Thursday, November 18, 2010

 

Permanent Austerity

In a discussion last week, I realized that the common denominator to so many of my personal hobbyhorses is fatigue with the climate of permanent austerity that seems to have settled upon public higher education.

Off the top of my head, I can come up with several reasons why we seem to be stuck in permanent austerity mode..

First, there's the basic open-endedness of mission. How much education is enough? How many programs should we run? How small should we let sections get? Which services should we provide? Whose salaries are too low?

That's in contrast to, say, heat. We spend money heating buildings, but there's an upper limit to the amount of heat that's desirable. Above a certain point, it's actually destructive; there is actually such a thing as enough. With a mission like “meeting the educational and workforce needs of the area,” though, it's hard to say how much is enough. In practice, we tend to let the budget set the definition of enough. From the perspective of any given program – or any prospective program – there's always more need. And from the perspective of anyone with a particular interest, there’s always a new program to add. This is also part of why adding programs is sooooo much easier than subtracting them.

Second, we're caught in a vicious pincer movement. State aid keeps dropping, but health care costs keep going up at several multiples of the rate of inflation. Over several years, these twin movements can beat even the most elegant budget into submission. Both trends are essentially out of the college's hands, which makes them that much harder to handle. When health insurance costs go up, say, ten percent a year for a decade, but state aid is actually moving backwards, the squeeze is real.

I'm not terribly hopeful for a short-term reversal of either trend. State aid is reliant on a combination of tax revenues and allocation decisions. Tax revenues still trail what they were a few years ago, and other areas of real need in the state budget don't have alternative revenue sources (like tuition). It'll be a long time before we climb out of that, if we do. And since Obama chose to forego single-payer health insurance in favor of trying to appease the private insurers, and the Republicans are resurgent, I don't see any improvement here either.

Third, we've defined what we do in a way that defeats productivity improvements. We measure learning in units of time. Until we stop doing that, no amount of efficiency-tinkering will make enough of a difference. A three-credit class required forty-five hours of seat time thirty years ago; it still does. On the employee side, pay raises based entirely on seniority mean that labor costs are almost completely divorced from performance. Add seniority-driven raises to lifetime tenure to the lack of mandatory retirement, and you have a perfect inflationary spiral. Any industry without productivity improvements is in for a world of economic hurt sooner or later.

Fourth, unlike almost every other sector except health care, we have to invest in technology even when it doesn’t improve our own productivity. IT is a monster expense that just keeps growing, and many of the more specialized programs have to spend megabucks to keep current with developments in the field. (Do you have any idea what patient simulators cost these days?) All that investment doesn’t show up in our own productivity, in “dollars per hour” terms.

Fifth would be the various unfunded mandates. “Compliance” is one of those magic words that diverts money from other things. In the 1980’s, the college didn’t even have an office for students with disabilities. Now it encompasses a series of offices, with several full-time employees and lots of assistive technology. The money for that is purely internal. Similarly, with every new reporting requirement we need appropriate software, usually with consultant costs.

Sixth, though, and I know some folks don't want to hear it, is flat-out plutocracy. In the worst recession in several generations, the main political debate is over how much to cut taxes on the very wealthiest. That's so staggeringly obtuse that even pointing it out seems futile. The recent New York Times budget widget was inadvertently revealing; when I used it, I got a surplus in 2015 and a tiny deficit in 2030. All I had to do was to raise taxes on the wealthy back to Clinton-era levels -- we’re not exactly talking Sweden here -- and stop fighting wars of choice. That’s it. That’s all it took. Doing nothing more than that, I could put the budget in surplus, which could go, say, for aid to the states to preserve basic services. This ain’t rocket science.

But those choices are considered so far out of the mainstream in American political discourse that you’re considered self-discrediting for even bringing them up. The budget widget’s first several options all involved cutting money to the middle class and poor -- that’s what gets you taken seriously now. Suggesting raising the retirement age marks you as a sober realist; suggesting pulling out of Afghanistan and Iraq makes you a loony lefty.

