Friday, April 4, 2014

The Political Economy of the University of California

This week, Graduate Student Instructors at the University of California were on strike for two days.  Some cancelled class, and others chose to discuss matters behind the strike, all in the hopes of raising awareness of the issues surrounding our disagreement with University administration.  This lengthy post might be of interest for those concerned about or interested in the crisis that the UC faces. 

The union’s strike was dealing with unfair labour practises.  One of the union’s primary contentions is that class sizes are too large to enable GSIs to effectively do their job for the hours we are supposed to spend and the compensation we receive.  As things stand, departments and academic units set their own ceilings on section sizes, and in some cases sections are very large.  UC disagrees that this is a matter for collective bargaining, and at one meeting suggested that good teachers should be equally effective irrespective of class size, despite much empirical evidence suggesting otherwise. 

Moreover, UC administration stands accused of intimidation during negotiations.  Some specific instances of illegal behaviour by UC range from administrators encouraging department chairs at Berkeley to mislead graduate students about the legality of strike action; administrators threatening to revoke the visas of international graduate students at UCLA if they participated in a strike; and campus police filming Berkeley negotiators during the negotiating processes.  Each of these instances is a violation of labour law.

So at one level, there is a basic disagreement about what makes for a good undergraduate education and the relationship between class sizes and the quality of that education; as well as a disagreement about the rights of the student workers who do a very large amount of teaching on campus.

But why is there this struggle for resources on campus?  Why are those resources so scarce?  What is the relationship between the scarcity of these resources and the tuition students pay, the difficulty students might have in securing classes, and the education students receive?

A UC education was not always expensive.  In fact, it used to be free.

Founded in 1868 as a merger between the state’s first land grant institution and the private College of California, the University of California was designed to provide a practical education in agriculture, mining, and the liberal arts to the children of the state’s elites.  From the beginning it was connected to our state’s economy, and well-being of our society.

The aftermath of the Second World War, the GI Bill began the process of democratising higher education and opening up access to UC, a process facilitated by the centrality of the University’s scientists in the war effort.  The federal government now had a significant stake in the success of the University and its mission, and the Cold War added impetus to the push to bring more Americans into a system of higher education which was seen as making the country competitive with its opponents.

In 1936, only 12% of high school graduates nationwide went to college.  By 1960 the number had risen to 45%, by 1975 to 51%,and by 1990 to 60%.  75% of college graduates are educated at public universities. 

In California, this democratisation of education was made possible by the Master Plan, a document which mandated free higher education and established the UC, the CSU, and CCC with their different roles for the state.

Everyone knows that the ‘60s were a tumultuous time at Berkeley. 

But disorder on campus was nothing new.  In the early 1900s the campus was known as a centre of right wing politics in the Bay Area, and militant students were used to attack strikers in the progressive City of Berkeley.  From the 1920s onward riots occurred on campus, normally associated with sporting events, occasionally causing thousands of dollars of property damage.   But University authorities and police were not worried by this behaviour, which they dismissed as adolescents blowing off steam. 

Mario Savio and the Free Speech Movement
They only really began to worry when student protests became political, and when students began to critique the status quo in the state, whether that be the Vietnam War, the lack of progress in the area of civil rights, the witch hunts launched during the 1950s at the University to root out left-leaning faculty, or the UC’s intolerance of political speech on campus.

As part of a nationwide programme to root out undesirables, the FBI harassed students and faculty, and repeatedly broke the law in order to discredit the institution and three men associated in different ways with its defence.  One of these was Mario Savio, a leader of the Free Speech Movement, and a trenchant critic of the political status quo as well as of the University administration.  UC President Clark Kerr was no fan of radical students, but he sought to protect them from the FBI and members of the administration who wanted to turn the police loose on them. 

In his efforts, Kerr was backed by Governor Pat Brown.  Brown, the father of our own governor, was one of the movers behind the Master Plan for Higher Education, which sought to ensure a place for all qualified Californians—free of charge—at one of the state’s institutions of higher education.
Clark Kerr, President of the UC

The FBI and its allies, finding no support from the Governor, decided the state needed a new one, and backed the candidacy of Ronald Reagan, who had done work for them before by outing colleagues in Hollywood for their left-wing views. 

Reagan needed to win a Republican Party primary, and in a story that might sound familiar to us today, decided to stake out ground on the right.  A Republican political consultant told him to focus on “welfare queens”, “mental health malingerers”, and the “student revolt at Berkeley”.  Reagan, who didn’t know much about the UC before, was prepared to do whatever it took to win the election, and ran an angry campaign in which the protests on campus became his central target during the gubernatorial campaign, while the other issues defined the tone of much of his political career.

In the election of 1966, Reagan swept Brown from office, ending the political career of the man responsible for adding new campuses to the university, building California’s water system, its highways, and its public sector.  Reagan quickly fired UC President Clark Kerr. 

