Cuomo, Wall Street and Class Struggle at CUNY

By Glenn Kissack*


On May 12, 2016, the Professional Staff Congress (PSC) – the union representing faculty and staff at the City University of New York – announced the results of a strike authorization vote: 92 percent of the more than 10,000 members who voted had voted “Yes.” This strong signal of support reflected anger and frustration over being without a contract for almost six years, and without raises since October 2009. Earlier, more than 5,000 PSC members signed a public pledge to support strike authorization, and when balloting began, they were joined by thousands more.

The PSC had been in a protracted battle with the city, the state and CUNY management since its collective bargaining agreement expired in October 2010. The union asked for salary increases of 4 percent for 2010, as well as pay raises for later years to make up for a loss of real wages.1 It made demands to improve conditions for Higher Education Officers (HEOs), College Laboratory Technicians, librarians, CUNY Language Immersion Program and Start instructors, and adjunct faculty, as well as to reduce the high teaching workload. Besides the PSC, there were eight DC 37 locals and Teamsters Local 237 – representing more than 10,000 clerical, technical, custodial and security employees at CUNY – who had been without contracts for more than seven years. Without their labor, the colleges couldn’t function, yet the majority of the campus workers in DC 37 were being paid less than $15 an hour.

In the fall and spring of the 2015–16 school year, the PSC escalated its contract campaign, starting with an October 1 mass rally in front of CUNY Chancellor Milliken’s home, teach-ins on CUNY campuses that explained the funding crisis to CUNY students, including the plight of low-paid adjuncts – “professors in poverty,” both campus and city-wide rallies, including civil disobedience sit-ins at CUNY and Cuomo headquarters at which more than 90 union members were arrested.

On January 13, Cuomo responded unfavorably with his 2016-17 Executive Budget, proposing to cut the state’s allocation for CUNY senior colleges by an astonishing one-third. Under his plan, $485 million in CUNY operating costs would shift from the state to New York City, while CUNY’s total budget remained at austerity levels, and a new five-year round of $300-a-year increases in tuition would begin in September 2016. These tuition hikes would aggravate the burden on CUNY students, more than half of whom come from families earning $30,000 or less, for whom financial aid has not kept pace with tuition, and who often have difficulty paying other rising costs (transportation, books, student fees and living expenses).2

In defiance, the PSC, DC 37 unions and allied student and community groups joined together in a CUNY Rising Alliance mass protest at Cuomo’s Manhattan offices on March 10, followed by a spirited march and indoor rally at a community church where students, alumni and faculty passionately testified to the need for increased – not decreased – state funding for CUNY. As the days counted down to the April 1 deadline for a new state budget, forty-one PSC members, students and supporters lay down in front of Cuomo’s office in a “die-in” and were arrested on March 24, while hundreds of faculty, staff and students chanted “C-U-N-Y, Don’t Let CUNY Die!”

A week after the rally, in the early morning hours of April 1, the Assembly and Senate passed a NYS budget that included very little new money for CUNY and not a penny for retroactive salaries for faculty and other campus workers.3 The legislators had dutifully accepted what had been agreed to by the “three men in a room” – Assembly Speaker Heastie, Senate Majority Leader Flanagan and the most powerful of the three, Governor Cuomo – the details shown to them only hours below. One assemblyman complained:

This entire week we were promised a budget and yet here we are in the final hours before the budget is due and we have virtually nothing. These three men have deliberately chosen this path as a means to ensure a forced vote without our Legislature having time to read the budget thoroughly.4

The enacted budget was deeply disappointing to those who work for CUNY and who thought they might soon have a contract and at long last receive salary increases and other improvements. Instead, they were astonished to learn that:

  • $240 million for retroactive salaries – which had been included in the budgets of both houses – had disappeared. Cuomo had insisted it be taken out, promising he would request a supplemental pay bill after a negotiated settlement. This granted him tremendous leverage in negotiations over the terms of a new contract, since CUNY managers would only agree to monetary terms first approved by the Governor.
  • There was no hoped-for Maintenance of Effort provision in the budget, further straining budgets for CUNY colleges and exerting pressure for a tuition hike beginning in September 2017.

