Friday, November 14, 2008

Budget hole gets deeper. . .

Chancellor Wells sent out a carefully worded, yet ominous memo yesterday. The planning is already underway for serious cuts here on campus. He seems to be hinting that new searches are going to be put off while the student body will continue to grow. He also may be preparing us for a claim that he can not reduce administrative costs. The brief discussion about the new Director of Sustainability on the COLS list suggests this is the case.

Unfortunately, this is probably what we all expected. We are expected to deal with more students. I wonder when our whopping raise will be postponed.  How big will the tuition increase be?   

From the note:

As many of you know, while the Higher Learning Commission evaluation team lauded UW Oshkosh, they raised a serious concern regarding our all-too-thin administrative support — something unheard of in such reports. We have also acknowledged our need to appoint more tenure-track faculty and we realize our classified staff has been hit hard by earlier budget cuts. Much needed Growth Agenda funding was provided this year to help offset millions of dollars of earlier state funding cuts and to serve the recent and projected increase of more than 1,400 students. While we may have to delay some of the Growth Agenda searches, we will do our best to protect our base funding. It is obvious that we will have to continue to make tough budgetary planning decisions during six to nine months of budget planning uncertainty.

32 comments:

No Spin Answer said...

This is nothing more than the private sector has experienced for quite some time. labor is obviously the most costly component of any organization.
In tough economic times, labor is reduced. That should hold true in private industry and business, as well as public sector education and municipal government operations. You as professors and employees of the UW system should not be immune to the realities of economic conditions.

Uno Eimreit said...

What you say makes perfect sense in a theoretical way, but what are its real-world consequences?.

Let's say you are a parent of a UWO student, paying tuition for your son or daughter now for three years. One more year and they graduate! But what??? They can't get into any of the courses they need to complete their degree! Sections are closed, for lack of money to pay instructors. Maybe next year they can get into that course. So you end up paying five years or six years of tuition instead of four. What has that saved you? Ask any college student; they will tell you this is already far too common of an event.

You have a son or daughter of good not great academic record. They want to attend UWO. Ordinarily they would be admitted. But with the cuts, we can't admit as many students. Your child ends up living in your basement, sleeping till noon and playing video games till 3 AM, when not asking people, "You want fries with that?" Is that whgat you want? Of course, you could always send them to a private college like Lawrence or Marquette. Have you checked out their tuition lately?

It is all very easy to stand there all self-righteous and lecture us ivory-tower academics on real world realities, based on your allegience to a particular socio-economic-political philosophy (or maybe just selfish parsimony). It is quite another to look into the eyes of an 18- or 21-year-old, eager to get on with life and become a productive member of society and say, "Sorry, kid. No room for you. Maybe next year."

You may think you're just hurting a bunch of liberal elitests when you "stick it to" UW System, but you are hurting families and young people. You are ensuring that, instead of a bright 21st century future based on an educated workforce, Wisconsin will be condemned to an uncertain future of unemployment and disappointment.

Instead of investing in a state whose economy will be more resistent to economic downturns, you are ensuring that this cycle of budget crises goes on and on and on.

Industry and Education said...

6:43 said:
"They can't get into any of the courses they need to complete their degree! Sections are closed, for lack of money to pay instructors."

That is where excellent management and administration is required. A strategic view must be taken of all areas to insure positions are eliminated in areas where they are in excess. Again, this is what is done in industry. Whole manufacturing departments are rarely closed. Select labor in select areas is reduced to insure product keeps flowing. Apply the same rules to education in the UW system. You as an employee certainly are not comfortable hearing this, but you need to so you are prepared for the prospect of a labor reduction reengineering of the system.

uno eimreit said...

And that is exactly what has evolved over time. High demand disciplines like biology have large faculties, low demand ones have smaller faculties. WE have already done that.

It is all very easy for an arm-chair didact to throw out one-size-fits-all solutions in areas for which he has neither experience nor knowledge. If it seems such an easy solution to you, it is only because you have no idea what you are talking about.

Reduce Labor Costs said...

You are correct, I don't, but we have some excellent well compensated managers and administrators who do. They will make the necessary staffing cuts to remain responsive to customers needs, while insuring they receive the best value from the labor dollars they spend.
The high cost of labor needs to be reduced in these difficult economic times.

uno eimreit said...

Yes, you've said that. Several times. And I can say, "We need to be able to hover 100 ft above the ground without the aid of any sort of machinery," but that doesn't mean it's humanly possible.

