Welcome friends to another edition of “Economic
Update,” a weekly program devoted to the economic dimensions of our lives, our jobs, wages,
salaries, incomes, debts, those of our children, and those coming down the road to confront
us in the future. I’m your host, Richard Wolff. I’ve been a professor of Economics all my
adult life, and currently I teach at the New School University in New York City. Before jumping into today’s updates and a
very interesting interview, I wanted to mention that someone that you hear on this program
from time to time, Dr. Harriet Fraad, talking with me about the psychological dimensions
of what’s going on in the economy, and that many of you comment on in the emails that
come to us afterwards, Dr. Fraad and I will be speaking in the Bay Area of California
in early October. And I wanted to alert you all we will both
be speaking in Oakland, California during the day on Sunday, October 2nd and we will
be speaking in San Francisco, at the Episcopal Church of St. John the Evangelist, on the
evening of Wednesday, October 5th. If you are interested in visiting with us
and seeing these events, please check our website, democracyatwork.info, look under
the “Events” page there – you’ll find it easily – and it will give you all the specifics about
those appearances of Dr. Fraad and myself, October 2nd in Oakland and October 5th in
San Francisco. Well, we have many things to talk about today. More than enough to fill the hour and, indeed
as usual, not enough time. Most spectacular, this week, was the decision
by Janet Yellen and the Federal Reserve not to raise interest rates. The simple and most important part of the
explanation is the fact that they are afraid to do that. Because if you raise the interest rates, you
make all kinds of borrowing that much more expensive. That will reduce the amount of borrowing businesses
and individuals undertake. That, in turn, will reduce the spending they
can afford to do and that will lessen the jobs and incomes of people. Since the so-called economic recovery hasn’t
happened for the majority of people, raising interest rates – whatever the logic – is too
dangerous, and the Federal Reserve figured it out. And that’s why the rates weren’t increased. We now wait until the November and December
meetings, but it is a long-shot whether the interest rates will be raised even in December. Well, the theme for today might be – at least
for the first half of the program – how and why large capitalist enterprises and the government
are two sides of the same coin. I know there are many people who like to imagine
to themselves that these two partners are really very distinct and different from one
another, but it’s been rarely less true than it is today. As if to drive the point home, let me tell
you about former Speaker of the United States House of Representatives, John Boehner. He doesn’t spell it that way, but he wants
it pronounced that way, because if you didn’t it would be embarrassing. Well, he’s out of the House of Representatives,
but this week he took a job with a law firm in Washington, D.C. named Squire Patton Boggs. It’s a Washington-based law firm long known
for its lobbying. Well, turns out Mr. Boehner’s not a lawyer,
so they probably don’t want him for that. And that leaves lobbying. Pressing the government to do what he was
pressed to do when he was the government. The musical chairs between government and
big business keeps on spinning. In case you didn’t know, two other leading
congresspersons already are doing that for the law firm of Squire Patton Boggs. One of them is former Senator John Breaux
and the other one is former Senator Trent Lott. So Mr. Boehner will be part of the elite corporate
and government that tells us all what to do. Well, here is another example of musical chairs
between top government and top corporate officials. It turns out this last week that almost-Vice
President Sarah Palin sold her mansion in Scottsdale, Arizona. She sold it – and I want to stress this, because
it’s a good lesson in how to make money being in politics – she sold her mansion in Scottsdale
for $2.275 million. And I want to tell you about the house she
sold. It has six bedrooms. It has 6 1/2 bathrooms. It has a square footage 7,971 square feet. Wow! It has fireplaces, both inside and out. Large kitchen, granite countertops, a walk-in
pantry, a home theater, a billiard room, wine cellar and not one, but two spacious master
suites. Outside, there’s a 4.4 acre lot that has its
own basketball and volleyball court, putting greens, bocce ball area and a pool with a
spa. There’s a six-car garage, with a – I’ll stop
here. I have no further comment on that. My next item is a response to a question. And the question was: can I explain why the
British people voted for Brexit? That is, to leave the European Union. And I’ve talked about this on the program
before and I don’t want to go over it again, but in response to one person’s question,
I did look up what had happened to real wages of working people – average real wages. And by that, again, I mean how much you’re
paid, adjusted for the prices you have to pay with the wages that you earn. This is called “real average wages”. And the time that we’re measuring is the last
quarter before the crisis hit, so it’s before the quarter of 2007 all the way up to the
last quarter of 2015. So, basically, what happened to wages in Europe
across the period of the economic crash that happened in 2008. And that is, especially in Europe, very much
still with us. Well, the story is horrific. If you didn’t know it already, the average
increase in real wages over the nearly ten-year period is in the neighborhood of 4-5% over
a ten-year period. That’s a very, very slow increase, given the
problems with how these numbers are accounted for, and given the decline in government services
over that time, you can see that the average has been very grim for the European working
class. But two countries stand out. Because not only was it grim there, but they
didn’t have any wage increase. Well, it’s even worse: they had a wage decrease
over that period – these eight-plus years. The two countries with the worst record: Greece
– well, that you know from everything we’ve talked about on this program for years now. But the country you might not have known,
that has as bad a history of wages as Greece did, was Great Britain. That’s right. The real wages of the British working class
on average dropped 10% over the last eight years. You wonder why the British working class was
angry at the leadership of their country? The big corporate leaders and government leaders
who confidently predicted that the British people would vote to stay in the European
Union, because they were making money – excuse me – were supportive of that staying. The very fact those leaders were for it was
half the reason why the British working class needed to say something about the drop of
10% in real wages over an eight- to nine-year period. It’s stunning; and the only thing more stunning
than such a history is how few people talked about it. My next update – it’s a small one, but it
tells you a story. Goldman Sachs is a bank. You’ve all heard of it. It’s been in the news. Most of you probably believe it’s a bank based
