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Thirty-six executives of the University of California "believe it is the University's legal, moral and ethical obligation" to implement changes to the system's pension plan that would allow them to retire with pensions calculated on their actual, exceptionally high pay levels rather than the (lower) federal limit for such pension calculations -- the federal limit is $245,000/year.

This change, if it goes forward, would give some of these executives a post-retirement raise of more than sixty percent -- from a pension worth $183,750 annually to pension pay at $300,000 per year for an exec whose working salary is $400,000.

The Whinging 36 are threatening legal action if they don't get their pensions plumped.

These executives claim in their letter and attached position paper (from which the foregoing quote was drawn) that the changes they demand were promised by the University's governing Board of Regents and other executives. This is actually pretty important, and I'm inclined to believe them on that point. I'm not qualified to debate signatory and Whinging 36 leader Christopher J. Edley, the dean of UC Berkeley's law school, on questions to do with the legal obligations in play.

I do note, however, that it was apparently legal for the princes of Wall St. to slurp down bonuses that make UC executive compensation look like couch-cushion change, even after financial firms accepted billions of taxpayer dollars in bailouts for the mess they made of the economy. Never mind that the "recovery" that this bailout effected has yet to return millions of people to work at real-world wages.

So it's not so surprising that some executives at the University of California feel entitled to demand exceptional pensions to wash down their exceptional pay, even though the state's and university's budgets are in crisis, layoffs are rampant, belts are tightening, employee pension plans are requiring greater contributions from staff and faculty, retirement age is being pushed back, new-employee benefits will be offered on lesser terms, and ...

Well, if you're reading this you probably know the story, or one just like it from an economic sector near you.

There has been plenty of outrage at Dean Edley & company's letter voiced by the San Francisco Chronicle's editorial board, by that paper's four letter-to-editor writers who sounded off on 30 Dec and eight more who weighed in on 1 Jan. I can't wait to hear what my colleagues say when I return to work today, the first our campus has been open for business since news of the execs' threatening letter to the Regents broke.

But with the mud still flying, here's what this UC Berkeley employee does feel qualified to say to Edley and his gang of grasping execs: the assertion that a public university, in major fiscal crisis, has a moral obligation to spend scarce resources on exceptionally high executive pensions is a gross misapplication of the concept of morality. The University of California has a public mission. We operate on a (shrinking) public budget. We struggle to serve a constituency drawn from all walks of society -- not only a privileged, overcompensated elite.

When a public university's leadership throws tantrums about wanting to be paid like administrators at Harvard and Princeton and Goldman-Sachs, they stain the work and reputation of faculty and staff who have been working for years and decades at below-market wages.

(In case readers are drinking the jihad-against-the-public-sector kool-aid peddled by Tea Party leadership, and therefore imagine that public-sector employees are, on average, making out like bandits, read the evidence that the NY Times attested to yesterday:

A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers. The Manhattan Institute, which is not terribly sympathetic to unions, studied New Jersey and concluded that teachers earned wages roughly comparable to people in the private sector with a similar education.

Why do public sector employees accept below-market wages? Judging from a long-term, completely unscientific study of my colleagues across lines of work and areas of the UC Berkeley campus, most of us chose our careers because we are more committed to public service than we are to feathering our own nests.)

So if, by "moral [...] obligation" the Whinging 36 mean a morality based on principles like "What's mine is mine, and what's yours is your problem but I might take that too" -- well ... that sounds a lot like class war to me, so at least I know how to understand what they're after. But if morality refers to a notion of right conduct that is grounded in common good and social obligation ... well ... sorry, highly-paid UC execs, you're way off base.

Let's look at some numbers. The U.S. Census Bureau pegged median earnings for an individual (2009 stats) at $35,285. At the University of California, where the demographics skew high due to an above-average workforce share of highly-educated faculty, medical doctors, and professionals, average compensation was $68,089 in October 2009.

