THE SMITH CENTER

for Private Enterprise Studies

The CFA Contract

Stephen Shmanske
Department of Economics and Director of the Smith Center
California State University, East Bay

The California Faculty Association (CFA) recently reached a tentative agreement with the California State University after months of negotiations. Since July 1, 2001, the faculty has been working under the terms of the previous contract, while the union leaders and the administration argued over the terms of a new contract. As the CFA puts it in the CFA UPdate of March 2002, "After months of bargaining, teach-ins, demos...CFA/CSU FACULTY WIN TENTATIVE AGREEMENT." Although "winning" brings in an unnecessary adversarial tone, as I see it, winning or losing depends on one's perspective, and many faculty are big time losers in at least three ways.

The California state legislature had provided funding for a 2% salary increase that would have started on July 1, 2001, and Chancellor Reed in the university's proposal had offered to make the increase retroactive to that date. Under the tentative agreement, in a cruel coincidence with April Fools Day, the 2% general salary increase does not start until April 1, 2002. For someone earning $6,000 per month, the cost is $120 per month for nine months, for a total of $1080 even before compound interest. This significant dollar cost is the first way that faculty loses. Not surprisingly, in what must be called Orwellian unspeak, the union has not tallied this cost in any of their flyers or announcements about the tentative agreement.

To be fair, faculty are also promised another 2% cost of living increase effective July 1, 2002. If the state's budget situation worsens between now and July, this lock-in of a 2% raise might be a good deal. If fiscal improvement is in store now that the recession looks like it is over (and in an election year!), then the second 2% raise is probably on the low side. To put it in some perspective, the CPI for western urban residents increased by 3.88% from July 2000 to July 2001 alone. That is, it would have taken a 3.88% raise on July 1, 2001 to keep us even vis a vis the current salary discussion, with a further increase to cover the mild inflation since then.

The second way in which faculty lose is in the mandatory payment of agency fees to the union, whether or not one joins, and whether or not one agrees with the priorities of the union leadership. As the union puts it, non-dues-paying faculty are "free-riders" on the bargaining efforts of the union, and therefore are forced to pay a share of the bargaining costs. Currently, this payment amounts to over $40 per month for me, and over $500 per year. So I am paying over $500 to the union for the privilege of losing over $1080 by having my 2% raise delayed by nine months. It is axiomatic, of course, that coercion to solve the free rider problem necessarily and simultaneously creates the "forced-rider" problem of making people pay for representation that actually harms them. It is hard to imagine how union members and union supporters can be so callous to this fact. It is hard to see union members and supporters as benevolent when they run roughshod over the rights of individual faculty members and treat them with such disrespect by costing them so dearly.

Union apologists, of course, take credit for back-to-back 2% cost of living raises. But union supporters should not be blinded by glowing rhetoric. Cost of living raises are a fact of life in an economy with inflation. Faculty have often received such raises, before and after the arrival of the CFA, and before and after the implementation of the mandatory payment of agency fees. In this case, the union got us the 2% raise that we would have received anyway, but delayed it for nine months.

The third way in which faculty lose is more personal, and says more about the direction of the university itself. The tentative agreement takes away my right to try to work harder in order to receive a merit raise. The merit pay program was one of the big sticking points in the negotiations. Chancellor Reed believes that merit pay has a place, and I agree, but the union is dead set against it. People can disagree about the extent to which faculty should be able to compete with each other for raises. However, as long as some faculty members are stimulated and motivated by the chance of a merit raise, they will work harder as a result, and the quality level of the faculty will improve. By divorcing pay from performance and making all raises essentially automatic (including yearly 2.65% raises that amount to nothing more than raises for seniority), individual faculty members will have the luxury of going into "cruise-control." Some will indulge in this luxury and the overall quality of the university will suffer. Let me state this more forcefully. If even one member of the faculty was motivated to work harder by merit pay, the quality of the faculty suffers from the elimination of merit pay. If even one faculty member goes into "cruise-control," the overall quality of the faculty will fall with the new contract. So much for the direction of the university. Most private universities, whether or not tenure is an issue, can reward hard-working, productive faculty with above average raises and bonuses and punish underperformers by withholding large raises. At our public university with its monopolized faculty, this is not an option.

In the tentative agreement, there is no merit pay this year and no merit pay next year, but there might be merit pay starting in 2003. Merit pay might return, but only if the salary increase is 3.5% or more in July 2003. The wording in the tentative agreement curiously gives all those within the union who oppose merit pay a perverse incentive to keep that year's salary increase under the trigger level. Suppose the legislature was thinking about granting a 3% increase in July 2003. The union would lobby with some vigor that 3.4% is a better number. Alternatively, suppose the legislature (perhaps guided by the rate of change of the CPI) was considering a 3.4% increase. Can anyone honestly believe that the union, in its lobbying efforts, will argue with the same vigor that 3.4% should be increased to 3.8%, thus putting merit pay back on the table? Remember, the union has already cost me over $1000 in its negotiations to scuttle merit pay.

One other issue concerning the tentative agreement deserve mention, namely, that lecturers with six consecutive years of service will receive three-year contracts. This is largely a symbolic measure. Lecturers who perform their jobs well are typically hired back repeatedly, as long as there are courses uncovered by tenured faculty. A three-year contract will hardly change this situation. If there are no students to teach, the lecturer will not be rehired, three-year contract notwithstanding. If anything, Deans and bean counters now have another perverse incentive not to rehire a part time faculty member in year six. Another effect of this language would will be to allow lecturers with six years of service to go into "cruise control" much the same as tenured faculty. At still another level, lecturers should be worried in that the union and the administration have agreed to make a serious effort to reduce the percentage of courses taught by lecturers anyway. One wonders how long the union can continue to pretend to cater to both tenured faculty and lecturers when their interests become opposed to each other. This is a classic conflict of interest. Did the union bargain away nine months of the 2% raise for regular faculty because of a promise to obtain extra benefits for lecturers, while at the same time promising to work toward displacing lecturers with tenured positions? The union will say that it wants to increase the tenured/tenure-track-faculty-to-student ratio without displacing lecturers. Orwell called this doublespeak and predicted that the main worry would be that the perpetrators of doublespeak would not even recognize it as such.

By now it is clear that I am not impressed with the union or with the tentative agreement that it "won." Nonmembers have been bombarded with pleas to join the union and vote for the contract as a show of support in the antagonistic, one-upmanship battle with Chancellor Reed. I briefly considered joining the union to vote against the contract until I saw the sample ballot. The sample ballot had only two choices, (1) to accept the Tentative Agreement, or (2) to reject the agreement and authorize the union to declare a strike. How is that for a Soviet-style election? Why couldn't I vote to accept the Chancellor's original offer calling for the raise retroactive to last July and including the previous form of merit pay? In fact, why couldn't all faculty vote on such a choice? Is the union afraid that too many faculty would have preferred that contract, thus showing for all to see their own irrelevance?