and located in New York City, which is true, but less so than ever before. We looked into it, and we just discovered
that the second largest office in the whole Western hemisphere for Goldman Sachs is in
a place you might not have guessed: Salt Lake City, Utah. And Goldman announced that it expects to experience
“significant growth” over the next few years. It’s looking for people it can hire. It doesn’t feel safe in New York City, might
be the reason, and thinks it’s less likely to be problematically confronted if it moves
to Salt Lake City, Utah. Something to think about when you wonder about
where things are going and are trying to explain what’s happening to the decision-makers in
our country. Well, going behind the news yet again, we
are all confronted with extraordinary police actions against African American citizens
that doesn’t seem to stop. We’re confronted with the Black Lives Matter
movement as one of the efforts to try to confront and deal with this situation. Is there some economics behind all this that
might be interesting? Well, an answer is forthcoming in a September
20th study by the Economic Policy Institute in Washington, D.C. Black-white wage gaps is what the article
is about, written by Valerie Wilson and William Rodgers III. Here’s the basic take-away from this report:
as of 2015, relative to the average hourly wages of white men with the same education,
same experience, same metropolitan location and the same area of residence, black men
make 22% less and black women make 34.2% less than white people. And, in order for you to understand how that
might be bothering folks, that is a larger gap than those gaps were in 1979. So when people tell you – as they like to
do – how much enormous progress has been made in the racial differences economically, in
the United States, at the very least you should raise your eyebrows. And if you want to know more about it, go
to epi.org, read the report and try to connect in your minds, as I am doing in mine, the
deterioration of African American jobs and wages, relative to white people across the
last 25 or 30 years when we were told about progress, and see whether it might have something
to do with the issues that are in the news every day, it seems. Now. Next update. And we’re cooking right along. Over the last 10 days, you might not have
heard about it, but we are experiencing, here in the United States, the greatest strike
of inmates of U.S. prisons in the history of the United States. It ought to be on the front page and – let
me give credit where it’s due – on the 14th of September, not very long ago, the Wall
Street Journal actually gave a story to it. It told its readers – as well it should – that
these protests were timed to happen in a number of prisons, particularly in the states of
Alabama, Florida and Michigan to coincide with the 45th anniversary of the uprising
in the Attica prison in New York State. The prisoners know their history. And while they were objecting to many things
as the reason for their strike, one was dominant: that they get treated like slaves. They are forced to work, and they are forced
to work at pay levels that range from 74¢ per day to $3.34 per day. Truly slave wages. And they’re angry and upset about it. Well, I am, too. But my job is to give you some of the background
and the analysis that goes with it. For those who do not know, the Thirteenth
Amendment of the United States Constitution outlaws slavery. It’s an amendment that came right out of the
Civil War here in the United States. But that amendment, very short, has an exception. It outlaws slavery everywhere in the United
States, except as punishment for crimes in prisons. Here, let me do that again. We didn’t abolish slavery in the United States,
because we specifically allowed it as a punishment for a crime. Think about that for a moment with me, won’t
you? A person commits a crime. A person is convicted. The person maybe didn’t do the crime – we’ll
never know, -but he or she is convicted. And they go to prison. Now we hope that, in prison, something will
happen to that person so they don’t commit a crime when they come out. Treating them like slaves probably doesn’t
help a whole lot. It rarely did historically, and why would
we do that now? And why would we be surprised if people who
are told that Liberty and Freedom are the core values of a human life decide to strike
even in the terrible conditions of prison against being treated like slaves when, indeed,
they are? Continuing. Here’s one that takes the story of how the
government and big business are two sides of the same coin another step further. Many of you have noticed, because it’s been
in the news, that they Mylan Pharmaceutical Company got itself into terrible trouble when
it raise the price of its EpiPen – an anti-allergy device – by a factor of five or more over
a short period of time making a fortune for the company and for its CEO Heather Bresch. But over the last couple of weeks – as Ms.
Bresch was forced to testify in front of the Congress – more people began looking into
the story and it gets – what shall I say? – sleazier by the day. Turns out Ms. Bresch, the CEO of Mylan, taking
home a salary of 18 million bucks from this company that has jacked up the price of these
anti-allergy devices that are widely used in American schools, turns out she’s the daughter
of Joe Manchin. Who’s that? He’s the Senator from West Virginia. Oh, goodness! The father’s a Senator; the daughter is the
head of a big company doing things that are – at the very least – ethically challenged. But then it got better. Ms. Bresch’s mother, the wife of Senator Manchin,
is Gayle Manchin and she was president, recently, of the National Association of State Boards
of Education and, apparently, was in that position, during the time, if the reports
are to be believed, that schools around the country decided to make use of the EpiPen,
produced by Mylan Pharmaceuticals. Does this smell? Yeah. Doesn’t it, though? Yet another story on the same theme of government
and corporate going hand-in-hand. This one concerns a billionaire – yes, another
one – this one by the name Joel Ricketts. He was the founder – is the founder of TD
AmeriTrade. And he owns the baseball team, the Chicago
Cubs. Ricketts, along with his wife Marlene, were
supporters of anybody but Mr. Drumpf. I believe they particularly supported a leading,
brilliant leader here in the United States, Wisconsin Governor Scott Walker. They supported him. He flamed out kind of early. And I guess they’ve been wondering who to
put their money to. Well, they may have supported someone against
Drumpf at the beginning, but they’ve changed their mind. As of last week, according to Business Insider
reporter Jeremy Berke, Ricketts, along with his wife, is planning on spending $1 million
in an effort to help Donald Drumpf win in November. The Wall Street Journal reported that and
also reported that Sheldon Adelson, the billionaire casino magnate, is planning to spend $5 million
to support Drumpf for president. Wow. This is sort of interesting. But, here again, family politics and business
all combine. When I looked into Mr. Ricketts, the billionaire,