Cuomo’s threat to shift $485 million in spending from the state to the city proved to be a clever maneuver. It was not only opposed by NYC officials, but also quickly condemned by influential business-financed groups like the Citizens Budget Commission and the Partnership for New York, as well as editorialized against by the New York Times. With little chance of passage, it succeeded in diverting attention from austerity funding for the university. In rejecting the cost shift, crafty politicians like Assembly Speaker Heastie were able to claim “victory,” ignoring that 35,000 campus workers had been left in dire straits and that inadequate funding for CUNY will likely mean a new round of tuition hikes for 274,000 students beginning in the fall of 2017.5

In the early hours of June 16, a little more than a month after the 92 percent strike authorization vote was announced, the PSC bargaining team agreed to the terms of a new contract with CUNY. Salary increases totaled 10 percent (10.41 percent when compounded) over seven years, exactly what the DC 37 CUNY unions – the PSC’s weak allies in the CUNY Rising Alliance – had accepted the week before. The CUNY negotiators had to receive the Governor’s approval for any salary offer, and the 10 percent over seven years fit the pattern that Cuomo had established of forcing unions to accept increases below the rate of inflation. Moreover, the 4 percent increase for 2010 that other state unions had received – and which would have provided tens of thousands of dollars of retroactive pay to individual members – was gone, replaced by a zero percent increase for the first 18 months of the contract.6

The Governor had proved to be a formidable opponent, who remained stubbornly intransigent while the PSC pared its salary demands: In May 2015, the union publicly demanded salary increases of 18.5 percent over six years. In November, when the Governor had CUNY offer only 6 percent, the PSC responded by lowering its demand to 14 percent. By May 2016, the PSC demand had dropped to 12 percent over six years, a few weeks after the California State University faculty had won salary increases of 10.5 percent over three years. As the Albany legislature prepared to adjourn for the year, Governor Cuomo had CUNY present a “take-it-or-leave-it” offer of 10 percent over seven years, including zero percent increases for 2010 and 2011. Faced with the choice of either accepting the Governor’s offer or preparing for a further battle in the fall – including the possibility of a strike – the PSC decided to take the deal. In the battle of wills between the Governor and the PSC and the DC 37 locals, the Governor had prevailed.

However, the PSC was able to point to a number of important non-economic gains in the new contract: three-year appointments for long-serving adjuncts, more annual leave for librarians, management’s written pledge to work on a plan to reduce faculty workload, and the possibility of reclassification and higher pay for HEOs who assume “increased responsibility.” Yet Governor Cuomo had also succeeded in having the legislature pass another austerity budget for CUNY (with virtually no new money for the senior colleges). Funding remains stagnant, following a 17 percent decline in real dollar spending per full-time student equivalent since 2008.7 Although the multi-year appointments for some adjuncts was a breakthrough, no seniority system was achieved for them and their salary increase was the same 10.41 percent over seven years, widening the salary gap and making it more economically attractive to hire contingent rather than tenure-track faculty. Finally, with an austerity budget it’s unclear where CUNY will find money to reduce faculty workload or pay higher salaries to HEOs.

The class aspect of the PSC contract struggle

What were Governor Cuomo’s goals during the contract dispute and how did he manage to impose his will on the final outcome? In the six months before his January 13 State of the State speech proposing the cutback in funding, Cuomo received $5.5 million in campaign donations. His list of donors “is dominated by hedge funders and real estate developers,” and includes hedge fund manager Stanley Druckenmiller, whose personal fortune is $4.4 billion. Druckenmiller is passionate about politics: he advocated for reducing entitlement benefits like Social Security, he supported Chris Christie’s run for president, and he shares with Cuomo an affection for non-union charter schools. In 2014, he gave $1 million to the NY State Democratic Party, which used much of its money to re-elect Cuomo. Other billionaires, including Paul Tudor Jones, James Simons, and Daniel Loeb, also gave large sums to Cuomo.8

