| Coalition of University Employees (CUE) | 2855 Telegraph Ave., Suite #302, Berkeley, CA 94705 Contact CUE (510) 845-2221 (phone), (510) 845-7444 (FAX) |
A NEUTRAL ARBITRATOR'S IN-DEPTH ANALYSIS OF UC CLERICAL WAGES IS ABOUT TO BE RELEASED, AND WILL RESOLVE ONCE AND FOR ALL WHO IS RIGHT AND WHO IS WRONG - CAN AND SHOULD UC PROVIDE WAGE INCREASES TO CLERICALS?
Background:
In August 2004, the State of California established a fact-finding panel to recommend a settlement of the current impasse between the University of California and the union representing UC clericals, the Coalition of University Employees (CUE). This panel, appointed pursuant to Section 3591 of the California Government Code, included one member appointed by the University (Peter Chester, a University Labor Relations Assistant Director), one member appointed by CUE (Henry C. Levy, a certified public accountant) and a neutral Chairperson selected jointly by the parties -- widely respected Arbitrator Gerald R. McKay. The panel held a five-day evidentiary hearing in November 2004, and the parties submitted over a thousand pages of documents for the panel to review.
Neutral fact-finder and arbitrator McKay has now issued his report, which will become public on February 17, 2005. (It becomes public ten days after the report is issued, as required by the temporary confidentiality provision in the California Government Code.) In the report, McKay will finally resolve who is right: UC, representatives of which claim that it cannot afford to provide wage increases to its clericals; or CUE, representatives of which claim that exactly the opposite is true. UC not only has enjoyed huge profits in recent years, but has diverted money specifically earmarked for clerical wages away from that purpose, spending the money elsewhere or adding to the University's vast reserves.
You can receive an electronic or printed copy of the full report after 8:00 am on February 17 by contacting CUE at 510-841-0700 or emailing berkeleycue@earthlink.net.
The Primary Questions That Arbitrator McKay's Report Will Finally Resolve:
Several issues in dispute may be particularly shocking to the UC community, the Legislature, the Governor and the people of California. First, Arbitrator McKay will resolve whether CUE is correct in its allegation that UC improperly diverts money earmarked for clerical wage increases, instead spending the money for other purposes or adding the money to reserves. Indeed, according to evidence presented at the fact-finding, in 2003-04 alone the University diverted $20 million intended for clerical wage increases, choosing to spend the money on other purposes or add the money to reserves.
Further information regarding this issue:
In 2003-04, the University had $20 million in "non-State" money (money from sources other than the State) earmarked toward clerical wages. The cash-strapped State of California was unable to kick in an additional $10 million (which, when combined with the University's $20 million, would have permitted the University to provide an across-the-board, six-percent wage increase for all clericals), and UC used this excuse to take its $20 million in non-State money and divert it away from clerical wage increases. This $20 million includes money earned by the University on research contracts, grants and other such funding sources that build in a particular percentage increase each year for wages. The University takes that money and does not spend it on wage increases.
Another way of putting it: UC clerical wages are 1/3 funded by the State, and that funding source has not increased for several years. However, clerical wages are 2/3 funded by many other revenues sources that have been skyrocketing (including medical center revenues, which fund the wages of approximately 4000 clericals). Yet UC refuses to look at all of its available resources in determining a fair clerical wage offer, instead hiding behind the State's fiscal crisis by using frozen State funding as
Adding insult to injury, there are numerous other employee groups at UC that have received wage increases in the last year, including a number of groups whose funding comes almost exclusively from the State, and for whom the State provided no money for wage increases. In other words, for the groups whose funding has been frozen, UC has nevertheless taken money from its ample non-State funds in order to give these employees increases. For clericals, whose wage funding sources are on the rise, the University declines to give raises, diverting clerical salary funds to other uses.
UC tells the public that it is having a fiscal crisis. CUE asserts that nothing could be further from the truth -- in 2003-04 alone the University had a net income (revenues minus expenses) of $786 million. In the corporate world, this would be termed "annual profit." But because UC is a nonprofit, UC calls it simply "annual net income" -- the excess revenue taken in during the year but not spent. This was the best bottom-line number UC has ever had, according to data presented at fact-finding. But previous years were also quite profitable for UC; for instance, in 2002-03, UC had a net income of $559 million. Arbitrator McKay's about-to-be-released report will show who is right and who is wrong.
Additional significant aspects of this question:
These profit figures are calculated after taking into account the fact that UC spent between $2 billion and $2.5 billion on capital projects each of the last two years. In other words, even after spending extraordinary sums on building, UC is still netting a very high profit.
While UC undoubtedly has many important items to spend its money on, the University's chief witness on financial matters admitted under oath that he did not predict any change in UC's pattern of taking in many millions of dollars more than it spends each year.
One of many reasons that UC made such an extraordinary profit last year: it declined to spend the $20 million in non-State money earmarked for clerical wages, mentioned above. Of course, had it spent that money for the intended purposes of clerical wage increases, UC still would have had an extremely healthy profit of $766 million. But, in the utmost irony, UC actually does better financially in years such as 2003-04, in which it uses the State's fiscal crisis as an excuse to withhold wage increases.
CUE has long asserted that shocking wage disparities are found when UC is compared to comparable employers -- when assistant positions at UC are compared to comparable positions at CSU, UC clericals earn approximately 22.7% less. For library assistants, the wage gap is even more egregious -- 33%. Arbitrator McKay will provide a neutral analysis of this issue.
Additional significant aspects of this question:
The fact that UC pays clericals wages that are so much lower than wages at CSU is especially troubling because CSU is 72% State funded, while UC is less than 15% State-funded, meaning that the State's fiscal crisis has led to very real cuts in CSU's overall available revenues, unlike the situation at UC.
Clericals are falling further and further behind: While the cost of living has increased 26.3% in the past 7 years, clerical pay ranges have gone up by only 9.5% in the same time period.
What's Next After Release of the Report?
UC has already stated that it does not plan to follow any recommendation that Neutral Arbitrator McKay may have if that recommendation involves a wage increase. CUE, however, will not let the matter drop. CUE members have options, including the right to vote on whether to call a strike to protest the University's immoral and inappropriate pay practices, and to force the University to take CUE seriously when it demands an end to those practices.