I found out that his son, Pete, is the Republican governor of Nebraska, who endorsed Drumpf
back in May. Oh, goodness. Does this smell? Oh, I don’t know. Maybe it’s just coincidence that all these
people in the government and all these people who are billionaires seem to overlap more
and more as America goes along. My last update for today. Well, before I do that, let me drive home
what the earlier updates talked about: government… big business… billionaires… candidates….
politicians… executives… Millions of dollars made, questionable use
of public office, you get the picture. I stress that for a reason. There are efforts made to kind of pick apart
this close partnership that governs the United States and has for a long time. To pretend, in my view, that there really
is a big difference between corporate leaders of big business on the one side and top politicians
on the other. There are even people who want us to believe
the source of our problem isn’t capitalism, big business and the power that big business
has in a capitalist system, they want to believe that’s not a problem. It’s the government that’s the problem! Libertarians of all stripes. Anarchists of certain stripes. And people who simply need to have the government
to blame, because they either don’t understand or are afraid to look at the business side
of that coin. And, likewise, there are others who want us
to believe that big business is the problem, but the government is innocent. The government is good. And, if we only get the government to do more
things – liberal-ly things – well, then, we’ll have a good society. And it’s just good to get the government back
in to playing a useful role. These two positions – apparently opposed – aren’t,
in fact, very opposed. They share an unwillingness to see the tight,
coordinated, cooperative relationship between the top levels of capitalist business and
the top levels of government. Does that mean nothing can ever happen to
separate them? Of course not. There are moments in history when they have
a clash and those are important. But, most of the time, and surely today, when
the major candidates for president are a billionaire on one side and a multi-millionaire on the
other. We should stop with these fantasies that one
side of this partnership is vanilla and the other side is bad. No matter which way you play that, it makes
the mistake of not seeing the solidarity, the shared interests and the coalition that
they present to the rest of us. Last item for today. This one is in the nature of better news. At least for some of us, who watch these things. Since last we talked, there’s been an election
in the City of Berlin, in Germany. And what an election it was. The question will be, who governs that city? It used to be that the Prime Minister – the
Chancellor there, Angela Merkel – had a lot to say about that through her political party. And when she didn’t have a lot to say on her
own, she did it in coalition with a slightly-to-the-left Social Democratic Party, with which she has
been making coalitions over the national and regional levels. But in the election this last week, the people
of Berlin strongly rejected both the Social Democratic Party – which did come in first,
still, but a much reduced vote – and they really gave a beating to Mrs. Merkel. They’re not happy with her at all. So the two major parties suffered a stunning
rejection by a whole new class of voters in the City of Berlin. Just as important, was the name of the party
that came in third – just a couple of percentage points less than Mrs. Merkel’s party. That party is called the Die Linke Partei. That’s German for “The Left Party”. This is a party widely perceived in Germany
to be anti-capitalist. That is, one of the defining slogans of the
party runs like this: Germany can do better than capitalism. Oh, goodness. Third party in Berlin, couple of percentage
points less than Merkel and gaining fast. Politics is shaking in a Europe beset by the
crisis of 2008, from which it can not escape. Nor is such an escape anywhere on its horizon. Capitalism is a system that thrives on people
not understanding or paying attention to what’s actually happening, which is one of the things
this program tries very hard to overcome. We’ve come to the end of the first half of
this program. Please stay with us across a very short break, and come back and we’re going to have a very important conversation about the state of higher education, the struggle
between universities and the people who teach what folks go to universities to learn, and
what the class struggle in the university has to teach us about the United States – and
perhaps beyond that – in this day and age. Stay with us. We’ll be right back. Welcome back, friends, to the second half
of “Economic Update” for this warm day in September. I want to begin by introducing a very good
friend of mine for years, that I’m happy to interview. His name is Professor Michael Pelias. So even before I describe who he is, welcome
Michael. [Pelias] Thank you, Rick. Glad to be here. [Wolff] Michael Pelias is a professor or Philosophy
at Long Island University, here in New York, its Brooklyn campus. He has been doing that kind of work, being
a teacher for over 25 years: social and political philosophy in courses as different as film
and philosophy, European philosophy since Hegel, philosophy of education, and indeed,
interestingly, courses on the black radical tradition and, of course, on post-Katrina
New Orleans in the light of disaster capitalism. He is, I believe, from New Orleans. [Pelias] Yes, I am. [Wolff] He’s also been and activist for 23
years as a member of the Executive Committee of the Long Island University Faculty Federation,
the union there, and he is a member of the current negotiating team. And he has participated in all of their struggles
that he’s going to tell us about since at least the early 1990s. So, Michael, welcome and let me begin by asking
you to summarize why I brought you here. In other words, there was a very important
labor struggle at Long Island University over the first couple of weeks of September. Tell us what it is and give us the context. [Pelias] Okay, I’ll back up and kind of provide
the context. We began our usual contract negotiations back
in late March, early April of 2016, and we were charged, as usual, to get a good contract. The previous contract, which was a five-year
contract, was a very minimal wage package of zero, one, one-and-a-half, two-two, so
we decided it’s time to, you know, step it up in terms of what you talked about earlier
on your show: the real wages, versus the nominal wages, and at least help people deal with
costs of living and, you know, take care of our new hires. We sat at the table for literally five months. We did not get anywhere. We put 25, 26 proposals on the table, all
which I consider extremely reasonable, and they actually approved one, which was the
duration of the non-tenure track appointments. And that was the extent of the flexibility
that management had during this contract negotiation. They came back to us with extremely low wage
package, despite the fact that the president had said the crisis at LIU was over, and they’ve
been showing up a rating of budget surpluses of nearly $20 million a year for the last