This essay argues that the PSC contract struggle was not only fought against a stubborn Governor and his submissive Chancellor. It was waged against a more powerful force – the New York business class, particularly the financial and real estate sectors centered in New York City, the financial and corporate capital of the country. The PSC battle was part of a larger social struggle that confronted three business-elite-driven objectives: (1) Lowering labor costs in both the private and public sectors, (2) reducing spending on public services, in particular public higher education, and (3) keeping business, commercial property and high-income taxes as low as possible. Writing about the 1970s, one analyst noted that working class communities’

priorities (schools, housing, health care, parks, sanitation, etc.) were different from and frequently in conflict with those generally ascribed to New York’s business elite, who saw capital infrastructure improvements that improved land values, restricted spending on social programs, restrained city worker wages and benefits, low property and business taxes, and tax breaks on office and luxury apartment construction in the central business districts as priorities.9

In today’s battle over priorities, the PSC – in demanding funding for both a fair contract and a quality education for CUNY students – was at a disadvantage because the balance of forces weighed heavily against the union:

  1. The business class has immense resources. Nationally, the wealth of the richest .01 percent of US families is a staggering $6 trillion, a portion of which is used to purchase the loyalty of politicians, establish lobbying groups and think tanks, and own the media that projects their views. NYC is home to 79 billionaires whose combined fortune is $364.6 billion.10
  2. The Governor – and government in general — is not neutral, but rather favors and acts on behalf of the business class.11
  3. Given the strength of the opposition, any individual union would have trouble making much progress, especially with the intimidating specter of the Taylor Law (which outlawed strikes by public sector workers) and the absence of solidarity among NYC unions, as evidenced by the rarity of joint action even with those unions whose members work at CUNY. Additionally, the pernicious two-tier system of full- and part-time faculty created divisions that threatened the unity of the PSC, as part-time faculty (the majority of the teaching staff) reasonably wondered how much they’d gain from a new collective bargaining agreement.12

The men behind the curtain

Chancellor Milliken receives more than $900,000 a year in compensation, including his rent-free $19,500-a-month apartment. His loyalty is to the people who hired him, and his outlook is closer to that of millionaires like former CUNY Board of Trustees chair Benno Schmidt than it is to faculty and students. With Cuomo controlling 10 out of 16 votes on the CUNY Board of Trustees and able to control the choice of Chair, Milliken is careful not to bite the hand that feeds him.

Cuomo’s entire career has been one of cuddling up close to the rich and powerful. He married the wealthy Kerry Kennedy in 1991, before going to work for the Clinton administration, where he rose to become Secretary of Housing and Urban Development. Typical of the revolving door between government office and business, after leaving HUD Cuomo went to work for one of the companies his office regulated – Island Capital Group LLC, a real estate investment firm with properties all over the world. The owner of Island Capital – billionaire Andrew Farkis – paid Cuomo a handsome $2.5 million over three years.13 Farkis – no doubt seeing an opportunity to vault Cuomo into the state’s most powerful political office — contributed heavily to his run for Attorney General and later for Governor. He and his business associates donated $800,000 to Cuomo’s electoral campaigns and Farkis served as Cuomo’s finance chairman in his first successful gubernatorial run.

As soon as he was elected Governor in 2010, Cuomo quickly demonstrated his class loyalty by coordinating with powerful business interests in the Committee to Save New York (a billionaire’s club of real estate developers, bankers, and hedge fund managers) to aggressively lobby for a program of lowering the tax rate on millionaires, reducing the state’s K-12 spending by $1.3 billion (7,000 teachers were laid off), cutting funding for Medicaid, forcing state unions to accept income-lowering concessionary contracts, and ramming through a Tier VI pension plan that reduced pension benefits for new employees. With the assistance of Cuomo and the leaders of both legislative bodies, the austerity program was implemented in its entirety.