He then cut funding to the UC by 20% at a time when the University was growing, and set out to raise tuition by way of punishing the students who had challenged the political status quo in the state and the country.  He ordered the National Guard onto campus, and dramatically escalated violence in the city.  He sought to screen faculty appointments, damage morale on campus, and use unsubstantiated allegations to reduce public trust in the UC.  The Governor monitored student activity, complained about “subsidising intellectual curiosity”, and suggested that the University sell its rare books to earn money for the state
Governor Ronald Reagan

Thanks to Reagan’s efforts, by the early 1970s Californians’ trust in UC was down, and in 1970 a bill in the state legislature was passed to introduce tuition for the first time. 

The ‘70s were an important decade for another reason.  Earlier, the assessment of property taxes had been discretionary, raised or lowered by elected assessors.  When that changed, because of inflation in the state’s housing sector, those property taxes began to rise at a steady rate. 

One solution to overly high taxes on homeowners would have been to create two tiers of tax: one for homeowners and another for corporations, and to be flexible about the rates.  But the realtors’ lobby saw an opportunity, and joined forces with Republican politicians to put an initiative on the state ballot which would fundamentally re-shape the state’s political economy.  In common with Reagan’s campaign against Berkeley, the so-called Tax Revolt, headed by what would become the Howard Jarvis Taxpayer association, was driven by anger. 

The initiative Jarvis sponsored would cut property taxes dramatically and cap them at 1% of a property’s market value.  It also stipulated that that tax could not be raised by more than 2% per year.  It simultaneously wrote into the state constitution that any increases in any tax in the state must be passed by a two-thirds supermajority in the Senate and Assembly.  Tax cuts, of course, only required a simple majority.

Senate and Assembly Democrats sought to head off the danger by creating a split roll—with different assessments for households and businesses, but the Governor at the time, Jerry Brown, refused to cooperate.
Howard Jarvis

As a result, in 1978 the initiative we know as Prop 13 passed, and California would never be the same.  The effects of Prop 13 were diverse.  Property taxes dropped dramatically, on businesses as well as homeowners.  Savings accrued most dramatically to businesses, at twice the rate as to the homeowners the tax cuts were supposed to benefit. 

Local governments, which had managed property taxes and the services that they funded, lost much of their funding, and responsibility for funding services moved to the state government.  Universities were hit hard, and even schools lost funding.

Prop 13 amounted to one generation, having used the safety net and social welfare system built by others to make a successful life, then deciding that it was not interested in investing in the same system for future generations, and unilaterally overhauling the state’s system of government.

A good tax system is generally one which is spread between different kinds of taxes and remains stable in the face of economic fluctuations.  But with property taxes virtually off the table, California came to rely more and more on regressive sales taxes and income and capital gains taxes, which are often evaded by loopholes.  Taxes on marginal income fluctuated wildly, especially recently, with the stock market and the economy as a whole, meaning that the state does not have a secure source of revenue. 

Jarvis' successors talked about "drowning government in the bathtub"
California has two large political parties.  The Democratic Party favours the support of public institutions, relatively higher taxes, higher spending, and is close to organised labour, whether teachers or prison guard unions.

Republicans, on the other hand, favour lower taxes, fewer public services, and less spending, arguing that individuals rather than the collective should be responsible for the well-being of society.  The Republican Party has long been a minority in both the Senate and Assembly in California.

But thanks to Prop 13, the Republican Party was in a powerful position.  Until 2012, and again since the beginning of this year, it has always controlled at least a third of the seats in at least one house, and because of the supermajority rules—it takes two-thirds of the houses to raise any taxes—this means that it can prevent any additional spending in the state.  For a party that wants to make cuts to services and to government in general, one-third plus one is all that it needs to enact its program, and by vetoing tax increases in a state with a population growing in size and demographic complexity, the Republican Party has substantially reduced California’s public sphere in recent years. 

Today, virtually all Republican Party members in the Senate and Assembly have signed an oath to Howard Jarvis’ group, pledging that they will never, ever vote to raise taxes.  Representatives who sign this pledge receive campaign donations from the corporate world and the endorsement of their party.

So there were two critical developments in the 1970s for the University of California.  On the one hand, the state began cutting the budget for the university and forcing students to shoulder a small share of the burden for funding the UC.  On the other, an initiative was passed which effectively set the state on auto-pilot towards budget cuts and an unstable economic situation.

What did tuition increases look like?

