News & Issues

Neutral Arbitrator’s In-Depth Analysis Sides with UC Clerical Workers
Adapted from the website for the Coalition of University Employees

In August 2004, the State of California established a fact-finding panel to recommend a settlement of the current impasse between the University of California (UC) and the union representing UC clericals -- the Coalition of University Employees (CUE). The panel included one member appointed by the University (Peter Chester, a University Labor Relations Assistant Director), one member appointed by CUE (Henry C. Levy, a certified public accountant) and a neutral Chairperson selected jointly by the parties – the widely-respected Arbitrator, Gerald R. McKay. The panel held a five-day evidentiary hearing in November 2004, and both parties submitted over a thousand pages of documents for the panel to review.

Neutral fact-finder and Arbitrator McKay issued his fact-finding report on February 17, 2005. The AAUP chapter at UC Santa Cruz (SCFA/AAUP) supports the findings of this report, in which McKay took the University to task for failing to offer any wage increases to clerical employees when data showed that UC could afford to do so. McKay stated that there were “fundamental flaws in the University’s basic position” and that there was “no question that the University is in a position to afford a wage increase for the clerical employees,” concluding that while the University may or may not continue to refuse to provide a wage increase to its clerical employees, “the University’s claim that it does not have the money to spend on them is not supported by the evidence.” Further, the SCFA/AAUP hopes that the UC will acknowledge the report’s three preliminary findings and will take the necessary steps to address the concerns laid out within the report’s conclusions.

McKay fully confirmed what CUE has long been asserting -- UC diverts money earmarked for clerical wage increases, choosing to spend the money elsewhere or adding the money to reserves. In the last year alone, the University has diverted $20 million intended for clerical wage increases. As Arbitrator McKay explained, in 2003-04, the University had $20 million in “non-State” money (money from sources other than the State) earmarked toward clerical wages. The cash-strapped State of California was unable to kick in an additional $10 million (which, when combined with the $20 million in non-State money earmarked for clerical increases, would have permitted the University to provide an across-the-board 6% wage increase for all clericals). UC used the state’s failure to provide the additional money as an excuse to divert its $20 million in non-State money away from clerical wage increases. This $20 million includes money earned by the University on research contracts, grants and other such funding sources that build in a particular percentage wage increase each year for clerical workers, among others. Yet, the University has refused to divert any of that money to clerical wage increases. Ironically, as the report noted, despite the fact that numerous other UC employee groups almost exclusively receive funding from the financially-strapped state coffers, they nonetheless received wage increases in the last year. While the non-state revenue resources that make up the bulk of clerical wages have rapidly increased in recent years, UC has refused to tap into these resources to determine a fair wage offer for its clerical employees. Instead, UC has used the State’s fiscal crisis to its advantage and has offered frozen State funding as an excuse to refuse wage increases. The SCFA/AAUP agrees with CUE that this some of this money should be spent, as originally intended, on wage increases for clerical workers.

McKay also reported that UC makes a huge profit every year, partially at the expense of its employees -- in 2003-04 alone the University had a net income of $786 million, the best UC has ever had and following years that were also quite profitable, according to data presented during the fact finding session. These profit figures were calculated after taking into account the fact that UC spent between 2 and 2.5 billion dollars on capital projects such as new construction each of the last two years. While UC undoubtedly has many important items to spend its money on, Arbitrator McKay noted that the University’s chief witness on financial matters admitted under oath that he did not predict any change in UC’s pattern of taking in many millions of dollars more than it spends each year. Among the many reasons that UC made such an extraordinary profit last year was that it declined to spend the $20 million in non-State money earmarked for clerical wages (had it spent that money for the intended purposes of clerical wage increases, UC still would have made an extremely healthy profit of $766 million). In fact, Arbitrator McKay’s report suggests that UC has fared better financially in years such as 2003-04, in which it used the State’s fiscal crisis as an excuse to withhold wage increases. The SCFA/AAUP agrees with CUE that the UC should acknowledge that it has sufficient financial reserves to offer its clerical workers the wage increases originally earmarked for them.

Arbitrator McKay found that UC clerical employees were “among the lowest paid employees working in the University system.” Further, he noted, the cost of living has increased 26.3% in the past 7 years, yet clerical pay ranges have gone up by only 9.5% in the same time period. The most shocking wage disparities, however, are found when UC is compared to comparable employers. McKay found that when assistant positions at UC were compared to comparable positions at CSU, UC clericals “earned approximately 22.7% less.” -- for library assistants the wage gap was 33%. The fact that UC pays clericals wages that are so much lower than wages at CSU is especially troubling because CSU receives 72% of its operating funds from the state, while UC receives less than 15% state funded. While the State’s fiscal crisis has led to very real cuts in CSU’s overall available revenues, the CSU has still managed to pay its clerical employees substantially more than has UC. As a stopgap measure to slow the rate at which clericals are falling further behind, Arbitrator McKay recommended immediate 1% - 2% retroactive wage increases for the primary clerical classifications at UC (Administrative Assistants), as well as wage increases that would provide Library Assistants with immediate parity with their clerical colleagues. While UC has chosen to ignore this scathing report, CUE leaders are currently discussing how best to force the University to take CUE seriously in its demands an end to those practices. The SCFA/AAUP offers its support on behalf of CUE in its efforts to gain originally intended wage increases for UC clerical employees.

Please visit the CUE website for more information on the fact-finding report, to download the report in its entirety, and to see updates on CUE’s campaign regarding clerical wages.

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