While Cuomo twisted arms in Albany, the Committee to Save New York (CSNY) spent $12 million on TV and radio ads supporting his austerity plans. In the leadership of the CSNY was the Real Estate Board of New York (REBNY), composed of billionaire real estate magnates like Rob Speyer, Steven Spinola and Bruce Ratner – who enjoyed lavish state tax incentives while promoting austerity for state workers and school children. In league with REBNY was the Partnership for New York City, founded by David Rockefeller and composed of a red-carpet list of NY’s most powerful business titans such as Jamie Dimon and Lloyd Blankfein of JP Morgan Chase and Goldman Sachs, respectively, as well as private equity giant Henry Kravis (worth $4.8 billion) and hedge fund manager John Paulson (worth $11.4 billion).14

Another admirer of the Governor is Ken Langone, the billionaire co-founder of Home Depot, who contributed $50,000 to Cuomo’s 2014 campaign for re-election. Langone typically donates lavishly to Republican candidates. However, he called Andrew Cuomo “one of the greatest governors I’ve ever seen,” enamored with the Governor’s pro-business policies and strong support for charter schools.

David Koch – who with his brother Charles is despised by progressives for financing Wisconsin Governor Scott Walker and the law firm that brought the Friedrichs case (which sought to financially cripple public unions) to the Supreme Court – contributed $87,000 to Cuomo’s 2010 gubernatorial campaign, more than double what he gave Walker.15

Although Cuomo has to worry about the unpopularity of his austerity policies, he knows that millions of dollars of contributions from wealthy business people means he can afford to pay for the elements of a successful electoral campaign: full-time managers and personnel, offices around the state, and television and radio ads for his re-election. Money translates into votes.

Glenwood and the “three men in a room”

Among the largest contributors to the Committee to Save New York, with a hefty grant of $800,000, were the executives of Glenwood Management Corp. Glenwood, owned by billionaire Leon Litwin, is a major builder, owner and manager of luxury apartment buildings in NYC. The company has been the number one contributor to Andrew Cuomo, giving him more than $1 million in 2014 alone. Glenwood also directed large sums to the campaigns and personal bank accounts of the other two men who dominated Albany decision-making: Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos. Together, they were the notorious “three men in a room” who decided which legislation passed in Albany. Former State Senator Seymour P. Lachman vividly describes their enormous power in his book Three Men in a Room:

[A]lthough there are 212 legislators in Albany, just three men hold virtually all the cards; the Governor, the Speaker, and the Majority Leader, known as the Big Three. They determine the details of the budget, which happens to be the fourth largest in the nation, behind the federal government’s and that of the states of California and Texas. They hire most of the staff, including those who draft most bills. The leaders also dispense committee chairs and membership assignments, assign offices and office furniture, and run all the services that legislators rely on, from publications to payroll. Should a member of one of the two houses author a piece of legislation, the leader decides which committee it goes to, whether it is passed in the committee, and when or even if it gets passed out for a (predetermined) vote on the floor.16

Lachman goes on to explain why Albany legislators vote the way party leaders instruct. Obedience guarantees a successful political career, while opposing the leadership incurs swift punishment: withdrawal of “member funds,” loss of committee assignments, gerrymandered voting districts that work against their re-election and dreaded primary election challenges.

In order to obtain legislation favorable to Glenwood, the company coddled the three men who determined which bills came up for a vote, and who had the capacity to line up the necessary votes in the Assembly and Senate. Glenwood executives and lobbyists knew how the game is played, having contributed over $10 million to political candidates and party committees since 2005.17 Spending a few million to secure laws from which the firm gains hundreds of millions was a no-brainer. Glenwood’s fortunes depend on winning favorable rent regulations, tax abatements and state financing for their projects. 421-a tax breaks transferred money from taxpayers to wealthy developers, with Glenwood saving $181 million in property taxes on just four of its luxury apartment buildings.18

The political system is structured to facilitate powerful business interests getting what they want. PSC members would learn how infuriatingly undemocratic the state legislature is when on December 11, 2015 Governor Cuomo vetoed a Maintenance of Effort bill that would have guaranteed that increases in mandatory costs (building rentals, heating and electricity, contractual increases) for CUNY and SUNY would be covered in future state budgets. Despite the bill passing both houses by a margin of 208 to 2, neither the Assembly Speaker nor the House Majority Leader moved to override the Governor’s veto. In Albany, the “three men in a room” decide matters by consensus, and the other legislators abide.