You can keep chanting your mantra about reducing labor costs, but I am telling you there is no way to do it without negatively impacting families trying to send their children to college. You see it as impacting no one but a bunch of ivory-tower academics, but I am telling you it most seriously impacts the very people you purport to want to help, the average working family.

What does it profit a working man to save a few dollars on his state taxes, if he ends up paying another $8,000 in tuition because his kid was closed out of needed classes and ended up going to college five or six years? You answer me that cogently, and then perhaps someone will take your comments seriously.

Anonymous said...

Uno said: "but I am telling you there is no way to do it without negatively impacting families trying to send their children to college"

So you think keeping taxes high to pay your compensation makes life easy on families?

Are you nuts or something?

uno eimreit said...

Well, you apparently aren't much on reading, so I'll simply repeat what I wrote before:
---------------
Let's say you are a parent of a UWO student, paying tuition for your son or daughter now for three years. One more year and they graduate! But what??? They can't get into any of the courses they need to complete their degree! Sections are closed, for lack of money to pay instructors. Maybe next year they can get into that course. So you end up paying five years or six years of tuition instead of four. What has that saved you? Ask any college student; they will tell you this is already far too common of an event.

You have a son or daughter of good not great academic record. They want to attend UWO. Ordinarily they would be admitted. But with the cuts, we can't admit as many students. Your child ends up living in your basement, sleeping till noon and playing video games till 3 AM, when not asking people, "You want fries with that?" Is that whgat you want? Of course, you could always send them to a private college like Lawrence or Marquette. Have you checked out their tuition lately?
--------------
Under America's time-tested capitalist free market system, the cost of labor is set by the market, based on supply and demand. I trust you have no problem with our economic system in general, correct?

Well, what you are paying is what it costs to have Ph.D.s in your service as educators and researchers. (In point of fact, tax revenues only cover 28% of the cost of running UW System.) If you are unwilling to meet the market price, labor will migrate to less benighted states and Wisconsin's economy will suffer even more. Do not be penny-wise and pound-foolish. Do not kill the goose that lays the golden eggs.

Anonymous said...

The secret problem with America - Union Labor.

For anyone who has ever studied free market economics, or even simply heard the term “collective bargaining”, it should come as no surprise that the industries dominated by unions are dying a slow and painful death.

Just this month for example, GM announced that it had hemorrhaged more than $2.5 billion (WITH A “B”) in losses last quarter. That same loss over 4 quarters would equal $10B, or close to the total GDP of the Republic of Congo, a country with over 4,000,000 inhabitants. To put this loss in perspective, it means that each of the roughly 266,000 employees of GM would have “added” a net negative value to the company of roughly $36,000 per person! Let’s ponder that for a moment. Essentially, what that means is that each employee of General Motors costs the company $36,000 and returns ZERO value on that investment. Yet, they have the audacity (of hope as it were) to request a taxpayer bailout to line the pockets of executives who mismanage, union workers who fail to produce a competitive product at a competitive rate, and shareholders who were dumb enough to buy into this garbage. How anyone can make the argument that the American public needs to be on the hook for one more penny to support these failures is beyond me.

Let’s imagine ourselves for a moment as a huge venture capital group, Uncle Sam Ventures Inc. We control a pool of money that can be used on any number of investments, but that pool is limited, and we must choose where we invest those funds wisely. Our goal is to ensure that those resources we choose to allocate are used to fund ventures that are financially sound, and ultimately will generate enough revenue to justify the initial investment, and eventually, reward us for our prudent investment by delivering profits.

General Motor’s value proposition to us in this case is as follows. What they are trying to sell here, is the idea that the $36,000 spent per employee per year to yield a $0 return, will improve if we just give them $50 billion dollars to turn things around. At the same rate of efficiency as they currently display, that $50,000,000,000 would yield a result of a loss of $186,000 per year per employee. No VC firm in the world would even let these guys in the door.

The next logical question to ask our-selves is why is GM so inefficient? The simple answer is that they pay too much for labor that is not necessarily differentiated in efficiency, ingenuity, creativity or effectiveness. However, the bigger problem over time is that the union’s workers first loyalty is to the union, and the union bosses, not the overall health and well-being of their employer. That adversarial stance has finally broken the back of a once great company, and here is how it happened.

For decades, if the UAW didn’t get the new retirement package they wanted, they would strike. If they didn’t get the mandatory raises for dead-weight clock punching employees, they would strike. If they didn’t get higher overtime benefits, they would strike. This went on and on and resulted in over inflated wages and benefits for the labor forces at the big 3.