So, for an exec earning $400,000, what the Whinging 36 are whinging about is a pension worth over five times the median working income in the United States, or over 2.5x the average income of working University of California colleagues. What do they demand instead? A pension worth 8.5x median U.S. income, or 4.4x average income of UC colleagues for the example given. As a post-retirement benefit, mind you. This is after taking home pay, in this example, at a rate more than eleven times higher than the U.S. median, for years and years.

I don't know about you, but that leaves a bad taste in my mouth.

A vast majority of workers in the United States won't get pensions. Instead, people are expected to manage saving and investment for retirement themselves to augment our national retirement pension program, a.k.a. Social Security. Is that good? Is that bad? There are arguments to be made every-which-way, and they have been and continue to be made at length. I'm not going to make an argument in this post, it's long enough as written.

But I will note that Dean Edley and company are walking a cleverly thin line, standing on ground they can claim to share with, as the NY Times put it yesterday:

[u]nion chiefs, who sometimes persuaded members to take pension sweeteners in lieu of raises

over the course of recent years and decades. The Whinging 36 are claiming that at least some of them were dissuaded from taking other (higher paying) jobs elsewhere by the promise and expectation that pension rules were going to be changed to inflate their retirement income. That's a powerful argument if claims are true that their employers made promises that materially affected their employment, and are now breaking those promises.

At the same time, it's remarkable that university elites not only demand the stars as their due for lopping away jobs and benefits of the employees they manage; but simultaneously argue like union negotiators against the raging "class war on public workers," as friend and fellow-blogger katinsf put it in October.

It's a weird, weird world.

However you crunch the numbers, the Whinging 36 are demanding a very sweet deal ... one to which, in my moral universe, they really have no moral right at all ... however the legalities are sorted out.

If you want to do some digging into details about the Whinging 36, the SF Chronicle's posted copy of their letter to the UC Regents gives each signer's name, title, and campus. Then you might hop over to the Sacramento Bee's State Worker Salary Search, which permits anyone to look up the salaries of public employees. For example, you can learn that Dean Edley was paid a fraction of that mythical $400,000 salary in 2009 (the fraction, roughly 27/32, works out more accurately to 84.13%).

Here's how J.J. Lamb, of Novato, summed it all up in the lead letter to the SF Chronicle on New Year's Day:

Of course, greed is greed. The UC justification for outlandish staff compensation has always been 'We must compete with the private sector.' I say, release every one of these people to the private sector. Immediately.

That's one way of looking at it. And in the heat of reaction to Dean Edley and his buddies claiming pensions that could dwarf the lifetime earnings of most Americans, it might feel like the right way to think of the Whinging 36: if these guys want to make rapacious salaries as big shot executives, the private sector is where that's rampant.

But a more considered analysis -- in which that morality thing, you know, about common good and social obligation, carries some weight -- might lead one to conclude that certain degrees of differential in compensation ain't right no matter where it happens. There's enough; there's reward & incentive for extraordinary skill or initiative; and there's too bloody much. The Whinging 36's efforts to tilt high-end compensation further toward too bloody much doesn't look attractive to me as a blueprint for the future, whether that future is in the public or private sectors.

What do you think?

This diary is cross-posted from the author's blog, One Finger Typing.

Originally posted to Steve Masover on Mon Jan 03, 2011 at 01:00 PM PST.

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Comment Preferences

    •  can I marry you? (0+ / 0-)

      I love the way you think.

      BTW, which unions represent UC?

      It's not a fake orgasm; it's a real yawn.

      by sayitaintso on Mon Jan 03, 2011 at 01:29:55 PM PST

      [ Parent ]

      •  gulp... (0+ / 0-)

        Never generated a marriage proposal out of a blog post before... ;-)

        There are loads of unions at UC -- when I worked in HR at Berkeley I remember hearing there were something like 13 union contracts in effect.

        The "systemwide" office for all the campuses (UC Office of the President) maintains this list of collective bargaining units. That's the place I know to look for info, it may not be complete but at least it's a start.