Cuomo the “fiscal conservative” and big business

To keep taxes low on businesses, Cuomo’s goal for the NYS budget has been to keep spending increases below the rate of inflation and far below the increase in tax revenues. In his 2016 State of the State Address, the Governor boasted: “The Executive Budget will continue the disciplined approach to fiscal matters that has defined the Governor’s first five budgets. For a sixth time, the Budget again limits the annual growth in State Operating Funds spending to 1.7 percent.”19

Belt-tightening for state workers and poorer conditions for public school students allowed the Governor to reduce taxes on the very people who financed his electoral campaigns. It gave buyers of expensive yachts and private planes sweet tax breaks in 2015, and allowed Cuomo’s re-election campaign to proudly report that year: “The corporate tax rate dropped from 7.1% to 6.5%, its lowest level since 1968. The income tax rate for manufacturers is now zero percent, the lowest rate since the tax was put in place in 1917.”20

Cuomo has assiduously carried out the Wall Street program of suppressing public sector spending and public employee compensation, handing out tax breaks to the rich, demonizing teachers for low student test scores, assaulting tenure and championing non-union charter schools. Having lowered worker real wages, pensions and health benefits in the private sector, the business class and their political allies have now placed the target on the back of public sector unions, and Cuomo has more than done his part:

  • Soon after taking office in 2011, Cuomo coerced two state unions ­– the Civil Service Employees Association and Public Employees Federation – to accept five-year concessionary contracts, threatening to lay off 9,800 of their members if they didn’t. These contracts featured a wage freeze for the first three years, followed by two years of 2 percent annual increases. Just as important, these 120,000 public workers had to increase their contributions to the cost of their health care premiums. State employees in the higher pay categories now pay 16 percent of the health premium for individual coverage and 31 percent for family coverage, which means paying nearly $5,000 a year for family health coverage.21
  • Cuomo’s next target was the United University Professions, representing 35,000 SUNY faculty and staff at 29 campuses. Following contract negotiations that were “accompanied by layoff tensions,” the UUP agreed to a five-year contract with virtually the same unfavorable terms as the other state union contracts.22 In the Governor’s mind, this is the pattern he had established, and the stalemate with the PSC was a test of his resolve. Allowing the PSC to break the pattern would have sent a message to other unions not to accept unfavorable contracts in the future – the last thing Cuomo wanted.
  • In 2012, Cuomo proposed reducing pension benefits to state workers by creating a new Tier 6 pension plan for new employees. In the middle of the night, at 3 AM, on March 15, 2012, Cuomo and legislative leaders Silver and Skelos released details of the new pension bill and called for an immediate vote. Before breakfast, the Republican-controlled Senate and the Democrat-controlled Assembly had brought the new pension tier to birth. The pension changes under Tier 6 rob retirees of $80 billion over 30 years by raising the minimum retirement age from 62 to 63, by requiring public workers to contribute more to their pensions, and by reducing benefits upon retirement. This was a bipartisan effort, with two of the three powerful Albany leaders who rammed through the inferior pension tier being Democrats.23

While bus drivers, teachers, laborers and secretaries suffered a monetary hit, the business community rejoiced. “Pension reform” had been part of the program of the business-financed Committee to Save New York, and upon the passing of Tier 6, Kathryn Wylde, president of the Partnership for New York City exulted: “The business community is encouraged that New York State is acting responsibly.”24

The Business Council of New York State, whose members are some of the world’s largest corporations, advocates for a “healthier business climate.” Unsurprisingly, the Business Council endorsed Andrew Cuomo for Governor in 2010 and 2014, impressed with his “fiscal ideology” and program of implementing a property tax cap that limited school spending, as well as allowing the “Millionaires’ Tax” — an income tax surcharge on wealthy New Yorkers — to expire. At the 2015 annual meeting of the Business Council, its president Heather Briccetti told reporters, “Eighty percent of what he’s done has been extremely beneficial to business,” noting that the Governor had kept the growth of state spending to under 2 percent annually, a feat that was partly accomplished by lowering per-student spending in real dollars by 5.1 percent from what it was in 2008.25