From the perspective of the union, this should be seen as a win for labor. However, what these union workers and bosses don’t seem willing or able to understand is that they have no long-term BATNA (best alternative to a negotiated agreement). Now, their policies and shakedowns have resulted in bloated organizations that cannot sustain themselves through their own efforts due to the unrealistic compensation expectations of their workforces.

They cannot make enough money on a Chevy Malibu, for example, to offset the costs associated with producing said car. In the end, the irony may be that the best thing that could happen to the US auto industry would be for the big three to go out of business. In a sense, it would be like the strike in Ayn Rand’s ode to capitalism, Atlas Shrugged, when the productive class of society finally refused to support the altruistic efforts of the left, and unplugs from society.

Perhaps through the destruction of a fat and unhealthy system, a newer, more efficient model will emerge, resulting in profits, new jobs and tax revenue. This seems like a much better long-term outcome for the consumers and the taxpayers.

Flash Foster said...

Look, Mr. Anti-Union jerk, just go back to Jonathan Krause's blog, okay?

Here's a huge newsflash for you. moron:

UNIVERSITY FACULTIES ARE FORBIDDEN BY STATE LAW TO UNIONIZE!!!!

By your warped logic, things ought to be just GREAT here, since college profs can't have a union!!!

Anonymous said...

Mr. Foster,
Anti-union jerk?
It that some typical union thug/scare tactic?

He has the right to state his view; just as you have the right to voice you’re opposition.
Each side is presenting a fair position to support their opinion.

Debate is health.

Thug-like squelching of debate is not the way this University system chooses to operate.

Flash Foster said...

Go to Jonathan Krauses's "My Two Cents Worth" and see how this knee-jerk reactionary monopolizes every conversation with his cut-and-paste tactics. Intelligent discourse requires that the party at least be smart enough to realize that FACULTIES CANNOT UNIONIZE in this state! What's the point in dishing out his line on how awful unions are, in a forum dedicated to PEOPLE WHO CAN'T BELONG TO A UNION!!!

Anonymous said...

It's good to hear some discussion about how unions impact the economy. We've certainly heard much about how Corporate America along with greedy CEO's have caused havoc to the economy. It appears that some of the unions past practices have also lead us down the poor economic path we find outselves on.

nemesis said...

>>It appears that some of the unions past practices have also lead us down the poor economic path we find outselves on.<<

Then the people of Wisconsin need to decide if they want to continue to belittle and insult university faculties. It is very likely that they will be offered an opportunity to unionize by the new legislature.

Under ordinary circumstances, most professionals have no interest in belonging to a union. But after being abused and cheated by the state for so long, the odds are very good that the university profs will go for it, and the taxpayers of the state will have yet another public sector union to contend with. What's THAT going to cost you?? Treat your faculties decently and you wouldn't have this problem!

Anonymous said...

Most professionals are not members of unions. It seems odd that many levels of public sector are unions even when they are professionals such as the high ranks in the police and fire departments to name jsut two.

flash foster said...

With every loud-mouth blowhard ignoramus in town thinking he's the boss of any public sector employee, I can well imagine that they'd feel the need to unionize to protect themselves from all the Scrooge-wannabes who think they don't deserve more than a dollar a day. University faculties will do the same for the same reason: to buffer themselves and the families that depend on them from the vicissitudes of anti-intellectual parsimony.

Anonymous said...

Flash,
From the tone of your posting, it doen't appear you're as professional as you think you are.
Maybe you are a bluecollar person. Join the union, see the world!

Flash Foster said...

Yeah, Anonymous 8:08, and maybe I'm the king of Spain. What's your point? Do blue collar workers have no right to express an opinion here? Do white collar professionals have no right to talk tough to bullies? What's your point?

Like I said, all the B.S. that Rep. Nass and his anti-intellectual right-wing cronies have dyumped on the UW profs is going to come back and bite them in the a$$ when the profs unionize and stick it to them. You reap what you sow in this life.

Anonymous said...

So Flash,
What's your opinion on the auto bailout? Do you support using taxpayer dollars to bail out the auto industry even with the current UAW contract intact?

flash foster said...

Well, thank you for asking. I'm a big fan of the idea that actions have consequences. The oft-stated idea that, "The auto company executives got themselves into this mess, let them suffer the consequences of their greed and foolishness" does appeal to me.