In the early years, tuition was low, just $6-700 per year (which explains why some people of a certain generation brag about working their way through school while taking a full load of classes and putting money aside to save).  But it began to climb more quickly, particularly in the early 1990s.  Beginning in 2009/10 it rose rapidly until, in response to large protests on campus, a temporary tuition freeze was instituted.
Tuition over the past decades

Between 1990 and 2010, spending per student at UC dropped by $5,000.  The sources of that money have changed as well.  In 1990, three quarters of the expenditure on every student came from state general funds.  In 2010 it was less than half.  In 1990, only 12% of that expenditure was supported by tuition.  By 2010, 40% of per-student spending came from tuition. 

That same year, 18% of UC’s total budget came from state and federal contracts, 8% from private support, and 45% from “sales, services, and auxiliaries”.  26% came from what are called “core funds”.  Of that 26%, 50% came from state funds.  In other words, thanks to the deliberate creation by Reagan and the Republicans of mistrust in UC, and Prop 13’s re-working of the tax system, the State of California now only provides 13% of the funds necessary for the University to function.

For this academic year, tuition and fees total $13,200, plus a $1,700 health insurance fee.  The estimated cost of attending UC as a Californian if you live on campus is $32,400.  That’s a pretty dramatic change in forty years.  As late as 1970, Californians as a whole assumed responsibility for funding higher education, accepting the idea that society as a whole benefited from investment in education and research.  By 2010, students and their families were shouldering much of the burden. 
UC Revenue sources

We’ve seen some of the forces that drive up tuition at the University.

But who makes the decision to raise fees?  Who controls the money?

UC is not run by legislators or the Governor.  It is independent in its system of governance, a major strength for an academic institution, but a weakness when it comes to accountability to its community and to the State of California.  Each UC campus has a Chancellor.  The system as a whole is headed by a President.  Both the campus Chancellors and the system Presidents serve at the pleasure of the Board of Regents.

The members of the governing board are appointed for 12 year renewable terms by the Governor.  The positions are prestigious, making them a form of patronage for the Governor.  The Regents are essentially unaccountable to the campus communities.  Most Regents are campaign donors, meaning that they have little knowledge of higher education, and represent corporate California rather than the state as a whole. 

The Regents control the budget, and make decisions about tuition and fees on the advice of the President.  But of course, there are restrictions on the Regents.  The Governor, the Senate, and the Assembly—as well as California voters through initiatives—control how much money the University has to spend.  Politicians can also discourage the Regents from taking certain policies by threatening to reduce funding.

But what has happened is that as state funding has fallen because of Prop 13 and UC’s ability to rely on tuition, is that the state is losing control over the University system.  Before, if the state cut UC funds, the University would protest and lobby, in part because it had nothing else to fall back on and believed that education should be free.  But because the Regents—due to their home in the corporate world—believe that the University should be run like a business rather than an institution of education, a school, for example, they are happy to raise tuition.  They see themselves as providing a product to customers rather than a public good to citizens. 
Berkeley Chancellor, Robert Birgeneau

Tuition had been rising for years, but the pace quickened in 2009/10.  Students, perhaps understandably, blamed the administration, and as protests grew in the next few years, their slogans targeted the other outgrowth of UC’s transformation into a business: a bloated administration, in which the salaries of chancellors, provosts, deans, and other officials rose at the same time that the university was losing resources.

An early slogan was “Chop from the Top”.  While it is indeed egregious that the UC President makes more than the U.S. President, cutting the salaries of top administrators would in no way make up the decades of shortfall from the state, and would not allow for the reduction of tuition.  And so the rhetoric of many protesters fell into a trap, and echoed the right-wing drive for austerity that rippled across the country as Republicans argued that cutting taxes, and therefore social services, should be a priority.

Republicans and students alike were focussing on UC’s bureaucracy, rather than on rising tuition.  In other words, no matter how much you cut bureaucrats’ salaries, you couldn’t make up for the lack of funding from the state, and the burden that students are now facing.

Therefore, students’ protests had little immediate impact on the political economy of the UC or of California.  What did happen is that UC set up something called Operation Excellence, which looked for ways to cut costs at UC, as you would with a business.  And so they hired lots of HR people making six-figure salaries to cut counsellors, academic advisors, secretaries, and whole academic units.  In other words, they cut all the people who allow the University to function in a humane and efficient manner from the perspective of students, while enlarging a class of bureaucrats, whose contribution to an institution of learning is by no means clear.

While UC’s misguided priorities by no means explain all or even most of the funding shortfall, they are not only a clear indicator of the mentality of the new breed of administrators; they also make it difficult for the University to ask credibly for more money from a sceptical state.  Voters are unlikely to countenance paying higher taxes to an institution that hands our bonuses and raises to administrators during a budget crisis that short-changes students, faculty, and staff.