In return for his prodigious work on their behalf, big business interests rewarded Cuomo with $46 million in campaign contributions over a few years period, $20 million in one year. 341 donors gave $40,000 or more each, providing more than half the total. The top 10 donors – most of them real estate executives – gave at least $200,000 apiece.26 Hedge fund managers and executives contributed another $4.8 million to Cuomo, and spent $40 million in total to elect legislators solicitous of their interests.27

Whatever Wall Street wants

In a 2015 op-ed piece in the Wall Street Journal, the president of the Commonwealth Foundation, a “free-market think tank,” rued the fact that “compensation for government workers has grown 21% since 2000, compared with only 9% in the private economy.”28 In fewer than thirty years, businesses in the private sector reduced the percentage of workers with defined-benefit pensions from 35 to 18 percent, usually substituting the inferior 401(k)–type plans. Now they’ve set their sights on public employee pensions:

Wall Street, big banks, and wealthy privateers such as former Enron executive John Arnold and his Arnold Foundation are waging an all-out campaign in states to cut the modest pensions being earned by public servants and replace them with risky accounts that can lose thousands of dollars in the stock market in a single day. These same corporations fail to pay their fair share of taxes due to tax loopholes and giveaways. Yet, instead of eliminating tax breaks for the richest 1% and highly-profitable corporations, many politicians are jumping on the bandwagon and trying to scapegoat public employees for budget shortfalls.29

The politicians “jumping on the bandwagon” receive copious amounts of campaign money from the very people and corporations – like Glenwood — that benefit from favorable tax legislation.

NYC’s business elite also finance and control organizations that monitor the city’s spending, labor contracts and taxes. The Citizens Budget Committee (CBC) and the Partnership for New York City are two business-funded groups that inveigh against city budgets or labor contracts they deem profligate. The CBC website reports that it was “founded in 1932 by a group of merchants, bankers, real estate executives, and civic associations to advocate reductions in the costs of city government and study possible sources of new revenue” in the midst of the Great Depression. With a long list of trustees and directors from NYC’s business elite, the tax-exempt CBC issues periodic report cards evaluating state and city budgets. Expectedly, it graded Cuomo’s most recent Executive Budget proposal an A minus for “fiscal discipline,” saying it “deserves an excellent grade for continued spending restraint and no tax increases,” and for proposing higher tuition for SUNY and CUNY students.30

The Partnership for New York City is another highly influential group that pressures public officials to enact business-friendly legislation. Its stated goals are lower labor costs, reduced business taxes, especially on commercial real estate, and fewer government regulations. Its “Partners” consist of almost three hundred CEOs from NYC’s largest corporations, which provides it unmatched access to public officials. Established by David Rockefeller in 1979 in an effort to have business leaders play a more direct role in city affairs, the current co-chairs of the Partnership for NYC are James Gorman, Chairman and CEO of Morgan Stanley and an avid supporter of Hillary Clinton, and Philippe Dauman, President and CEO of Viacom, Inc., the sixth largest media company in the world.

When leaders of NY State public unions need to speak to someone in the Governor’s office about a new contract, they often confer with Bill J. Mulrow, who was appointed secretary (who functions as a chief of staff) to the Governor in early 2015. Mulrow comes directly from Wall Street, where he held high-ranking positions in large financial firms for thirty years, most recently as Senior Managing Director of the Blackstone Group, the largest private equity firm in the world. Stephen Schwarzman, whose posh Park Avenue apartment is reputed to hold Manhattan’s largest living room, and who is personally worth $12.9 billion, chairs Blackstone.31 Schwarzman has rather strong opinions about raising taxes on the wealthy, labeling proposals to end the “carried interest” tax break for private equity managers as “like when Hitler invaded Poland in 1939.”32 When Mulrow negotiates legislation and contracts, he’s defending the interests of oppressed billionaires like Schwarzman.