Yes, public higher ed has some severe internal challenges. Some are self-inflicted, like tenure and the credit hour; others are externally imposed, like state cuts and the repeal of the mandatory retirement age. The internal culture only works when there’s growth; when there isn’t, we exploit the hell out of adjuncts to maintain the comfort of the superannuated. But even granting all of that, it’s hard to get ahead of the curve when the political culture beats up on any public servants who don’t carry guns. As long as wars, health insurers, and financial services companies keep bleeding us dry, no amount of internal reform will make up the difference.

Sorry for the rant. Every so often, I just get tired of beating my head against a wall.

Comments:
"On the employee side, pay raises based entirely on seniority mean that labor costs are almost completely divorced from performance."

I get that this is the case at your particular community college. To be fair, however, this is not the case across all of higher education. At my non-union shop, we don't get step-raises. We get raises on merit. (According to our president, 100% of raises should be merit pay, though the departments do have some discretion in deciding how to allocate the pool of money for raises, when it exists, as long as at least 50% is merit. In our department, we've tended to go with 50% merit and 50% a flat raise, in an attempt to alleviate some of the horrifying realities of salary compression on people who aren't doing as much on paper but who often are the people doing huge amounts of service, student advising, etc.)
 
My four year school hasn't seen raises in years. We are allowed to give folks a little more money if we can prove their job has changed/expanded in a significant way, but there are only so many times you can pull the lever on that exception.

Its a real problem for managers who want to keep good employees. I've been at the job less than a year and have already seen half a dozen talented people whom we didn't want to lose go out the door. The institution touts generous benefits in lieu of pay, but it's a poor argument. People aren't going to work for a pension that might pay off in 20 years when they need to pay their rent now.
 
"Sixth, though, and I know some folks don't want to hear it, is flat-out plutocracy. In the worst recession in several generations, the main political debate is over how much to cut taxes on the very wealthiest."

The proposal that the deficit commission came up with cuts rates not necessarily taxes. If you zero out or cap deductions which disproportionately benefit the rich and treat capital gains (where the super rich get most of the income) as ordinary income then you will in fact be raising taxes on the upper middle class and the super rich. That really isn't controversial.
 
"At my non-union shop, we don't get step-raises. We get raises on merit."

I also work in a non-union shop, and there's no such thing as a merit raise here. It's very frustrating, and it contributes to a culture of mediocrity, particularly among staff and tenured faculty. As a staff member, I know that I'm unlikely to be fired, but I'm also not going to get rewarded, even though I have improved my office's work in measurable quantitative and qualitative ways. There are no reasons besides pride and concern for our students for me to work hard.
 
@DD: Plutocracy is kind of the beginning and the end of the discussion. Education will always be about as productive as it's going to be; it simply takes a certain amount of time by a skilled person in a classroom to teach a certain number of students how to write coherently. We really haven't found any ways to improve that, mainly because the input is correction time, which cannot be improved upon.

But we as a society have decided to hate working people and deny them any sort of opportunity. And until that changes, a lot of other things won't.
 
@Dean Dad
First, on the main thrust of your argument about state funding- if you can come up with something for your readers to do about state funding of CCs, I'll be glad to do it.

Your point about open-endedness of educational missions is very illuminating. I think it helps explain why you have so many well off K-12 suburban school districts who can spend money- always on reasonable things (e.g. nice computers)- and yet get no more bang-for-buck on things like standardized tests. It's important because so many people see that and assume there is a lot of slack in education (which is *not* a valid way of thinking about the whole of the K-12 education system's problems... not when there are classrooms that can't afford chairs).

I've never quite groked your arguments against calculating things as seat-time. Perhaps we don't agree what "productivity" looks like? I can see that in a factory model- in which you look primarily at throughput of students- the credit hour is very hampering. But it seems to me that things like transfer rates, success of transfer students, job placement rates, salaries of alumni... all of those are valid measures of CC productivity that can be analyzed using the current credit-hour framework.

@SW-
I've seen a lot of psychological data that suggests that financially rewarding any given activity removes the internal motivation for it. I've seen some social science data that suggests that performance drops spectacularly fast in climates of extreme uncertainty. Why I'm sure you *personally* find pride/concern for students unsatisfying, and would totally step up if only they would pay you more, do you have any data to suggest that the practices you observe *actually* lead to a 'culture of mediocrity" OR that merit pay would actually produce better work?
 
