like the American Association of University Professors (AAUP), have been the most prominent labor voices addressing national educational policy. So why is a blue-collar union speaking up—what are our goals in addressing issues such as financial transparency, endowment investment, executive compensation and board conflicts of interest?

The answer to this question has two parts. First, our union cares because higher education is one of the few remaining paths for working people to secure a decent future for their children. It never has been an absolute guarantee of economic success, as most recent graduates have learned—but it is a chance. Our members still believe in education as a path to personal fulfillment and economic security, and like other parents, many of them struggle to pay the rising costs of tuition. Today, a growing number of parents lose that struggle.

I recently led contract negotiations at a major university. Management told our committee that we shouldn’t expect much of a raise since “tuition can’t go up forever.” In our caucus discussion, I was surprised at how deeply our committee—made up of custodians and electricians, grounds workers and plumbers—identified with the parents of the college students. Returning to negotiations, we agreed to accept management’s low wage offer in return for a freeze on tuition and fees. Of course, the university rejected that offer; but the workers did identify with and support the parents.

Second, our union cares because colleges and universities, at least in New England, have historically been some of the last outposts for good jobs and a hedge against recession. Of course, there are plenty of bad jobs at education institutions—service “Mc-jobs” that pay $8.50 an hour with no benefits and low-paid adjunct professors living on food stamps—but among all our members employed in the service sector, those who work in universities have tended to be better paid and to have benefits.

This is changing. Through our long experience in negotiating private-sector contracts both inside and outside higher education institutions, we’ve learned to recognize trends, and right now, there is an undeniable trajectory toward bad jobs in higher education. Increasingly, the higher education system relies on part-time, no-benefit, low-wage workers, whether direct or contracted-out, whether adjunct faculty or service personnel. These jobs cannot sustain families or communities.

The current situation is untenable for colleges and universities, for their employees, and for our communities.  In Squeeze Play 2010, a poll conducted by Public Agenda, noted that “6 out of 10 Americans believe that colleges today operate more like a business, focused more on the bottom line than the educational experience of students” and that the public is becoming “more frustrated with higher education.”

Keeping an eye on the public mission?

We have to reaffirm this social compact in whatever community we find ourselves. The social compact is what has allowed U.S. higher education to thrive for the past 100 years. If we want to be global and national, we have to be local. We need to be more in tune with the needs expressed to us than we have been. That is where I see our real opportunity: rebuilding our social compact.

—Joseph Aoun, president of Northeastern University, Colloquium 2012

A great deal of ink has been spilled about the social compact between schools and the public. In fact, some authors prophesize dire consequences if nonprofit colleges and universities continue to ignore it. Despite these warnings, higher education’s public mission is getting short shrift. Management has replaced leadership, the profit motive rules in most nonprofit institutions, speculation has supplanted stewardship, and the business cycle trumps stability.

The social compact—whereby the public collaborates with higher educational institutions for mutual benefit—is being shredded and replaced with the private benefit model that claims that the individual student, and not society, is the primary beneficiary of an education. This selective focus on individual responsibility has led to disinvestment by the state and the creation of a system that either favors the wealthy or leads to unsustainable personal debt. Now students and their families will bear the lion’s share of education’s cost. Of course, not every college is exactly the same: Some educational leaders and institutions struggle valiantly to preserve a semblance of public mission, but they are swimming against the tide.

Recently, I had dinner with a friend who is a professor. Although he makes approximately $125,000 a year as a department head, he had to eliminate his pension savings to pay his son’s college tuition because he is the sole earner in the household. Now he must continue working, even though he’d like to retire and open a position for a younger professor. When I told him that colleges regularly give golden parachutes (such as multimillion-dollar “exit” and compensation packages or no-interest mortgages) to their senior executives, athletic directors, financial managers and the like, he exploded in anger. This revelation triggered his latent suspicion about exactly whom higher education is now serving. Many other Americans have this same anger at an educational system that turns its back on them—that is, on the public mission—while enriching those who least need more riches.

Enter the business culture

Suffolk has gone through a transition. This is a new chapter in the history of the university. We need people who understand that running an institution of higher education today means running a business.

—Andrew Meyer, board chairman, Suffolk University

As more college and university board members are drawn from Big Business and Wall Street,[1] they bring their corporate culture—one of short-term thinking and short-term gain.