This new class of administrators also began to entertain some wild schemes.  One was to keep Berkeley and UCLA as large campuses offering a range of degrees, but to turn some of the smaller campuses into specialised campuses.  Robert Birgeneau, our former Chancellor, wanted each campus to be able to set its own tuition rates.  This, of course, would mean that tuition at Berkeley and UCLA, because of their well-established brands, would go through the roof, making them more exclusive than ever, because there will always be demand from the wealthy.  It would also mean that the smaller campuses, which provide an education to large numbers of people even if they lack Cal’s prestige, would struggle to survive.

This hasn’t happened yet, but UC has begun to take in more out of state students and to prioritise lucrative professional degrees at the expense in particular of the arts and humanities.

UC Regent Richard Blum, husband of Senator Feinstein and proponent of privatisation
What UC argues is that their financial aid programs offset the high tuition.  But not only do many students not receive financial aid, even those who do have to contend with the rising cost of housing.  Rather than trying to keep housing costs down, UC are exploiting a captive market and raising housing costs with tuition.  For students who are the first in their families to attend college, high tuition remains a barrier, because at many of their high schools, funding for the support staff who would make the complex admissions process accessible has been cut over the years.  Thus many students are turned off by the high sticker price and don’t have access to the family networks or school resources that could help them to navigate the admissions process.

Moreover, if students leave university with large loans to pay off, they are going to be more interested in making enough money to make those large payments.  Students will feel more constrained in their choice of major, and this has the potential to transform the academic market and the economy of our state, with a glut of students entering fields for some of the wrong reasons.

We see the consequences of these processes everywhere.  Students pay more for their education and they pay more to live here.  Their classes are larger and they are offered less often.  Because their support staff are being cut, and because they have to do more to justify their existence, professors are stretched thin and overworked.  That means that graduate students do more of the teaching, while facing our own financial and work-related burdens, as well as an increasingly hostile job market and uncertain future due to the casualising of academic labour—a trend which mirrors developments in the workforce at large.

There have been two views of what students and the UC community can do to protest against these developments.

Protests at Berkeley
There are some groups who say that it is important to negotiate with the politicians who control the state budget, and persuade them to reinvest in UC.  The UC administration has supported this view.  They only began their efforts in a very belated fashion after other students launched large protests on campus, and as rising tuition shows, they have been largely unsuccessful.

Other groups maintain that direct action on campuses is the most effective way of addressing the crisis at UC.  These groups have targeted the administration.  In 2009, 2010, and 2011 there were large protests on campus.  The administration at Berkeley unleashed the police, who used batons and rubber bullets on people occupying buildings and those standing peacefully by.  The violent reaction of the administration demonstrated the power of these student protests.

But while large campus protests brought the tuition crisis to the attention of the public, they exert pressure on people—the Chancellor, the President—who ultimately don’t have very much control over UC’s budget.  The idea is that the pressure from the protests will work its way up the food chain.  But the fact that the Regents are now looking at raising tuition shows that these protests, too, perhaps because of their failure to act on UC’s position with the political economy of California, have by and large failed to achieve their purpose.

Governor Jerry Brown
Many expressed hope for change with the election in 2010 of Jerry Brown, a Democratic governor.  But Brown refused to address the structural causes of California’s divestment from the public sphere, such as Prop 13.  Instead he decided to budget via the ballot box, only raising funds if voters would approve them at the polls.

California’s governing structure was already a mess.  But Brown’s refusal to demonstrate any leadership added another layer of complexity to an unworkable system.  He sold Prop 30—a modest increase in income taxes on the very wealthy—as a “fix”.  But the increase was temporary, inadequate, and failed to address structural issues, ensuring that the funding crisis would be a recurring one.  Meanwhile, Brown has threatened UC with “massive tuition increases”, and equated more state support for the UC with the bank bailouts.

Students today are in an unenviable position.

University leadership has embraced the slow privatisation of the UC, which means higher fees and a degraded education.  Brown and some of the Regents have advocated for the extensive use of online education as a replacement for classroom education, simply because it is cheap.  State leadership has been unwilling to address the underlying problems, thereby ensuring that there has been no chance of increasing funding or rolling back tuition at UC.  The powerful financial industry has an interest in maintaining the status quo because of the massive profits they derive from student loans, which are themselves based on sky-high tuition.

This is not a happy picture.

But I see one reason for hope.  In the 1960s and ‘70s, the U.S. and California were comparatively affluent places.  Students’ troubles were not as closely connected to the country’s larger issues.

Today, on the other hand, inequality and the crumbling of the public sector are national, even global trends.  This means that the problems which students face mirror those which workers in other sectors of the economy face.  The commonality of these problems could bridge generations and different sectors of the workforce.

But it remains an open question—and perhaps one which we should be discussing as a community in our Republic of California—whether the changes which have been occurring at UC over the past several decades are irreversible, or whether it might be possible to re-make UC as a public institution capable of performing its mission as defined by the master plan: one related to citizenship and social and economic equality, and making knowledge accessible to citizens of our state.  

Fiat Lux.

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