Confronting a ruling class

Cuomo’s obeisance to Big Money highlights how public officials tend to the interests of the ultra-wealthy owners of big business, who constitute an economic and political “ruling class.” This social stratum holds sway over both economic and political life. The New York Times describes who they are:

When pundits and presidential candidates talk about inequality and the tiny sliver of the population whose fortunes have soared, they often drop names like Warren Buffett, Bill Gates, Sheldon Adelson and Mark Zuckerberg. But those are just the most visible members of a larger but less-talked about cadre of the big winners in today’s economy. This group consists of roughly 250,000 Americans who mainly populate the executive offices and managerial suites of major companies and financial institutions, along with a smattering of top law firms, hedge funds and other elite aeries. These people – the top one-quarter of 1 percent of the country’s employed population – have enjoyed explosive gains in income and wealth in recent decades, even as salaries and wages stagnated for the typical American worker.33

There’s abundant evidence that the economic aristocracy regularly gets its way. A recent study by professors Martin Gilens and Benjamin Page reported on an exhaustive investigation of 1,800 policy initiatives from 1981 to 2002, some of which were opposed and some of which were supported by big business.34 The study concluded:

Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.[…] In the United States, our findings indicate, the majority does not rule – at least not in the causal sense of actually determining policy outcomes. When a majority of citizens disagrees with economic elites and/or with organized interests, they generally lose.

Political scientist Richard Miller has argued that economic elites – the owners and top executives of large corporations – constitute a ruling class because three necessary conditions are met: (1) The government consistently acts to take care of the long-term interests of big business, even when its actions are to the detriment of other groups. (2) There exist definite mechanisms by which the class of big business exerts its will on government. (3) The government cannot be stopped from serving the interests of the dominant group through activities that are sanctioned by the government (i.e. petitions, elections, etc.).35 There is a wealth of evidence that Miller is right.

The owners of the major corporations – a tiny fraction of the population – own $6 trillion in wealth, a sum equal to the total wealth of the bottom two-thirds of US families.36 There is no other group that has the resources to compete with this oligarchy, which uses a small fraction of its fortune to fund and direct influential policy groups such as the Business Roundtable, the Council on Foreign Relations, the Committee on Economic Development, the Heritage Foundation, the Brookings Institution, as well as an army of lobbyists.

Both major political parties cater to the demands of the wealthy donors who spend hundreds of millions of dollars on Presidential, Senate and House, gubernatorial and mayoral campaigns, electing candidates vetted for their skills in assisting the business oligarchy. Watching over every politician is the corporate media, the bulk of which is owned by a handful of conglomerates, who of course advocate on behalf of themselves and their class.

Beyond the personal and institutional ties of public officials to business interests, every public official is under relentless pressure to provide a favorable business environment for corporations, whether they are Wall Street investment firms or upstate manufacturers. Otherwise, investors can conduct an “investment strike” – move their companies to other states, or other countries, with lower costs of production. This withdrawal of capital results in lower state revenues and higher unemployment. As a result, companies can demand special treatment, as Alcoa recently did in New York. In order to convince the company not to fulfill its threat to close its upstate smelting plant, Cuomo agreed to provide Alcoa with $70 million in state subsidies. Over the last two decades, New York State has spent more than $5 billion in subsidies to persuade – some might say bribe – companies not to leave.37

The return on capital investments is much higher than the rise in personal income for workers (which has been mostly stagnant for decades), and this largely accounts for rising inequality. It’s the reason why the richest 400 individuals in the US have more wealth than the entire poorer half of the population. Their rapidly rising wealth provides the oligarchy with greater and greater resources to control the political process. No matter which of the two major parties is in office, the “permanent government” of big business is in the driver’s seat.

The defunding of CUNY

It would have been difficult enough for the PSC if it had only been confronting a Governor committed to forcing public unions to accept stingy contracts. However, the impasse with the Governor also occurred in the midst of a decades-long defunding of CUNY. Adjusted for inflation, state aid to CUNY senior colleges per student declined by 35 percent from the 1990-91 to the 2014-15 school years.38 If state aid to CUNY had only kept up with the rate of growth of New York State’s operating budget, the University budget would be $637 million larger than it is today – nearly 44% higher!39

To make up for the loss of state revenue, student tuition has more than quadrupled since 1990-91, and now pays for a much larger proportion of the operating expenses for CUNY’s four-year colleges: 46 percent in 2014-15 compared to 21 percent in 1990-91. In CUNY’s community colleges, student tuition – which has more than tripled in the same time period — now pays for 45 percent of the operating expenses compared to 22 percent in 1990-91. This has increased the economic burden on students from low and middle-income families, while doing nothing to prevent increased class size, reduced course offerings and decreased services.40

Another result of austerity funding for CUNY has been the relentless pressure to reduce the number of full-time professors and replace them with part-time contingent faculty. Even as the number of CUNY students climbed, the number of full-time faculty fell from over 11,000 in 1975 to about 7,700 today.

