Press statement: October 8, 2020
Arbitration to Begin over Salary Freeze, Violation of Union Contracts
NEW BRUNSWICK, NJ—Arbitration hearings will begin Friday, October 9, as unions at Rutgers University challenge the administration’s declaration last June of a “fiscal emergency” to justify breaking labor contracts and canceling or freezing raises due July 1, 2020.
The university is obligated under those contracts to document why it declared a fiscal emergency and negotiate over its actions. Management has not responded to a union proposal to accept deferral (not cancelation) of the raises for a year in return for a commitment to end all layoffs, provide health coverage for already laid-off workers, and extend funding for Teaching Assistants (TAs) and Graduate Assistants (GAs) for one year. If the administration fails to answer the proposal, union leaders say they will take the case to an arbitrator to determine if there really is a “fiscal emergency.”
“There are many emergencies in the world today, but Rutgers’ finances is not one of them,” said Todd Wolfson, president of Rutgers AAUP-AFT, the union that represents 5,000 full-time faculty and graduate workers. “There’s simply no justification for the layoffs and pay freezes that are hurting the people who make this university work.”
Since the pandemic and accompanying economic crisis began in the spring, more than 1,000 Rutgers union members—over 5 percent of total union membership—have been laid off, said Christine O’Connell, president of the Union of Rutgers Administrators (URA)-AFT, which represents some 2,500 administrative staff.
“President Holloway, in a speech to the University Senate two weeks ago, referred to the ‘beloved community’ that we’re all part of at Rutgers,” O’Connell said. “But the staff who were laid off don’t feel very ‘beloved’ right now, and neither do the rest of us who fear what management will do next. This isn’t what Rutgers should be: a public university that hurts those who are most vulnerable, those who do the work that President Holloway acknowledges is often overlooked and undervalued.”
Meanwhile, the university’s financial situation is far stronger than its managers’ dire predictions last spring, said Andrew Goldstone, chair of the Rutgers AAUP-AFT University Budget and Priorities Committee.
For example, when it declared the fiscal emergency in June, the administration assumed a roughly $90 million cut in state funding as part of its projection of a $204.5 million change in fund balance for the coming school year. But, says Goldstone, the recently passed state budget restores Rutgers’ funding to pre-pandemic levels, largely thanks to lobbying by Rutgers unions. The Rutgers Board of Governors recently passed a revised budget with a projected change in fund balance of $97.1 million—less than half of the June estimate.
“The projected ‘emergency’ has already shrunk by more than half,” Goldstone said. “On top of that, pessimism about a drop in enrollment has proven unfounded, and the university’s unrestricted financial reserves—a rainy-day fund built up from budget surpluses in past years—actually grew during the pandemic.”
According to financial information released under orders from the arbitrator, this unrestricted reserves fund stood at $765.6 million as of September, up from $583.1 million at the end of last year, Goldstone said. Some $124 million of that is apparently the proceeds from borrowing for new construction that the university has not started. “But even setting that aside,” Goldstone said, “the university’s rainy-day fund increased by at least $58 million over the past year.”
“What we’re saying,” Wolfson added, “is that it’s raining very, very hard. If they would spend the money they built up over years of tuition increases and austerity for faculty and staff, there would be no deficit at all, no fiscal emergency, and no justification for layoffs and hiring freezes, canceled raises, and destructive cuts to academic programs.”
Goldstone said the arbitration case—which will begin with a first hearing on Friday morning before Arbitrator Bonnie Weinstock—is limited to disputing whether a “fiscal emergency” exists to justify canceling raises negotiated in union contracts, which Rutgers estimates to cost $26.4 million. “At the end of the day, what’s the arithmetic here?” he said. “They made so much money last year that, despite COVID, their bank account of financial reserves went up by more than enough to cover the cost of paying the raises and then some.”
“Those raises have outsized importance for lower-paid staff,” Goldstone continued. “The administration’s decision to freeze pay for TAs and GAs at 2019 levels would save at most $1.5 million, which isn’t even pocket change for an institution with a $4.5 billion budget. But for a graduate student making less than $29,000 a year, a lost raise of $850 hits hard.” Even with the raise, Goldstone said, most TAs would still be earning less than a living wage, currently pegged at $31,000 in Middlesex County and $34,000 in the New York-Newark metropolitan area.
Wolfson says that the Coalition of Rutgers Unions—an alliance of 19 unions with a total membership of 20,000—has concentrated since the start of the pandemic on presenting an alternative that “cuts from the top, protects the vulnerable at the bottom, and looks out for the community surrounding Rutgers that is disproportionately Black and Brown.”
Coalition unions worked together in April to present a “work-sharing” proposal that would have saved the university well over $100 million from furloughs, said Wolfson. Employees’ income would have been fully protected under the proposal, through a combination of state unemployment benefits and the federal unemployment supplement enacted in the CARES Act.
“They knew the clock was ticking until the CARES Act expired at the end of July,” said Wolfson, “but they sat across the table from us and did nothing, rejecting more than $100 million in savings.”
With arbitration approaching, Wolfson said, Coalition unions again came together to make an offer to defer the raises, in return for management’s commitment to stop all layoffs retroactive to July 1, health coverage for those already laid off, and a badly needed extension of funding for TAs and GAs.
“We don’t accept that there’s a ‘fiscal emergency’ that justifies canceling the raises,” Wolfson said. “But we’re also mindful of the damage being done to staff, students, and faculty who are the most vulnerable. We wanted to use our collective strength to look out for everyone.”
“The arbitrator had to use a crowbar to get any financial information from the administration,” Wolfson continued, “but even the little we’ve seen proves what we’ve said all along: there is no financial justification for the kind of pain they’re inflicting—on Rutgers staff through layoffs, on students who face inflated class sizes, on everyone left who has to do more for less.
“There is an emergency at Rutgers, but it isn’t financial. The emergency is management’s unaccountable actions, needless austerity, and upside-down priorities. The fight for us—all of our unions together, along with students and the whole community—is to turn Rutgers away from that path and toward a different future.”
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