Americans Working Longer, Harder and Paid Less

Huck/Konopacki Labor Cartoons

The working and living standards for the majority of Americans have been on a downward spiral since the 1970s. While workers’ productivity is up, allowing their bosses to bring in greater profits, most workers have been working longer hours and doing more work per hour, while their wages have remained stagnant, according to the recent report State of Working America, 12th Edition (Mishel et al. 2012)

Below are some of the report’s findings (summarized by the Economic Policy Institute, where Mishel is president):

In 2007, the average American worker toiled 1,868 hours, 181 hours longer (10.7% more) than in 1979—the equivalent of an extra 4.5 weeks per year. This growth was most pronounced among women, who are now working 20.3% longer than they did in 1979. However, this is primarily because there were far fewer women being paid for their labor in 1979. Overall, men saw a 4.4% increase in their working hours, and this was primarily over and above what they were already working. There was also a large increase in working hours among the lowest 20% of wage earners, whose working hours increased 22% (compared with a 7.6% increase for the top 5% of earners), again due mostly to hours over and beyond what they were already working.

One reason for the increased working hours was, of course, increased demands by employers. However, workers’ wages were stagnant during the period, in many cases not keeping up with inflation, forcing people to work longer hours to make ends meet. Thus, in terms of spending power and the value of their paychecks, workers living standards were either stagnant or declined during this period.

For example, annual income increased during this time period, but for the majority of workers this was the result of their longer working hours—not from any significant increase in hourly wages. For the lowest-wage workers, hourly wages rose only 7.7% over the past three decades. However, for the past decade, their wages have actually declined 3.2%. In contrast, the hourly wages of the top 5% of wage earners increased by 30.2%, and this does not even include the bulk of their income, which comes from non-wage compensation and investments (e.g., stock options, capital gains).

What little growth American workers have seen in hourly wages was concentrated in the late 1990s, when unemployment was low and the minimum wage was increased. Even for middle wage earners, whose overall hourly wages increased 15.8% between 1979 and 2007, total hourly wage growth was only 5.3% when 1995-2000 is excluded.

Skyrocketing Executive Pay and the Educational Salary Gap

Superintendent Fat Cat?

Despite the passage of California’s Proposition 30, which holds the state’s education funding steady at 2011-2012 levels, none of the $20 billion that has been slashed from K-12 funding over the past 4 years will be restored. Consequently, school districts will continue to operate on austere budgets, with overcrowded classrooms, reduced course offerings, and reduced numbers of teachers, librarians, nurses and counselors. This has led to a record 188 state school districts at risk of financial collapse. Yet, like the bailed out banks and automobile industry, many districts have managed to find the money to offer their top executives lavish raises.

Perhaps the most notable example is Los Angeles Unified School District (LAUSD)—the nation’s second largest school district—which has struggled with a $2.8 billion deficit over the past five years, while laying off 10,000 teachers. At the same time as LAUSD has cut teachers and services, it has boosted Superintendent John Deasy’s salary from $275,000 to $330,000 (according to the Bay Citizen)—roughly five times the average teacher’s salary. Since 2009, LAUSD has increased its superintendent’s salary 32%.

California Watch has investigated 40 of the largest districts on the state’s financial watch list (those at risk of financial insolvency) and found that more than half have raised their superintendents’ salaries since 2009. For example, Riverside Unified School District raised Superintendent Richard Miller’s pay from $267,208 to $314,963, despite having cut $100 million from its budget since 2008-09. The Lynwood Unified School District raised its superintendent’s pay by roughly 23%, from $200,000 to $245,000, two years ago, even though it has had ongoing budget deficits, including its current deficit of $6.8 million.

While the primary cause of California’s education budget problems has been the declining business, property and income tax rates, overly generous executive pay has added to the problem. In New Jersey, Governor Chris Christie capped superintendent salaries and New York is considering similar legislation, the Bay Citizen reported. A superintendent pay cap is not currently under consideration in California.

Proponents of high superintendent pay argue that superintendents are charged with much bigger and more important responsibilities (i.e., protecting and nurturing the “innocents”) than are corporate executives, yet they are paid only a fraction of what CEO’s of similar sized companies are paid. On the other hand, CEO pay has been skyrocketing over the past few decades and is now at its highest level ever relative to the median pay of their employees, contributing to the growing wealth and income gap and declining working and living standards for the majority of Americans.

It is also complete nonsense that executives need or deserve to earn 1,000 times, 100 times or even 2 times more than their employees. This argument is based on the fallacious notion that responsibility for large budgets and large numbers of employees is tougher and more valuable than other occupations. Yet it is the employees who do all the really difficult work. It is the employees who create the profits in private business and the bosses who pocket the difference between the wealth they create and their salaries. Though superintendents do not earn profits from their teachers’ labor, they have far more control over their own working conditions (and consequently less stress) than teachers. It is the teachers who have the most direct influence over the safety and success of the “innocents.” It is the teachers who design creative and engaging curriculum; create positive, nurturing classroom environments; and who communicate with parents about their children’s wellbeing and needs. So if it’s really all about the children, then it is the teachers, not the superintendents, who should be getting the six-figure salaries and 20-30% raises. 

The Deplorable State of Adjunct Faculty Compensation

It is not just K-12 public school teachers who are getting squeezed by budget cuts, stagnant pay, declining working conditions and attacks on tenure. Today, nearly 70% of all college and university faculty are non-tenured, part-time adjunct faculty (according to a recent piece in Truth Out), with no job security and generally lower pay and fewer benefits than their tenured colleagues.

