Buildup to a Strike

Once a promising statewide public university system designed to provide tuition-free education to California’s working class, the CSU has degenerated into a corporatized behemoth that mocks the democratic values upon which it was founded. Students drown in debt to pay never-ending fee increases, professors scrape by on salaries smaller than those of preschool teachers, while unaccountable administrators rake in six-figure salaries and fringe benefits like free cars and homes.

The fall 2023 semester ended with the California Faculty Association holding one-day work stoppages at four different campuses. These were the latest developments in a labor dispute between the California State University management and the California Faculty Association.

Negotiations had come to a halt over the summer of 2023 after the two parties failed to find common ground on a set of proposals. Among the most significant is the CFA demand for a 12 percent general salary increase. CSU management rejected this proposal and counteroffered an immediate 5 percent increase, followed by two more conditional 5 percent raises, dependent on state allocations. However, with only 5 of 15 percent guaranteed, the offer does not amount to an increase in spending power considering last year’s 8 percent inflation rate. For this reason and others, CFA rejected the offer, and an official impasse was declared on August 9.

As covered in an earlier article, one of the biggest grievances was the income inequality between faculty and administrators. For example, full-time lecturers who hold a PhD receive a monthly salary of $5,400, while the chancellor’s monthly salary consists of $66,250, along with an $8,000 monthly housing stipend and a $1,000 auto stipend.

At the top of each of the twenty-three CSU campuses, presidents rake in annual salaries between $325,000 and $533,000, along with either free homes or annual housing allowances of $50,000 to $60,000. While management rejects proposals for a 12 percent faculty salary increase, numerous presidents have received raises of up to 29 percent. In other words, modest salary increases for those who do the primary academic labor are rejected by bureaucrats who give themselves even larger salary increases.

The salary disparities reflect a deeper issue: the abandonment of the principles upon which the CSU was based in favor of the neoliberal assault on all things public. Leading the way is a current batch of business-minded university administrators who disdain the values and ideals that, not long ago, held a healthy public education system as necessary to a robust democratic society. CSU management is an anti-intellectual cadre of academic bureaucrats, large parts of which do not hold doctorates or have made strikingly few contributions to their academic fields.

While management brings in six-figure salaries and contributes little to the academy, the teaching faculty struggles to obtain a stable, livable salary and benefits. In the good times — which are extremely rare — lecturers teach five courses per semester, qualify for health insurance, and make $65,000 per year. But each semester brings new obstacles; our classes — and our incomes — are regularly cut, often disqualifying us from benefits.

For example, in the last four years, I have yet to bank two consecutive five-course semesters. After enjoying a full teaching load in the fall, I have two courses scheduled for the spring semester, which translates to a loss of 60 percent of my income.

What is worse, “the good times” are actually pretty bad. Many of my students have deservedly landed good jobs with higher salaries than mine. One works in a local packinghouse driving a forklift, another is a supermarket clerk. To supplement meager incomes, many faculty pick up second or third jobs. After years of graduate school training and countless hours conducting doctoral research, publishing in peer-reviewed journals, and teaching huge course loads, the humiliation that university faculty are subjected to is indefensible.

For all the foregoing reasons, on December 18, the CFA Board of Directors voted to call a system-wide strike for the week of January 22–26 in coalition with Teamsters Local 2010. There was, however, one more opportunity to avoid beginning the new semester with a system-wide strike. On the week of January 8, another round of bargaining opened between CFA leadership and CSU management. However, after refusing to negotiate, management walked out of the meeting, thereby ensuring that students across the state would return to campuses riddled with strife and classrooms without professors.

Bunsis’s Report

As strike actions commence, administrators continue to roll out the same tired argument that the CSU cannot afford the salary increase for faculty. However, a recent analysis of the CSU’s audited financial statements by Howard Bunsis reveals that the institution is in near pristine financial health and more than equipped to pay the demanded increase.

According to Bunsis’s report, a 12 percent general salary increase would cost the CSU roughly $376 million, while the salary increase counteroffered by the CSU would cost roughly $154 million. Thus, the real question is if the CSU can afford the difference between these two proposals, which is $232 million.