On the other hand, I also understand the domino effect, that if three huge corporations like that fail, it can impact a LOT of "innocent bystanders" in this country, people who weren't directly involved in any of it. I can see where using taxpayer dollars to prop them up *could* be in the taxpayers' best interest. So it's a tough call. (That's why I don't run for public office; I know I'm not smart enough to figure out stuff like that.)

I do not think, when giving ANYONE a "gift" like this, that it is inappropriate to seek concessions. If indeed this is a situation where everyone (stockholders, management, labor, the public) stands to lose if the companies fail, then everyone ought to have to "chip in". If the taxpayers are helping the company recuperate, then stockholders, management, and labor can all make some concessions. No one in life likes to take a step backwards, but it sure beats falling off a cliff.

The point germane here is that the auto workers have a union to negotiate this for them, to collectively bargain concessions as well as benefits, to work out a deal. University profs are denied that basic human right and are prisoners of whatever the "bosses" deign to give them. When the "bosses" at least acted like they appreciated what the profs did, it wasn't so bad not having a voice. But when forces in Madison strive to paint them as crooks and degenerates, treat them like dirt, you can only take that so long.

I predict UW faculties will unionize, and everyone in the legislature will regret the disrespect and discourtesy they heaped on UW System, as they contend with yet another powerful punlic sector union. Like I said, Actions have consequences!

Anonymous said...

"The point germane here is that the auto workers have a union to negotiate this for them, to collectively bargain concessions as well as benefits, to work out a deal."

Part of how the auto industry ended up in the trouble they find themselves in.

Here's some interesting insight...
(pay special attention to the "Job Bank" theory)


Unions Killing Detroit
November 17, 2008

Dan Ikenson of the CATO Institute has another great posting on the “cancer” that is unions in the U.S. auto making industry.

A Cancer on the Big Three
If you’ve followed developments in the auto industry at any time during the past couple decades, you’ve probably heard of GM’s “Jobs Bank.” This nausea-inducing scam was the concoction of the UAW in the 1980s. Rather than allow GM to layoff workers when conditions warranted, the UAW had GM assign workers to the Jobs Bank, where they were paid almost full wages and benefits NOT to work. The Jobs Bank was pitched nominally as a retraining program, where workers would acquire the skills and train themselves in the technologies and techniques of the future, or where “workers” could perform community services.

Alas, the Jobs Bank became little more than a casino and lounge, where workers would report for a full day of leisure, reading newspapers, playing cards, and generally not adding value to GM’s vehicles. (Sounds a bit like my job description, actually.) Now you know why a handle falls off or you hear a tinny sound when you slam your Chevy’s door.

Understandably, GM and the UAW generally don’t like to talk about the jobs bank. It sort of undermines the credibility of the argument that a bailout would save hard working Americans’ jobs. But it still exists and estimates are that thousands of workers report there for duty every day.

Mark Perry over at Carpe Diem is an economics professor at the University of Michigan, Flint. Among other issues, he covers the auto industry with a rightful dose of skepticism.

Although he has lots of good data and links, this chart explains it all. Why is GM (and Ford and Chrysler) seeking taxpayer subsidies when Toyota, Honda, Nissan, Kia, BMW, Daimler, Hyundai and other foreign nameplate producers, who are facing the same contracting demand and credit crunch quietly weathering the storm, are not? Because the latter have costs structures that haven’t been made obsolete and uneconomic by ludicrous union demands. And, of course, they make cars that Americans want to buy

Flash Foster said...

Yeah, well, I'm going to let them worry about that. If we want to stipulate "UAW = Bad" I shan't argue. You beat that drum. I'm going to beat the one that says UW faculties are going to unionize and get revenge for years of legislative disrespect.

Anonymous said...

UAW Killing the “American” Auto Industry

When you take a look at the “American” Auto Industry most people focus on GM, Chrysler, and Ford. What seems to be overlooked are the thousands of non-union autoworkers in this country turning out cars for companies like Honda and Toyota.

This isn’t about Union bashing. Unions serve an important roll in this country but in this case they have gotten out of control.

Total compensation averages around $73/hour at the Big Three. At Toyota here in the US is works out to about $48/hour. That is a difference of $25/hour that the Big Three need to make up somewhere.

So where do they try to come up with that kind of money? Well they reduce spending on research & development for starters. This is why we saw the Japanese out perform their American counterparts in terms of fuel economy during the past two decades or so.