two years, at least $20 million a year. So we’re talking about a surplus that was
at least $40 million. Our entire package, really, to put it in a
different kind of context, was about $3.5 million over a three-year contract duration. So we were asking for, maybe, about 10% of
the actual surplus to go to the faculty. We didn’t get anywhere. They would not move. We sat there all summer in the kind of charade,
I call it, kind of an attempt, you know, to play the mask game – a kabuki dance with management
– so you don’t get charged with an unfair labor practice, which is a euphemism for “labor
is stuck by management’s proposals”. So anyway, we met on August 31st, because
the contract expired that day, trying to hammer out at least some kind of an agreement. We were informed that we were going to be
locked out – the first time this has happened in a university, in higher education in the
history of the United States. [Wolff] Really! [Pelias] To the best of my knowledge, yes. We’ve done a lot of research on this. There maybe was a little “thing” at Temple
University, but I don’t think they were locked out. [Wolff] And you were literally locked out. [Pelias] Literally locked out, effective September
the 3rd, which was the weekend before classes start, and the lock out lasted for eleven
– no, actually, twelve – days. A week ago Thursday, today, it was lifted. We went back to work. [Wolff] So, “lock out,” just so everybody
understands, lock out means you’re not allowed to go into the building where your office
is, or to go into the building where you teach in the classroom. You are literally excluded from your job. [Pelias] From the job, and we would be charged,
if we did go in, with criminal trespassing. We could go to jail in order to get books
out of our office, meet with students that we may have in classes.[Wolff] So let me quickly
ask you the question I’m sure people are asking: (1) I remember reading they also took away
your health insurance? [Pelias] During the time of the lock out,
yes. Health care was suspended. Of course, no wages were paid during this
period, yes. [Wolff] Okay. And what was done for the students who came
to class on the first day – for that day and the subsequent days that were their normal
semester time when the professors were all locked out – what happened? [Pelias] Well, the amazing thing – and to
back up a little more to provide a context – in July, early July, the University advertised
for jobs. Not saying that these were jobs because of
a lockout that may be coming, or a possible strike. They did not advertise these jobs as such. They were advertised there are positions available
at LIU. So they did try to create, you know, a group
of replacement workers, but this was very minimal, and at the same time, they threatened
administrators: you either go teach courses, or you would be fired. So many administrators, who were not qualified
to teach actual courses – so, for example, you have, the joke was, the Dean of the Conolly
College of Liberal Arts school – who was a biologist, a PhD in Biology, a biologist was
assigned to teach Ballet. The Vice President in charge of Operations,
who, you know, is a woman that has been there nearly 40 years and a very important player
in the history of LIU, was assigned to do Yoga. And then you had people teaching English classes
who had no background in English Literature, et cetera. So the students were faced, on the first day
of classes, which began September the 7th on the Wednesday following – well, Convocation
Day was the 6th – of Labor Day week. They were faced with replacement workers in
the classroom. And unqualified people. [Wolff] Okay. Now before we go into it, how has it been
“resolved”? Just so we know what happened. [Pelias] I don’t really consider it resolved. We are continuing to negotiate, but the terms
going after the lock out was lifted, whether we would work continuation of the old contract
for nine months, which would expire May 31st, 2016 [Wolff] 17 [Pelias] 17, excuse me, yes
– and we would work on that nine-month academic year, calendar year, and we would also be
restored the health care and any out-of-pocket costs. However, we still would be docked for the
days we did not work at school. So they actually paid the replacement workers. So we are being docked, at least up to right
now, this was part of the agreement. We’ve gone back to work effective September
the 15th – last Thursday – you know, one week into the semester. So one full week was lost. So these are the conditions we will continue
to negotiate and also we have been assigned a mediator to maybe, hopefully, kick-start the negotiation. I mean that’s like turning the ignition on
and you’re still in neutral, but you may know you’re going to take a right or left turn,
you know, at least. [Wolff] Let me be the economist for a minute… [Pelias] Sure. Of course. [Wolff] …because that’s what I do. If they’re taking a week’s pay – more or less
– from you, that’s 2% of your annual salary. [Pelias] That’s absolutely correct. [Wolff] Which means the whole of last year’s
gain in your contract from before has just been erased. [Pelias] Totally erased, right. And zero going forward, so most people are
working on a minus-two going forward into the extension, May of 2017. This is one very egregious moment, that has
not really been discussed yet by the faculty, but they’re going to be aware of it when they
get their first paycheck at the end of this month. [Wolff] All right, so now let’s analyze it. Tell me: what’s going on? Why is the University coming off a five-years
in which they gave the teachers raises less than what was necessary – just to keep the
same standard of living they had before – now wanting to stick it to the teachers even more? What’s going… why would a university jeopardize? This is a message to every professor: “go
get a job someplace else.” It’s a message to every professor: “maybe
look outside of academia – maybe you’re in the wrong place.” It’s a message of disrespect for what they
do. It’s a message of disrespect for what the
students should be getting. What’s going on? How do you…? Help us understand this. [Pelias] Well, I think at one level, the Board
of Trustees of LIU brought in someone who has no academic background. Has no relationship to academic value, and
especially no relationship to the humanities and liberal arts. You know, the cornerstone if you will in terms
of building citizenship and creative dissent, you know, forming young minds with the capacity
to make good judgments about the world they want to live in. So they have created, you know, what I would
consider an overall package of austerity by in which the professors are the chief enemy. But the other enemy to this – or its target
– the other target is really the students. The students, as you know, pay enormous amount
of tuition. LIU’s average tuition is about $30,000. It goes up to about $55,000 if you live on
campus. And further, some of the graduate programs
are $40-50,000. And most of our population at LIU/Brooklyn
comes from working class backgrounds. Average family median income is around $80,000,
you know, so they qualify for some aid, but very little. [Wolff] Many of them are likely borrowing