In sixteen of the last seventeen years, the CSU has banked a larger surplus than $232 million. In twelve of the last seventeen years, the surplus exceeded $376 million. Not counting 2022, which was an impressive year of financial abundance, Bunsis’s report shows that the average surplus from 2006 to 2021 was $490 million. Thus, if recent history is any meaningful indicator of the ability to fund the salary increases demanded by CFA, the evidence is overwhelmingly clear that this can be done with ease.

This incredible ability to “save” money — or, put another way, to not spend the money collected from taxpayers to provide a public service — has led to a massive “reserve fund” (or savings account) of $8 billion, 80 percent of which is unrestricted and open for use. These financial practices have earned the CSU impeccable bond ratings at Moody’s and Standard and Poor’s (Aa2 and AA- respectively), which are based on both liquidity and financial margins. Although the CSU has argued that Bunsis’s analysis exaggerates the financial health of the CSU, these ratings agencies have reached similar conclusions.

With an $8 billion savings account and more than adequate surpluses in recent years, administrators are unable to use evidence from the CSU’s recent economic history to justify their rejection of the 12 percent salary increase. This has led management to present hypothetical doomsday scenarios of an austere future brought on by hypothetical declines in the CSU’s economic intake. Specifically, management has pointed to the instability of the two primary sources of income — state funding and student fees/tuition — to justify their rejection of the CFA proposal.

Despite management’s caution, there is no evidence to suggest that there will be a meaningful decline in these revenue sources. Regarding state funding, the 2023–2024 state budget includes an $800 million increase over the previous year, and the Legislative Analyst’s Office has forecasted that this will continue to increase through 2025.

Regarding student fees/tuition, this source of revenue will increase as well, since administrators have committed to raising tuition at an annual rate of 6 percent until at least 2029. According to the 2024–2025 CSU Operating Budget, this fee increase will provide the CSU an additional $148 million for the 2024–2025 academic year.

The most significant threat to this second source of income is declining enrollment. Paradoxically, rising tuition costs drive students out of the CSU, thereby driving down enrollment and decreasing this revenue stream. Considering the robust economic health of the university, increasing tuition is either rooted in a deeply flawed logic or a baffling desire to saddle students with unnecessary financial burdens.

Accounting for Austerity

It is worth anticipating possible solutions to management’s hypothetical austerity-plagued future, although CSU revenue streams appear to be reliable and increasing. Last year alone, the CSU banked a monumental surplus of roughly $2 billion (according to Standard and Poor, the surplus was $1.7 billion; according to Bunsis, it was $2.1 billion; according to Moody’s, it was $2.3 billion).

But just how far would this surplus go in the hypothetical austerity age imagined by CSU management? From 2015 to 2022, the average total of the CSU’s two primary sources of revenue (combined) was roughly $5.6 billion. Hence, even if those magically disappeared — and it is unlikely they will even decrease — the $8 billion dollar reserve fund would do more than fill the gap.

At a public institution with a mission of using public money to provide a public service, the astonishing growth of this reserve fund should be a scandal. The more than $8 billion savings account was amassed by not spending the financial resources that taxpayers intended to go to providing educational services.

Of course, in large part, it was built on the backs of underpaid professors. Adding millions of dollars to a savings account while faculty receive pitifully low salaries and research funding declines is a crude misallocation of public funds (from 2019 to 2022, research funding declined by $16 million). To be sure, nobody would deny that having an emergency financial safety net is a good idea. But an $8 billion reserve amassed by underpaying workers is different.

After conducting a review of the CSU’s financial statements, Howard Bunsis rightly asked “to what end” the reserve fund was being built. The bureaucrats who decide to not use public financial resources for a public service should be forced to answer this reasonable question.

Bunsis’s analysis of CSU spending uncovered other details that illuminate the priorities of management. As professors face large and increasing class sizes, the percentage spent on instruction pales in comparison to management. From fall 2018 to fall 2022, the number of executive and management employees increased by 6.4 percent, while instructional faculty increased by only 2.5 percent.

This translates to important financial figures: in 2019–2022, spending on instruction declined by $37 million, while “institutional support” increased by $215 million. Although shocking, this spending trend is completely in line with the broader neoliberal restructuring of the CSU — the bloat of university bureaucracy never stops increasing, while teaching and research are in constant decline.