I am not arguing against managing resources effectively, but rather, against the growing practice at education nonprofits to embrace money over mission when there is a choice.

Take the example of Harvard University, which suffered a large endowment loss during the 2008-09 crash, equal to 30% of its endowment. Despite these losses, Harvard still had $27 billion remaining in its endowment, and three years later had $31 billion.  In this situation, the university had a choice. It could have weathered the financial storm and pulled the campus together but instead it decided to pull the campus apart. It created a new position of Executive VP, recruited Edward Forst a former VP of Goldman Sachs to oversee a massive reduction in force, and set about cost-shifting endowment losses onto its staff. Three years later, it is still reducing staff.  The example of Harvard may be extreme but it was not atypical, according to a 2010 working paper by the National Bureau of Economic Research.

We should keep in mind that the charitable mission of schools is the enhancement of the public good through education, research and economic sustainability, not the largest possible dividends for stockholders.

Several Boston-area college managers, human resource and operations staff—professionals who are responsible for the day-to-day functioning of these institutions—complain to me that their opinions are no longer valued by the top administrators. Control of all aspects of college life is increasingly the exclusive province of “financial people,” or of executives who surround themselves with financial people. Under the banner of “efficiency” in 2008–09, thousands of long-term, staff were laid off, furloughed or bought out amid terrible financial times and a toxic job market, adversely affecting their lives and short-staffing the institutions. At colleges with endowments, finances have largely recovered, but cutbacks made during the downturn have generally not been reversed.

Higher education’s executive officers and boards are largely unaccountable for their decisions to anyone other than small, self-perpetuating—and often secretive—groups. One small example: In April 2012, several Northeastern University students—following their written request to find out how the school was investing its money—met with the university’s VP/CFO and its treasurer and director of finance. Investment decisions can have wide-ranging, negative impacts on both students and staff. Not only did they come away empty-handed, but the officers wouldn’t even reveal the names of the trustees who sat on the investment subcommittee. Private nonprofits are actually less transparent about their decision making than publicly traded for-profits.

Financial gains accumulated by putting schools’ endowments on the roulette table of ”alternative” investments have gone, for the most part, into a competitive arms race between institutions for status and power. The appetite for new buildings—campus centers (with climbing walls, as the favorite example goes), luxury dorms, technology transfer centers—seems bottomless; and the construction debt is passed on to the students in the form of higher tuition. Some colleges will lose this race; consolidation among nonprofit schools will lead to fewer, costlier options. As tuitions continue to rise, the lure of revenue will draw more for-profit enterprises into the “education market”—enterprises with little pretense of fulfilling any public mission.

Ensuring the common good

Despite all the fine words about “social compact,” leaders of many New England colleges blissfully stay their course, dismissive of the growing populist anger, convinced of their invulnerability, and secure in their relationships with rich donors (aka, the 1%).

Colleges and universities remain critically important to a free society and to the health of the communities in which they reside. But, increasingly, our nation is losing faith in the direction of higher education. Once seen as the best way to realize the American dream of upward mobility—a mission willingly supported by taxpayers—a college education now appears to be out of the economic reach of many Americans, and is growing more so every year.

We can feel the political tide turning against nonprofit schools with the rise of for-profits, student unrest over loan debt, parental anger over tuition, taxpayer and congressional questioning of subsidies to those schools. We believe our colleges and universities need to refocus on their public mission and the common good. To do this, they must start talking to the 99%. And that’s where the rest of us come in.

A wide range of stakeholders—faculty, staff, administration, labor, students, alumni, parents, community—must join together in an honest but hard dialogue to forge an invigorated social compact. This dialogue will be meaningless without genuine transparency and accountability for all stakeholders. We must engage with each other to discern what it would take to restore trust in our higher education institutions and to rebuild a shared vision for our joint future.

Service unions have the experience and skills to build broad alliances capable of supporting higher education institutions in the fulfillment of their educational and public missions. We can use those skills and resources in the service of the common good and to guarantee a system of higher education that promotes a strong public mission.

Starting now, we must work together to ensure all our futures. Our children, our communities and our nation depend upon it.

Wayne M. Langley is director of the Higher Education Division with the Service Employees International Union (SEIU) Local 615 www.seiu615.org.