      •  That's quite a tip. [n/t] (0+ / 0-)
      •  I would guess they're tenured (1+ / 0-)
        Recommended by:
        tardis10

        but the first step, seems to me, is to have 'em all resign NOW, without benefit of pension. Seriously. If they're not too superannuated to teach, let them find employment with a different university.

        Pay scales ... pay scales ... pay scales. This is another example of how those who administrate seem to feel entitled to more, more, more -- while they believe those actually working should work longer and harder for less.

        LBJ & Lady Bird, Sully Sullenberger, Molly Ivins, Barbara Jordan, Ann Richards, Drew Brees: Texas is No Bush League! -7.50,-5.59

        by BlackSheep1 on Mon Jan 03, 2011 at 03:29:24 PM PST

        [ Parent ]

  •  I've been following this with interest (10+ / 0-)

    The sense of entitlement with this group is stunning, particularly when coupled with the recent tuition increases.  

    If they think they can do better in the private sector, time to let them test that theory...

    you don't need a weatherman to know which way the wind blows

    by Dem Beans on Mon Jan 03, 2011 at 01:08:23 PM PST

    •  Exactly. (3+ / 0-)
      Recommended by:
      BlackSheep1, Dem Beans, fizziks

      If I was king, every last one of the disgusting fuckers would have their position eliminated, and a new framework for UC governance would be implemented. There needs to be new blood and structure. Eliminate every last one of these foul excuses for public servants from the UC payroll.

      Of course that will never happen....

  •  same shit at Rutgers (10+ / 0-)

    2009-- all Rutgers unions agreeed to defer raises to save jobs

    June 2010-- Rutgers President announces he won't
    pay the raises that were delayed

    September 2010 -- Rutgers President announces raises for "outstanding administrators"  only

    December 2010 -- Rutgers President creates 2M fund for pensions of employees at +141k -- because the State of NJ won't contribute above that level

    Higher Education is starting to look like Wal-Mart

    It's not a fake orgasm; it's a real yawn.

    by sayitaintso on Mon Jan 03, 2011 at 01:17:47 PM PST

  •  Not here... yet (0+ / 0-)

    I am at UW-Madison and the higher ups have not dared cross this line yet. Of course I don't know what their pensions are like, they may already have a cushy deal. Great diary!

    Impossible is nothing

    by DrSpike on Mon Jan 03, 2011 at 01:30:33 PM PST

  •  you're right and wrong (1+ / 0-)
    Recommended by:
    BlackSheep1

    Great diary, and you're quite right to note the disgraceful language -- as well as nauseating hubris and tone-deafness -- employed by the executives.

    My own feeling is that it's not so much about the salaries / benefits paid to top administrators, nor even about the grossly inequitable effects of salary cuts COUGH I mean "furloughs" (8% of $400,000 is still a hell of a lot more living money than 4% of $40,000).

    It's about the grossly inflated numbers of administrators.

    •  number of staff and administrators rises (3+ / 0-)
      Recommended by:
      BlackSheep1, LucyandByron, fizziks

      when you use adjuncts to teach your courses.

      They teach, then go home.  

      Staff do the advising, post the readings online, advise the student clubs and organizations.

      Administrators fly to China to recruit students,  fellate legislators, court wealthy donors, etc.

      It's not a fake orgasm; it's a real yawn.

      by sayitaintso on Mon Jan 03, 2011 at 02:00:10 PM PST

      [ Parent ]

      •  yes, and? (0+ / 0-)

        Not sure how this relates to my point, which was that the grossly inflated number of administrators is a bigger problem than the level of salary and benefits paid to individual administrators.

        I can't tell you what our support staff would say if I asked them to post my readings online for me, but that's largely because I don't know how to spell the sound of derisive laughter.

        •  if you're as charming as you are online (2+ / 0-)
          Recommended by:
          BlackSheep1, LucyandByron

          you might get attitude... even in gentle New Jersey.

          At my institution, the library licenses and controls online reserve reading so we don't get socked with copyright/license fines.