money? [Pelias] Absolutely. You know, I think the average debt they carry
when they graduate is between $35-40,000 for an undergraduate degree. We can talk later about the value of that. [Wolff] Right. [Pelias] But, so this is a war also on the
students. As I tell my students, you’ve been created
as a new class of indentured servants. You know, you are not here to think; you are
not here to learn. You are here to, you know, reproduce for the
system and pay back your debts. And, you know, I think they get it, but still,
what choice do they have? You know, given the conditions that, you know,
the economy dictates. And, you know, as our friend, Stanley Aronowitz,
framed it once: go to college or die, right, is the mantra. So this, to me, has become an experiment. LIU case is very important on the national
and even the international level as an experiment of how you, first of all, can disrespect and
have absolutely no feeling for your faculty, you know, as educators by locking them out,
taking hold of the university, thinking you can manage it on a make-shift shift of workers,
right? Basically, you know, all part-time laborers,
pay them piecemeal work. They got paid $500 for one class and, you
know, they get paid $3,000 for the entire semester, had we not gone back in. And so, this has become part of an attack
on the value of higher education, the value of professors, and is – in my opinion – a
neo-liberal framework to create a new model of the university that is built on only the
health, science professions, entrepreneurialship, business models and, at best, professional
schools, especially at LIU, which is oriented mostly towards pre-pharmacy, pre-nursing schooling,
you know, and they’re starting to create this kind of new model for these second- and third-tier
universities. And another thing to remember, in this case,
LIU is a tuition-driven: 91.5% of its revenue comes from tuition. And there are many schools like this, that
are not endowment-rich, even though LIU’s endowment has gone up about 30-40% over the last two
years, I mean, you know, basically reflecting stock market advances and portfolio advances. They still do not use any of those funds toward
scholarship or encouraging faculty development, etc. [Wolff] It does sound to me, and I’d
like your opinion on this, it sounds to me like we’re going back to the way higher education
was before World War II in that, if you come from the elite – from the wealthy – you will
go, likely, to a private college where your development, your over all development – humanities,
social sciences, natural sciences – is what the point of the education is. To make you able to analyze problems, understand
the world, have a critical perspective. But if you don’t come from those classes,
and if you can’t afford or can’t in to those universities, you’re going to a higher education
equivalent of what we used to call “vocational schools”. That the LIU is becoming an extension of the
vocational training system, where the presumption of the business types who lead it is that
all these people need to know is the technical details of whatever career they’re going into. But being trained to be adult, thinking citizens
– we don’t need them for that. That’s a job for the elite, and not for them. It undercuts the whole notion of a liberal
education as a human right. [Pelias] Absolutely. And just to make one, you know, connection
to today versus – you’re absolutely right. The pre-World War II model, in terms of the
vocational training, the difference is today, they are paying enormous amounts of money
and also to get this vocational and going into debt, which most of them are not going
to be able to pay back, if ever, you know, at the minimum 10-15 years out there if they
get a really good job. And probably the rest of their lives. I call it, you know, it’s the new educational
tax. [Wolff] Making the people getting it – it’s
undercutting public education, the whole idea. So tell me how are the professors – how are
they reacting? How are the teachers – how do they understand
this, and what reaction is building among them? [Pelias] I think that the best thing about
the lock out, is it did mobilize professors. You know, we voted almost unanimously – right? – not to ratify a very offensive and egregious
contract. It might not have been so close, had we gone
on strike, had we voted to go on strike. So this had a way of mobilizing the professors
and building a kind of militancy and solidarity that is not normally there. So this has been a good thing. The best part of the lock out, was the students. The students would gather together, built
a small movement internally, asking for their real professors. And then they started, every day of the lock
out at noon, they would chant “LIU professors locked out – students walk out.” And they would march out onto DeKalb and Flatbush
around all the buildings and chant “Shame, shame on you, LIU.” And, you know, this really created a really
very different feeling at LIU, where you have had, basically, apathy. You know, for so long of a period of time,
so this mixing of the students and the professors really came to be – in a very solid way the
last week – and I think it’s going to continue. There’s always a problem once people go back
to teaching, to their lives, that they no longer organize or get together in meetings. But I think because of this action, we will
see a different kind of militancy at LIU, particularly in the union. You know, the union has a history of going
on strikes. We are probably the most – more than any other
academic union – been on strike, you know, in the last, in it’s existence, in 40 years
we’ve been on strike eight times. [Wolff] In 40 years. [Pelias] In 40 years. So every five years, you can kind of expect
a strike from LIU. There was a strike over parity with C.W. Post,
which is one of the main issues going forward. There was a strike over tenure – they wanted
to get rid of tenure. There had been strikes, of course, over wages,
over the reduction of health care, so… [Wolff] Let me ask you a question again from
me, as an economist: in the economics profession, one of the things we take as axiomatic is
that the United States as an economy – if it has a future in the world economy – has
to compete, whether it’s with the Europeans or the Japanese and now the Chinese, and so
on. And that one of the key determinants of how
well the American economy will be in the years ahead is the quantity and the quality of people
emerging from higher education. The skilled, the trained, the sophisticated,
the creative… What in the world would possess a country,
knowing what I just said – because it says it over and over again – savaging its own colleges
and universities in this way? Disrespecting the teachers? Making it less and less attractive to be a
professor? Giving students shoddier and shoddier education
because of the pressures put on the teaching faculty and where money is spent? How do you…? Help us understand how a society shoots itself
in the foot in this way. [Pelias] Well, I mean, it’s beyond any kind
of rational imagination here, but on the other hand, you know, in the era of globalization,