Where else can you cut costs? You cut quality. You use materials that are cheaper. Over time your cars develop a reputation for having an inferior quality.

The Big Three couldn’t stop competing based on price. There they had to be competitive or people wouldn’t buy their cars. In the mean time the other half of the “American” Auto Industry, the non-union automakers (Mostly Foreign) began investing their savings in improving production techniques & processes, modernizing equipment, and expanding their market share.

A bailout of the Big Three is a slap in the face to those hard working Americans who work for Toyota, Honda and others. Why are we supporting the UAW half of the industry and not the other?
This is yet another reason why any talk of the bailout should be nixed.

Allow the Big Three to go into bankruptcy and then reorganize themselves. Allow them to opt out of their union contracts which have been dragging them down over the years. That is the only way they are going to be competitive again.

Next group that is hurting average Americans….Public Sector Unions.

Flash Foster said...

>>Next group that is hurting average Americans….Public Sector Unions.<<

Stipulated. And the Wisconsin Legislature of the past decade could have prevented the appearance of another one on the scene by treating UW System professors with respect and dignity, instead of calling them cheats, and crooks, and scam artists.

This new Democratically contolled legislature will pass a bill giving UW System faculties to organize if they wish to. Twenty years ago, no faculty would have gone for collective bargaining.

But because of the pandering to the anti-intellectual crowd by Rep. Nass et cie., UW System faculties WILL vote to unionize, to force the legislature to give them the respect and courtesy they deserve.

So congratulations. Anti-intellectualism, classism, bigotry, and stupidity will reap a whirlwind. You will have just what you DON'T want: another big strong public sector union to contend with. It would have been SO easy to avoid, but a bunch of two-bit right-wing demagogues just couldn't resist sucking up to the rubes and dropouts by "sticking it to" those liberal egg-head college profs. You've made your bed, and now you're gonna sleep in it!!

Anonymous said...

don't forget "Snarlin' Marlin," he's an even bigger enemy of UW System than Nass.

Anonymous said...

it's like bill gates always said, "be nice to the nerds, you'll end up working for one some day!!!"

Anonymous said...

Good thing Bill didn't work for New Page or he'd have lost his Union job.
Run it or sell it.

Anonymous said...

“If Americans like what the unions did to Detroit’s economy, they’ll love what the unions will do to the country,” said Richard Berman, executive director of the Employee Freedom Action Committee. “The unions have played a significant role in nearly bankrupting the Big Three automakers with untenable inefficiencies which have put tens of thousands out of work. With the Employee ‘Forced’ Choice Act, unions are poised to do the same to millions of jobs across the country.”

Lake Winneblogo said...

Unfortunately, the anti-union trolls are hard at work.

I can't wait to see how nasty they get if the legislature actually gives us the rights that others already have.

Anonymous said...

As your one poster says, the state is going to reap what it's sown. Ten years ago, I NEVER would have voted for a faculty union. After a decade of abuse, I cannot wait to get one to protect us.

Anonymous said...

So the University of Wisconsin system claims it is hurting! With a projected state budget deficit of $5.4 billion, the president is now calling for cuts. That makes sense, but not just because of the tough economy. Reilly wants to cut travel expenses and a review of some unpopular majors. His perspective is the problem.

The system didn't act until it had to. Only now are campuses being asked to review programs that have low enrollments and to eliminate or consolidate some of them. Why does it take a recession to figure this out? Shouldn't seeking efficiencies be a standard business practice, regardless of the economic climate?

Chancellors are also being told to fill only those positions that are essential to the campus mission. Shouldn't that be done on a regular basis? If they aren't essential, then why have we been filling these jobs all these years?

A way to save some serious money would be to consolidate the entire system, not just the unpopular programs. Can Wisconsin really afford to operate all 26 campuses? If the UW is really committed to saving taxpayer dollars, everything should be on the table.

Anonymous said...

"They can't get into any of the courses they need to complete their degree! Sections are closed, for lack of money to pay instructors."

That is where excellent management and administration is required. A strategic view must be taken of all areas to insure positions are eliminated in areas where they are in excess. Again, this is what is done in industry. Whole manufacturing departments are rarely closed. Select labor in select areas is reduced to insure product keeps flowing. Apply the same rules to education in the UW system. You as an employee certainly are not comfortable hearing this, but you need to so you are prepared for the prospect of a labor reduction reengineering of the system."

Well, the University of Phoenix and other for profit universities seem to have figured out a way to do it. Maybe some benchmarking is in order.