Many of these professors find themselves having to accept teaching positions at multiple universities and colleges just to make enough to support themselves, sometimes having to commute to two or three different campuses in one day. It is not uncommon in the community colleges for adjuncts to earn as little as $2,500 per class. For adjuncts teaching 3-4 classes per semester, this translates to $15,000-20,000 per year, often without any benefits.

Some adjuncts make good money. At UCSF, for example, adjunct professors can earn six-figure salaries. However, their job security is based entirely on their ability to compete for scarce research grants, as the university provides them with little or no additional funding and makes no commitment to support them if their grants run dry.  These adjuncts, who must constantly contend with the threat of losing their labs and their income, often put in 60-80 hour weeks just to keep their grants flowing and, consequently, suffer an incredible amount of pressure and stress.

A number of factors have been contributing to the problem, including the nation’s economic crisis, which has exacerbated many states’ existing budget difficulties. In order to close their deficits, universities have not only been cutting classes and raising tuition for their students; they have also been squeezing their employees by cutting wages, benefits and teaching assignments. At the same time, the number of college graduates competing for these jobs has been rising. This may be part of the reason why the number of people possessing PhDs who receive public assistance has tripled over the last three years. Between 2007 and 2010 the number grew from 9,776 to 33,655.

However, the decline in tenured faculty positions started well before the current economic crisis. The New York Times reported in November, 2007, that tenured faculty had already become the minority on campuses across the country. 30 years ago, adjuncts made up only 43% of faculty nation-wide, whereas by 2007 they comprised 70% of faculty. The Times attributed the trend to administrators’ desire to save money and have greater “flexibility.” What this really means is greater ease in manipulating, coercing and firing, since part-timers and adjuncts, in general, have little or no job security and must toe the line and keep their mouths shut if they want to keep their jobs.

It also means more money is available for executive compensation, which has been on the rise even as tuition has climbed and employee compensation has declined. The San Francisco Chronicle reported this week that executive pay at the nation’s private colleges climbed 2.8% between 2009 and 2010 (the last year in which records are available). The median compensation for the nearly 500 presidents of private universities with budgets of at least $50 million was nearly $400,000, with 36 executives earning more than $1 million annually. However, executive compensation at public universities has also been rising rapidly. California Senator Leland Yee recently introduced legislation that would bar the state’s UC and CSU systems from giving any raises or bonuses until two years after the latest fee hikes.

As with many aspects of the education system, the interests of teachers are linked to the wellbeing of students. Several studies have found that freshmen taught by part-timers are more likely to drop out. This is probably due to the fact that part-timers and adjuncts, in general, have more work to do and less time to do it, forcing many to reduce or abandon office hours. They are more likely to accept excessive or unreasonable course loads in order to increase their salaries or to be eligible for benefits. They also are less likely to advocate for better conditions for themselves and their students out of fear of getting fewer (or no) classes in the coming semesters.

Welfare By The Elite, For the Elite at CSU

The California State University (CSU) trustees decided to offer three of its presidents nearly $85,000 in raises on Tuesday, despite its ongoing budget shortfalls that have led to layoffs, slashing of course offerings, wage freezes and double digit tuition hikes  (including a 12% tuition increase last year). The university faces another midyear tuition increase, pay cuts for teachers and hundreds more layoffs if the November tax measure fails. The trustees have justified the move by arguing that the money will come only from private donors who wish to augment the pay of CSU’s executives, the SF Chronicle reported today.

This begs the question of who would give away money to a university expressly to boost the pay of its bosses, all of whom already earn over $300,000 per year (not including perks like subsidized housing and a $12,000 per year vehicle allowance), while allowing these same universities to continue to squeeze the rest of their employees and their students?

The answer should be obvious: wealthier members of the ruling elite.

It is the wealthy who give the largest share of private donations to universities and they do not do it primarily for altruistic reasons. Rather, they get tax benefits. Sometimes they get their name on a building. It can provide them with positive press. And in the case of executive pay, it is an expression of class solidarity.

Two new presidents, Dianne Harrison (CSU Northridge) and Tomas Morales (CSU San Bernardino), will get 10% raises above what their predecessors made, while Les Wong (San Francisco State) will earn a 9% raise. CSU Chancellor Charles Reed insisted that the donations were not being diverted from other purposes, like scholarships. Yet the financial aid for the presidents will be administered by the same foundation that administers financial aid for the students.

The gifts to the executives comes in the wake of revelations that CSU spent millions of taxpayer dollars renovating the presidents’ homes and the recent strike authorization vote by CSU faculty, which set the stage for the largest university strike in U.S. history.

Tax Dollars at Work: CSU Spent $2 Million on Presidential Homes

Tuition at the California State University (CSU) system increased from $1,428 per year in 2001-2 to $5,472 in 2011, with another 9% rate hike planned for the fall of 2012. Because of budget cuts and financial insecurity, the university has also cut course offerings and services. Yet in that same 10-year period, CSU spent over $2 million renovating eight university-owned presidential residences, including such extras as expanding garages and hiring interior designers, according to a report this week in the Bay Citizen.

In 2012, alone, CSU spent over $400,000 remodeling presidential homes at CSU Fullerton and CSU Northridge, in the Los Angeles Area. In 2011, it spent $257,000 on kitchen upgrades and swimming pool replastering at San Diego State, and another $230,000 on kitchen upgrades and lighting at Cal Poly San Luis Obsipo. Cal Poly also spent $200,000 on renovations in 2010--$831,000 total since 2004, 99% of which was paid for through state funding.

11 university presidents live in these lavish homes at tax-payers’ expense. Another 12 university presidents are getting $60,000 per year in housing allowances to covering living costs off campus. All this is on top of their six-figure salaries (some have also received raises), which alone ought to be sufficient to live comfortably within easy commuting distance of any of the CSU campuses.