you know, the United States is, I think, ranked 30th by the UN in terms of education. And if you’re a business person in the United
States and you need a mathematician, you’re not really going to go to the schools in the
United States to recruit. So you have much more of a market now that’s
going to go towards Singapore, or towards India for technology. So, besides the elite schools, I really don’t
think that the American system is really, you know, geared towards educating its populace. I think, you know, the philosophers – since,
you know I’ve read them for many years – Marcuse, Herbert Marcuse, once said the educational
system of the United States is they systematic moronization of its populace. And, you know, we’re really living through
that right now. It’s not the fault – you know, you can tell
your students “you come in smart and you leave dumb”. So this is a real problem as we go forward. And, no longer, is there a drive for knowledge;
it’s really the era of data. And as long as you can do data and as long
as they can still create minimum wage jobs around data mining and data interpretation, processing,
you know, this will go on as a consumerist economy. But forget it. I don’t think the United States is geared
towards, you know, as you pointed out earlier, the pre-World War II drive towards educating
its populace for the production, you know, or for, you know, the production that’s needed
to make this country at least functioning again. So we’re really dealing with a collaboration,
whether unconscious or not, I think it’s partially very conscious of the ruling class to, you
know, not educate people at a certain level. The elite schools remain sort of unscathed,
although I think the quality has gone down there, as well. But that’s another story about what technology
and its impact on education has happened. But they don’t really care about these second-
and third-tier schools, or about public education, or education fundamentally as a public good,
You know, it is not a public good. It is not an asset. And, as one friend of mine said, why are they
going after the assets of the university, i.e., the teachers? [Wolff] It’s very interesting, historically,
because after World War II, it was the demand of the returning soldiers who got the GI Bill,
got a chance to go to school – that whole generation wanted their kids to get proper
college educations, which that working class of America never had had before. They wanted it. They demanded it – that’s how public higher
education really got going after Word War II. Before, it was a private affair. Is there any chance that a groundswell of
students – like those chanting at LIU – is going to say “Wait! You can not devalue us and our prospects by
giving us a lousy education. We won’t tolerate it.” in the same way that, after World War II,
the working class of America said “We’re not going to tolerate only the elite going to
college. You’re going to create public higher education for
all of us.” And a major step in that direction was taken. [Pelias] I think there’s a major awakening
among students now. I think the debt situation has started this
in their minds. What are they paying for? Are they living in the age of diminishing
return on investment? You know, if you want to look at this as their
temporal and their psychic investment in education. And I think they’re beginning to see very
differently than just through the career as the model, or that you go to school just to
get a job, you know, because maybe the jobs won’t be there or the good jobs won’t be there. So, at least, questions have been raised. We hope that this develops into a movement. I think there’s leadership and, as we know,
the Occupy movement raised very good questions which we still are addressing. There’s certainly some, you know, effects
from that, the Black Lives Matter. Maybe we have some possibility of fusion of
these movements coming together along on the college campuses. That’s very, very important. But, there is, I mean again, I want to say
this administrative class, which is the bloat in the universities – where most of the pay
is going, you know – there are much higher salaries at the top. Those who administrate, who are not educators
have really, you know basically, destroyed, you know, any notion of what higher education
could be. And I’d also want to add that, you know, we
as professors especially at a place like LIU – whose mission is for first-generation college
students or second-generation… [Wolff] You mean the first-time… [Pelias] First time gone to college – first
generation students, which was founded in 1926 for, you know, Jewish people who could
not afford to go to school. This is how LIU/Brooklyn was formed – Mike
Gold’s novel “Jews Without Money,” basically. You know, that mission has been there, now
this is being completely attacked and assaulted by this administration. It’s a battle cry for all of us. So my hope is, you know, if I can add, my
hope is that this Executive Committee of the union – which has some very good people, I
must say, and people have really stepped up – if we can continue to put the pressure,
you know, we continue to have interviews and such as a media presence making people more
aware, we can go back to the table and, hopefully, negotiate a better contract and maybe see
this as a small victory for teachers in both a way of standing up and, you know, making
this into a transformative moment in higher education. That is the goal that we have at this point,
yeah. [Wolff] Just a final comment from me, if I
could. I’ve been a professor all my life, too, and
when we started, it was clear to us – in the universities where I taught – that the basic
decisions about what was done in that university were made by collectives of professors. The 27 in the Economics Department, we got
together. We discussed the curriculum. We discussed financially helping students. We were in charge. The administrators were under us in the sense their job was to do the administration subordinate to serving what the professors
did. This collective power by those qualified to
do it has been usurped. [Pelias] Totally. [Wolff] We have a university that copies the
model of corporate enterprise, with a Board of Directors at the top, typically having
little or nothing to do with what the company does, telling everybody else what to do, paying
themselves wild amounts of money, as if their control ought to be reimbursed, undermining
the very function of what the university was. It’s extraordinary. [Pelias] I’ll put it in another context, because
you’ll like things like this. The entire wage package for the faculty each
year is less than what the president of the university makes – one individual. The entire wage package. [Wolff] How many people involved in that? [Pelias] The entire wage package is close
to 600 people. [Wolff] Who make less than the president. [Pelias] Well, this is the raise package. It’s the equivalent, you know, the 2% raise
that is on the table, yes. [Wolff] Thank you very much, Michael, you’ve
been very helpful. [Pelias] Thank you, Rick. My pleasure. [Wolff] And to all of you, here’s another
corner of the American economy and the world economy changing in ways we need to monitor
and watch. I look forward to talking with you again next
week.

