The recent revelation that 36 UC execs have called on President Yudof to “do the right thing” and allow their pensions to go beyond the IRS income limit shows in bright strokes how the university has taken on the logic of a Wall Street firm. Not only does the upper management seek to reduce labor costs by lowering benefits, reducing salaries, busting unions, and eliminating positions, but there is an insatiable hunger to transfer wealth and power to the top. Moreover, many of the people who signed the letter asking for increased pensions are directly responsible for the management of the UC’s investments, which lost over $23 billion in 2008-09. Like Wall Street investors, the people who helped steer the economy into a ditch now want record-breaking compensation deals.
On one level, I actually feel for President Yudof, who allowed these high earners to escape from their furloughs only to have them turn on him. In fact, it is important to stress that one reason why we have not seen the needed faster ramp-up of the employer contributions to the pension plan is that the medical centers, with their billions in net profit, have argued that they cannot afford to contribute the needed amount. The leaders of the “self-sustaining units” feel that the only way they can stay highly ranked is if they offer huge compensation packages to their star administrators and researchers. Like the self-promoting, self-compensating Dean of the UCLA Anderson Business School, these top earners are pushing to further privatize the UC so that they can generate new compensation schemes.
Of course all of this is occurring during a time when the new governor is threatening to reduce the UC budget, and the university is bracing for the results of a state audit that will surely spread gas on the fire. The only responsible thing for the UC administration to do is to show that it will spend state funds and student fees in a fair and effective manner. By freezing student fees, increasing instructional budgets, and reducing the size and costs of administration, the UC system will be in a much better position to protect state funding and its public image.
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"I actually feel for President Yudof, who allowed these high earners to escape from their furloughs only to have them turn on him."
ReplyDeleteyou truly believe he was completely caught off guard by this?
These greedy UC executives, (a group characterized as "craven scum" by Dean Edley himself), whine that they were promised increased pension benefits.
ReplyDeleteThey ignore the fact that lots of people have been promised lots of things by the University of California who will never see those promises realized.
The UC pension plan has a huge unfunded liability and one way or the other it is inevitable, (barring some sort of fiscal miracle), that UC employees are going to get stuck paying for this unfunded liability, either by job cuts, increased pension contributions, or decreased benefits.
So the question isn't really whether UC will break a promise, but rather which promises will UC break, when, and to whom.
Not breaking promises is simply no longer an option for UC.
These UC executives realize this, and they simply want to make sure they are personally taken care of before the real financial suffering gets underway.
Shame on them for their cupidity; and shame on them for dragging UC's good name further into the mud in the press for a situation they themselves partly helped to create through years of university mismanagement.