Bullhorn - #ReasonsToResist at UBC: Finance and Labour

This is Part Two of a series from The Talon on Reasons to Resist at The University of British Columbia. See Part One: Tuition and Housing here.

The focus of this series is to reflect and extend the current state of activism on campus, by evidencing yet more potential issues related to financial and negotiating power at the University. It is by no means intended to cover all legitimate grievances, and even in the areas on which it focuses, it should be taken as nothing more than what it is: the angry research of a debt-encrusted grad student.

It shouldn’t take much to convince people that how an institution moves its finances around and negotiates labour compensation are incredibly important. In fact, more often than not, workers struggling for fair conditions and pay are given decidedly unfair offers based on numbers that might not be accurate, due to how these funds are distributed and reported. Such tactics highlighted below do not only impact workers on campus by depriving them of the opportunity for fair work and compensation; they also rob increasingly pressured students of the same funds, and maintain a detrimental culture on campus of underpaid and under-appreciated labour by those that literally keep the University running.

This capitalist culture of profit over labour compensation degrades service quality over time, among other privatization problems, and it encourages management to drop said compensation to the lowest rates with which they can functionally and legally continue. Increasing profit-mindedness in a public institution will always generate these results in some fashion, and they have a tendency to spread to other parts of the institution. Additionally, all campus workers are deserving of the same rights, protections, and public support of anyone struggling to get by, and they are also often being rhetorically spit on in negotiations by the same administration that does the same to students, with similar justifications.

Finance and Labour

Reason #34. It is very important to note that, yes, UBC is a public institution, and even anot-for-profit entity and a registered charity (“therefore exempt from income taxes under section 149 of the Income Tax Act”) (p. 6), but the University contains multiple subsidiariesthat aim to make profits, particularly through housing and development loans and financial investments, and makes significant profits every year (p. 2).

Reason #35. For example, the sole purpose of the Student Housing Financing Endowment(SHFE) is to charge interest on loans to Student Housing and Hospitality Services when they build new housing, in order to contribute to the Spending Account for the TREK Endowment Fund. But even the standard 5.75% interest rate has been increased for more recent projects,such as the Orchard Commons housing, to about 6.15% (p. 7). Where’d the extra amount come from? Administrative fees (p. 8) from the University’s wholly-owned subsidiary Investment Management Trust Inc. (IMANT), who manage the majority of the University’s investmentsacross 6 portfolios, totaling $2.8 billion.

Reason #36. UBC’s main endowment fund managed by IMANT sat at an all-time high of about $1.3 billion in March 2014, gaining an average return of 10.1% a year over the past 4 years. (2014: 15.6% return, 2013: 10.9%, 2012: 3.1%, 2011: 10.8%) In the 5 months from March 31st to August 31st this year, the SHFE made $35.1 million, and the IMANT endowments made $66.7 million. Other endowments in excess of $100 million that the University holds elsewhere earned $4.7 million in that time.

Reason #37. While endowment funds managed by IMANT generate over $100 million a year for both further investment and creating new funding programs, the amount able to be spent is limited in order to maintain the fund over time. The current spending rate is 3.5%, the lowest rate in over 20 years, despite high performance for almost 10 years straight. The University uses low performance in the 2008 financial crisis as justification to keep endowment spending low (p. 3), even though, in the long-term, endowment funds have almost only grown.

Reason #38. A financial “Report on Ability to Pay” commissioned by the Faculty Association provides a decent summary on the background of this profiteering issue at UBC, and also gives reason to question the budgets we are presented. According to the report, the University consistently has an annual “unrestricted operating surplus” over its spending, or in other words: profit. A “restricted operating surplus” must be spent on certain things, but the University can mostly do what it wants with unrestricted surpluses. These profits have run anywhere from $44-135 million a year between 2008-2012, for example (p. 2).

Reason #39. What do they do with these profits? The University moves the majority of them, along with other funds to easily total over $150 million a year, into two places: administration, management, and professional staff and financial investments (p. 1-3). This movement of funds has also created deficits, which can be reported to the public for the University to act broke (p. 3). It’s easier to do this when unrestricted operating revenues are not disclosed on financial statements and unrestricted and restricted surpluses are always consolidated in reporting, as is standard practice at UBC (p. 2).

Reason #40. As the above demonstrates, besides downplaying profits from the public eye, profiteering by public institutions in general almost always runs into problems. Primarily, they tend to do everything they can to redirect profits away from workers and into capital investment and management benefits. For a more detailed example, we’ll look at the 2012 labour dispute and strike from the TA union, and its relevant history. To start, the strike was over largely the exact same issues they striked over in 2003: stagnant wages and high costs to work.