          My point:  and I'll say it slowly... the reduction of full-time faculty positions is what generates the other positions.  

          Other people do the work that once was faculty work.

          Some make more than full-time faculty, some make less.

          Have a blessed day.

          It's not a fake orgasm; it's a real yawn.

          by sayitaintso on Mon Jan 03, 2011 at 02:16:54 PM PST

          [ Parent ]

          •  thanks for saying it slowly (0+ / 0-)

            I'm a pretty slow reader. In looking at this exchange, I can't help but feel you're hitting reply to my comments but actually reading somebody else's...

            the reduction of full-time faculty positions is what generates the other positions.  

            In any case, as a full-time faculty member, I'm more than sympathetic to this position; unfortunately, reduction of full-time faculty positions is only one very small part of the very large problem of exploding administration -- at least at the very large, very public, very research-oriented university system in which I teach (see: tuition increases, "creative" financing of construction bonds, Wall-Street play, etc.)

          •  could this be the source of your enmity? (0+ / 0-)

            the sound of derisive laughter.

            "Derisive laughter" referred to that which would be directed at me from the support staff if I were to make such a request (and not me laughing derisively at you).

            Apologies for ambiguity.

    •  No, just Senior Mgmt Group (1+ / 0-)
      Recommended by:
      Swill to Power

      My recommendation for the budget crisis was to sack everyone at the AVC level and give 10% raises to the underlings who did all their work.  Edley wrote to the other Deans to advocate for the creation of "self-funding" advanced degrees.  Way to further diminish the brand; why not merge with University of Phoenix and have done with it?   My reply, "Doctor of Bullsh*t Arts" for management and political consultants, was wasted on him.  

      Way too many people have been created as "associate vice-chancellor" by analogy with "VP of Boondoggle" in the private sector, but the axe is aimed at those below them who actually do things.  

      "A city for sale and doomed to speedy destruction if it finds a purchaser!" --King Jugurtha

      by LucyandByron on Mon Jan 03, 2011 at 04:08:10 PM PST

      [ Parent ]

  •  When I read this story in the paper (2+ / 0-)
    Recommended by:
    BlackSheep1, fizziks

    it struck me as being the essence of what is wrong with the whole setup. There has been a running political battle for years over the perks for the top administrators at UC. The excuse is always that they need to be able to compete for the top administrative talent. Really, why? It is a public university. It's primary mission should be to provide a decent education to the young women and men of California without putting them into debt peonage for all of their working lives. Instead it has become another branch of the kleptocracy.    

    •  wow if there was ever an oxymoron (0+ / 0-)

      administrative talent

    •  This ought not be a CALIF solution, but a USA one (0+ / 0-)

      There has been a running political battle for years over the perks for the top administrators at UC. The excuse is always that they need to be able to compete for the top administrative talent. Really, why? It is a public university. It's primary mission should be to provide a decent education to the young women and men of California without putting them into debt peonage for all of their working lives. Instead it has become another branch of the kleptocracy.    

      There's a running battle now -- has been since I started school in '80 -- about compensation for administrators in state-funded schools across Texas.

      You can't teach in one (even a juco) without a master's, which puts you into debt. But if you administrate, you're supposedly entitled to a salary equal to, say, a winning coach in a major sport (and the teachers can't get raises or money for supplies, and must do ever-more-elaborate 'research' and grant-writing exercises to retain jobs) ... tenured profs are making $40 k a year down here.

      Why in the name of all that's holy do administrators need to make ten times as much?

      They don't.

      Period.

      End. of. statement.

      They cannot be afforded in the current economy, and should therefore be taken off the payroll.