Our U has merit raises, but the pool is so small (when it exists) that the difference between meeting expectations and significantly exceeding them sometimes comes out to a 0.25 percentage point differential in raises. That might pay off in 30 years worth of compound raises, but since many of us are looking at retirement in 2 - 5 years, it's not very impressive.

However, I have not noticed any diminution in the effort we put forth for our students, even as administration is pushing us very hard to devote a great deal more time to scholarship.
 
Becca, I make significantly below the national average for people in my position. I work hard and seek to improve because I have pride and I care about the students here. But I can't eat pride or use it to pay my light bill or put it in my IRA.

We lose a lot of good staff after 4-5 years because they cannot advance, do not receive raises based on their performance, and get tired of beating their heads against the wall. I don't have a lot of data, but I can tell you that at my particular institution, the lack of merit raises, lack of opportunity for promotion, and resistance to change the campus "culture" makes a lot of staff members frustrated or complacent. Many of us still do the best we can because we care. Others operate on cruise-control, because they have no incentive not to.

All of this is taking away from DD's larger points, so I'm going to end my contributions now.
 
I understand perfectly well that getting elderly UNIVERSITY faculty to retire is nigh impossible if they are allowed to carry a 1-1 load even when their research drops to zero. I've seen it at many places. However, we don't have that happening with a 5-5 load at our CC.

Dean Dad, what fraction of your CC's faculty continue to work past the Medicare eligibility age (65) or the "full retirement age" defined by Social Security (66?) and/or full vesting in your pension system? The only faculty at our college that work much past 66 or 67 are ones who have not reached full vesting at that age, while other stay well past full vesting until eligible for Medicare at 65.
 
There is an elephant in the room in the comments discussion, and it's the definition of 'merit pay.' What does that mean, and how is it measured? There is no way to measure merit in this context without broken metrics ripe for abuse and manipulation.
 
However, we don't have that happening with a 5-5 load at our CC.

Dean Dad, what fraction of your CC's faculty continue to work past the Medicare eligibility age (65) or the "full retirement age" defined by Social Security (66?) and/or full vesting in your pension system? The only faculty at our college that work much past 66 or 67 are ones who have not reached full vesting at that age, while other stay well past full vesting until eligible for Medicare at 65.


I will be 65 in a few weeks and will be completely vested in my state's retirement system in three more semesters. But I'm seriously worried that the state will default on its pension obligations.

How could I dare to and why would I want to retire in a climate of permantent austerity?
 
Anonymous, my Dad taught me how to add up the pros and cons on each side of sheet of paper. Suppose your state defaults on retirement in 5 years. Who gets more money out of that system, the person who retires now or the one who retires 5 years from now? Are you ready for the depression that follows?

Hey, I'm worried that my state legislature will loot our sound retirement system for political gain. Other than calling thieves thieves, I also have a Plan B that will be implemented under existing law should they do that.
 
I brought up the alternative view on merit pay precisely *because* it is difficult to define merit. That means that if you pay everybody less than what they are worth, and create a convoluted system for merit pay, you keep them arguing about the merit pay and not joining forces to dismantle the plutocracy.
 
cc physicist--the question is not how I can maximize my return if the state eventually defaults on pensions.

If I assume it will default--and it is pretty deep in a bad hole--, then I better hold on to the relatively sure thing I have: my job. I could survive after retirement without my pension, but living the life of penury--squeezing ever frippin penny--I lived in my early 20s is not appealing.

So, I might choose to keep working. One fellow at my school, a Stakhanovite Hero of Labor indeed, continues to pull 5 + 5 at age 80.

Of course, it's also possible that our new teaparty governor will figure out that the way to save some money is to adjunctize completely and do away with fulltimers with their silly insurance and benefits.

My problems and worries and my state's problems don't quite address DD's continual underlying concern: that a lot of old dogs hold on long past their sell-by date, causing many unpleasant consequences. I may become part of that problem, dd.
 
"The proposal that the deficit commission came up with cuts rates not necessarily taxes."

A small thing, but there is no deficit commission proposal. The Simpson-Bowles proposal was a draft put together by the co-chairs, which was not endorsed by the commission as a whole. There's already one competing proposal out there from other commissioners.
 
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