Reason #41. Despite the fact that TAs must pay tuition in order to be employed, in 2003 UBC had refused to consider tuition waivers for them. Instead, UBC Public Affairs Director Scott Macrae suggested that struggling students push to “advance financial assistance.”

Reason #42. A Freedom of Information request later revealed that the only reason the 2003 strike was stopped by the government is because then President of UBC Martha Piper directly asked the province to protect the school year from being “lost” due to the TA union’s withdrawal of services. A BC university president not only can, but in fact did call provincial legislators in order to shut down a legitimate labour strike. Despite President Piper’s fears, Quebec has, for example a 54 year history of 12 student strikes, and their provincial government threatening to cancel semesters at least 8 times, but has never “lost” a term.

Reason #43. In response to President Piper, the BC Legislative Assembly forced striking student workers to stop striking and return to their jobs with Bill 21: “The University of British Columbia Services Continuation Act.” While this act has not been deemed unconstitutional by the Supreme Court as other similar “back-to-work” legislation efforts in BC, the text of the actspecifically states that it performs its function “despite the Labour Relations Code,” putting a “cooling off” period in place between the union and employer (by specifically stating old contracts will be applied to present employment, in effect settling the dispute in favour of the administration). The act lasted for almost 3 weeks, ensuring nothing but talks (which had failed so spectacularly for so long, leading to the strike) were the only legal means available to the union.

Reason #44. The right for a union to strike was effectively, if temporarily, removed. The entire Bill 21 was rushed through all stages of legislation in a single day (March 12, 2003) thanks to special designation under the little-known Standing Order 81 of the BC Legislative Assembly. Can you think of another provincial law that passed every stage of ratification in a single day?

Reason #45. The actual discussion of Bill 21 in the legislative assembly saw MLA Joy McPhail demonstrating (p. 5463-65) that not a shred of evidence could be produced that suggested the on-going strike negatively affected students, and that the urgency with which the proceedings occurred were unfounded. The opposition’s argument (p. 5465-67) focused on students’ term papers and final exams approaching in a few weeks, and lack of TA-led sessions, stating these were urgent enough reasons to force the union back to work. Apparently they had not been told that extending a term and negotiating emerging issues between students and faculty seems to have worked fine for Quebec’s tumultuous university labour history. Regardless, the Labour Relations Board already heard all these argumentsprior to this, and determined them to not be significant enough evidence of a service disruption to students to warrant action (p. 5463, 5467). The bill passed anyway.

Reason #46. This was all shortly after then UBC President Martha Piper successfully pleaded that her wage was significantly lower than those in comparable positions, allowing herto circumvent the Public Sector Employers’ Council’s guidelines of a 0% wage increase (p. 3). She gained a 63% wage increase, making UBC President one of the best paying jobs in BC’s public sector, a tradition it has not failed to carry on.

Reason #47. Top managers, directors, admins, and execs at UBC got raises in compensation between 10-30% in 2009, before the BC government’s “Net Zero Mandate” from 2010-12, which prevented public union wages from rising more than inflation (~2%) without equal cuts to benefits.

Reason #48. During this 2010-12 Net Zero Mandate pay freeze, management and administration positions at UBC that make $75,000+ a year in compensation received an average 4% annual raise, allowed to circumvent the Net Zero Mandate due to the language of their contracts, which require financial awards for reaching certain expectations of “merit” and “performance.” These increases total $9 million or half of the entire striking TA union’s wages in 2012. This is not surprising, considering UBC’s history of giving all those involved in labour disputes nice raises, except for underpaid workers that bring labour disputes.

Reason #49. From 2005 to 2011, administrators and managers at UBC received steady wage increases, and top executives’ wages went up by double digits, sometimes 20-30%. Despite UBC’s “world class” research reputation built on the work of its faculty, as of 2012, faculty salaries at UBC were 19th in Canada. The University’s faculty professional development funds are the lowest in BC, restricting them from advancing their ability to maintain that reputation. Faculty not accepting a raise far below the rate of inflation as a legitimate raise offer makes the university “extremely disappointed.”

Reason #50. In 2012, after 2 years of trying to bargain, the university proposed 0% wage increases per year for the TAs for 2010-12 and 1.5% wage increases for 2012-14 (or 0.75% a year for 4 years total), not even matching half of the rate of inflation or tuition increases. BC’s Net Zero Mandate is again used as their justification.

Reason #51. UBC employees that earn over $75,000 a year alone draw $452 million a year in compensation from the University, about 45% of total compensation paid to all employees. A “Living Wage” in Vancouver in 2012 was considered $19.14 an hour, or around $40,000 a year.

Reason #52. It is not particularly unusual for top executives at UBC and its real estate subsidiary UBC Properties Trust, already making over $100,000-$200,000 a year in total compensation, to get annual raises of 10-20% or more.