      LBJ & Lady Bird, Sully Sullenberger, Molly Ivins, Barbara Jordan, Ann Richards, Drew Brees: Texas is No Bush League! -7.50,-5.59

      by BlackSheep1 on Mon Jan 03, 2011 at 03:34:57 PM PST

      [ Parent ]

      •  I certainly don't think that the problem is (2+ / 0-)
        Recommended by:
        BlackSheep1, tardis10

        unique to CA. I live here and am most familiar with it. What is somewhat specific to CA is that once upon a time in the very distant past the people of this state had a commitment to quality public services. As a result of that the Univ of CA attained the status of possible the nation's most prestigious state run university. However, that whole tradition began dying with prop 13 in the 70s. We now live in a very different world.    

  •  Sleazy (3+ / 0-)
    Recommended by:
    BlackSheep1, kck, tardis10

    ...pensions calculated on their actual, exceptionally high pay levels rather than the (lower) federal limit for such pension calculations -- the federal limit is $245,000/year.

    http://www.irs.gov/...
    Just to be clear, there is no limit on pensions, just a limit on "qualified" pension plans.  The benefits of a qualified pension plan are:
    ---tax benefits: they allow employers to deduct annual allowable contributions for each participant (if the employer is a tax-paying outfit, not a public university system);
    ---contributions and earnings on those contributions are tax-deferred until withdrawn for each participant;
    ---and some of the taxes can be deferred even further through a transfer into a different type of IRA.

    Yes, sleazy for the U.C. executives to propose such a raise for themselves, especially in these trying times.

  •  Rec'd just for "moral turpitude" (1+ / 0-)
    Recommended by:
    BlackSheep1

    I assume that's still a standard phrase in tenure contracts.

    Just because you're not a drummer doesn't mean that you don't have to keep time. -- T. Monk

    by susanala on Mon Jan 03, 2011 at 02:50:09 PM PST

  •  What would happen if they administered all UC's (2+ / 0-)
    Recommended by:
    BlackSheep1, fizziks

    centrally and eliminated all these asswipes.  Would it really change anything about the quality of education?  

    THE GREATNESS OF A NATION AND ITS MORAL PROGRESS CAN BE JUDGED BY THE WAY ITS ANIMALS ARE TREATED. -Gandhi

    by lakehillsliberal on Mon Jan 03, 2011 at 03:00:14 PM PST

    •  admins: ad staff as FIRE economy: to real economy (2+ / 0-)
      Recommended by:
      lakehillsliberal, tardis10

      The Whiny 36 and others at that level spend their time cultivating major donors and corporate partners, going on junkets and serving their own interests.  Others classified as "administrative staff" keep the buildings going, write the grant proposals and reports, recruit, pay, counsel, and try to find jobs for the students, plan the budgets, save researchers from the Egyptian secret police and other boring, yet crucial things.  

      The latest evil plan is to centralize as much as possible of the actual work, meaning poor response and more mistakes.  The "C" suite people are top talent, so neither they nor their entourage will be sacrificed.  It's my staffers who will go, leaving fewer people to "work smarter, not harder." All those things still need to be done.  When things go to hell, the best faculty will leave, and the best students will choose to go elsewhere.  

      BTW, the Law School already has a high turnover because Everybody Hates Chris {Edley}.  The best way to stop that would be to let him go.  Frankly, if any of those 36 really could make millions in the outside world, they would have done so already.  

      "A city for sale and doomed to speedy destruction if it finds a purchaser!" --King Jugurtha

      by LucyandByron on Mon Jan 03, 2011 at 04:36:45 PM PST

      [ Parent ]

  •  This country has a parasitic class (3+ / 0-)

    It is those in the financial sector and those in the upper eschelons of this 'administrative' sector, whether in industry, government, health care, or education.  

    The people who do real productive work have felt the squeeze for 30 years, while those who don't have grown ever richer.

    It is obscene and sick.

  •  Shame on Mark Yudoff and the Chancellors (1+ / 0-)
    Recommended by:
    tardis10

    Replace them...in a year or so with a cap on the salaries of a new org at $250/y. Same with the Regents.

    "Life is not about waiting for the storms to pass... it's about learning how to dance in the rain." (unknown)

    by kck on Mon Jan 03, 2011 at 03:35:57 PM PST

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