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20 thoughts on “Economic Update: Higher Ed Class Struggles (2016.09.22)”

  1. …in 1978-79, the OR St. Pen. paid $0.25 per shift to work in the kitchen and that was Never PAID IN $$$ but "was put on the books"(at cost). That's become even more, when slave-built-funitture/beds etc.(and slaves can't even get smokes with it any more).
    No one 'earns" millions/billions-they steal it by hook or crock.
    sperandum est pro libertate

  2. Just to add to the Berlin news: The leading social Party (SPD) won with 21.6% and with this is the weakest winning party in German history. As mentioned right after the main conservative Party (CDU) only 2 points behind comes the left Party (Die Linke)with 15.6%! But what I think is important to mention as well is the fourth party the green Party (Die Grünen), a party focused on environmental issues, with 15.2%!

    So not only do we have an exceptionally strong left party but also a very strong green party. I have been to the Parliament in Berlin and the left and green party work together very well on social issues. For Example the greens with the support of the left party and against the then governing CDU finally Divested Berlin from fossil fuels!

    At this moment it seems likely that Berlin will form a Government coalition with SPD, Die Linke and Die Grünen. Giving left and environment about 30.8% of the votes in this relationship!

    As you might be able to tell I'm very happy how the vote turned out even with the right wing populists reaching 14.2%…