Reason #53. UBC Properties Investment Ltd. (the trustee of UBC Properties Trust) acquires, develops, and manages real estate for the university. It’s four senior administrators averageover $300,000 a year (p. 4).

Reason #54. Former UBC President Stephen Toope made $587,366 in total compensation in fiscal year 2013-14, making him the 3rd best-paid public sector employee in BC at the time. Of this, $378,000 was his base salary. Current UBC President Arvind Gupta’s base salary on his April 2014 contract is $446,750. If all other benefits maintain their value from the previous year, this would make President Gupta’s total compensation for 2014-15 about $656,116.

Reason #55. According to An Analysis of the Gender Pay Gap in Professorial Salaries at UBC, female faculty make an average of over $14,000 a year less than male faculty at UBC (p. 2).

Reason #56. $3,000 of this difference is “considered discriminatory” (p. 2). While the report was not meant to address hiring practices, it attributes about $9,000 of the difference to the facts that “women account for about 38% of faculty members at the Associate and Assistant [lower pay] level, [and] they account for only 21% at the Full Professor [higher pay] level,” and less women are in higher-paying departments than men (p. 2).

Reason #57. Faculty pay isn’t the only gendered labour compensation issue at UBC. Childcare workers and early childhood educators, the vast majority of whom are women,earned significantly less wages than most other skilled professional workers on campus in 2012. This did get slightly better in 2013, but only as the direct result of a union caucuscampaign that included strike notice.

Reason #58. Perhaps a potential child care workers strike was so effective because UBC has an established history of intimidatingly long waiting lists for child care. This also disproportionately impacts women students and workers, whether already with a child or considering one. These waiting lists are consistently anywhere from 6 months to 3+ yearslong. If you want infant child care at UBC, you are advised to get on the waiting list within the first few weeks of conception.

Reason #59. Cost of childcare services at UBC have risen about 25% in the past 3 to 4 years. Most campus workers’ wages, child care or not, have not risen at all when considering inflation.

Reason #60. There is significant evidence, partly made available through Freedom of Information request, of a shady capital flow procedure in which that UBC took a $3.5 million “contribution” in 2010 from developer Modern Green through its subsidiary UBC Properties Trust, explicitly in exchange for allowing the construction of the pricey Yu at Wesbrook condo building. The payment also just happened to precede multiple regulation changes or relaxations in early 2011 that would have prevented the eventual approval of the building’s permit in 2012. This potential bribe, claimed by CFO of UBC Properties Trust Don Mathesonas simple collateral should Modern Green go back on their lease payments, calls into question UBC’s ability to ensure compliance with existing financial policies and regulations.

Reason #61. The University’s Vancouver Senate is also trying to change the admission standard (p. 21-27) for international students receiving extra English training at Vantage College to be admitted into UBC in their second year. “The proposed change clarifies” that successful completion of the 11-month Vantage College program itself will suffice to meet the requirements to transfer into another department at UBC. Regardless of whether an individual student has actually improved their English through the program, the fact that their professionally priced tuition has been paid and they have passed their classes means that their ability to comprehend English language instruction is expected to meet any second-year Arts or Science lecture in a UBC program. This makes the entire program seem far more of a money grab than a language learning platform.

Reason #62. It is very likely a result of UBC’s profit-seeking that a little under half of students who have been around campus for awhile to see campus developments as not concerned with students. The longer students attend, the less they believe that “campus is being developed with students’ needs in mind” (p. 4). 43% of 1st year students agree with that quote, and 20% of them reject it. But 23% of 5th year students agree with that quote, and 41% of them reject it.

Students should be as concerned about the how their university funds itself and deals with its workers as any faculty member, labour organizer, or education minister. It is far too easy to lose sight of economic and social sustainability amidst the trendy rhetoric of environmental sustainability, but all are equally as important to establish and maintain practices that don’t further oppress those we’re often allegedly learning how to help in university.

All our oppressions are linked. Whether you’re a student, worker, student worker, or their family, capitalist influences in the University are not only paying you less and charging you more, but they are also moving funds they do have away from you and toward further investments.

With that in mind, I feel an appropriate way to end this is to warn anyone looking at UBC budgets and projections to remember this, from that “Report on Ability to Pay” commissioned by the Faculty Association: “As with many universities, UBC’s budgeted figures for the future tend to be pessimistic and should therefore not be relied upon as a basis for assessing ability to pay” (p. 2).

If you have something that should be added to this list, spread it on Facebook or Twitter with #ReasonsToResist, or just all over campus with old-school flyers, wheatpaste, or tags. Or, stuff executive and administrator mailboxes with reasons why you don’t condone their actions.

This instalment of #ReasonsToResist was completed with additional files from UBC Insiders.