  3. But I'm pro vocational education. I don't need to know Russian history or whatever to program a computer. It's ridiculous they put such stupid classes with degrees. I learn more about the world through the Internet than I ever learned in school. Especially college.

  4. united states is in the process of becoming a third world country-  just look around- student debt- no jobs- no intelligent life in politics

  5. A nation that turns the education of its children into a profit centre for corporations and Wall St bankers has lost its moral ground and is shooting itself in the foot.

  6. One of the consequences of globalisation is that the US elite are giving up on the US and its population. You are no longer the indispensable people. You are now the replaceable people. RIP the American Dream.

  7. As long as we are well-fed daily and entertained 24/7, most people won't care, will ignore facts or will find a way to justify the results.

  8. THE AMENDMENTS TO THE CONSTITUTION OF THE UNITED STATES –
    amendment VIII :"Excessive bail shall not be required, nor excessive fines
    imposed, nor cruel and unusual punishments inflicted". The treatment of inmates as slaves is should be illigal as the amendment XIII section 1 "Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction" is clearly contraddicting in my humble opinion amendment VIII and violate the basic human right as internationally recognised, I wonder if this should be looked up by the supreme court.

  9. This is how empires die, from the inside. But there is some hope. As the system degrades we can build something new little by little alongside the rotten system but it can only flurish if it is properly dismantle while the new system is creared. But that will only happen if we will it.

  10. how are lockouts legally possible?!! how can employers get away with that(no pay, take insurance etc) its something out of the 1800s the industrial period!!

    please someone explain this is not a rant i really want know.
    thx u

  11. Great interview with Prof. Michael Pelias! This really shines the light on the scam that has become higher education, in particular, how college curriculums are tending more and more towards vocational training and how even the elite ivy league colleges have diminished under the neoliberal, privatized, monetized agenda. Tragic!

  12. I've been binge watching all of Prof's Wolff's videos for 3 days straight. A part of me remains hopeful but I'm nervous as hell for my future (thank god I don't have any children). It's depressing but the information is too good to remain amongst the willing ignorants of this country.

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