Disinvestment in CUNY and the growing reliance on poorly paid contingent faculty is part of a national phenomenon, with real dollar spending on public higher education having decreased for decades in most states. A recent study by the Center on Budget and Policy Priorities reported that forty-five out of fifty states were spending 17 percent less per student in the 2015-16 school year than they did before the recession hit in 2008. One result has been a 33 percent tuition increase at four-year colleges over that period. This sharp rise in college costs occurred at a time when household income was stagnant, leading to record levels of student debt.41

Reduced state appropriations have made it irresistible for university administrators to hire a growing number of part-time academic laborers who are paid only for the hours they teach, who get a fraction of the salary paid to a full-time professor, who can be dismissed when classes don’t run, who need not be paid full benefits or even provided with adequate office space, who have no academic freedom to criticize university policy, who are easy to control and have little or no input into university governance. Today, three-quarters of all faculty members in the US are non-tenure track. Universities have led the way towards an economy in which employees have no job security and few benefits.42

The rise of precarious work – what economists call “alternative work arrangements,” namely jobs as independent contractors, through temporary agencies, or on-call, with no job security and few if any benefits – has proceeded at a frightening pace. In 2015, nearly one out of every six US workers was in this position, up from one out of ten a decade earlier. Compared to ten years before, an additional 9.4 million people were now in non-traditional contingent jobs.43 Sadly, this is the awful present reality for many adjunct professors at CUNY, and is the dismal future awaiting many CUNY students under the current system.

US capitalism and the declining need for college-educated labor

Lower state tax revenues due to the Great Recession were a major factor in cuts to higher education. But there is likely another reason why elite interests don’t see spending for higher education to be as vital as it was in the post-World War II years, when the economy was rapidly expanding and there was an explosion of technical, scientific, managerial, teaching and other white collar jobs. Today’s economy is very different.

US economic growth since the Great Recession officially ended in 2009 has been the weakest of any post-war recovery: “With the annual pace of growth in the current recovery averaging 2 percent – well below the trajectory of past expansions – and future projections not looking much better, some prominent economists say the United States has settled into a lengthy period of what they call ‘secular stagnation’.”44 In the “New Economy,” millions of manufacturing and professional jobs have been off- shored and replaced by service industry positions that are low-paid and don’t require a college education. Using Bureau of Labor Statistics data, a recent study reported:

  • 48 percent of projected new jobs in the U.S. are in occupations that do not pay a “living wage,” conservatively defined as at least $15 per hour.
  • Of the top ten occupations with the greatest number of projected job openings, only one has a median wage greater than $15 an hour.45

The Bureau of Labor Statistics publishes projections of job growth in a wide range of occupations. One of its tables lists the thirty occupations projected to have the largest number of job openings from 2012 to 2022. The table includes the typical education required for entry into each of the thirty occupations. The news is not encouraging:

  • Only three of the thirty occupations require a bachelor’s degree for entry.
  • Two-thirds of the thirty occupations with the largest projected employment increase from 2012 to 2022 typically do not require any postsecondary education for entry.
  • Occupations that do not typically require any postsecondary education are projected to add 8.8 million jobs over the decade, accounting for more than half of all new jobs.46

A recent study stressed that there is a growing disconnect between the numbers of college graduates and the economy’s demand for college-educated workers. An increasing number of the nation’s senior college graduates – an astounding 48 percent – are currently working in occupations that do not require a four-year college degree. In fact, 37 percent of them are working in jobs that require a high school diploma or less, while an additional 11 percent work in jobs requiring some post-secondary education but not a bachelor’s degree.47

The likelihood is that the mismatch between educational attainment and job positions will exacerbate in coming years. As the report notes: “The number of college graduates is expected to grow by 19 million over a decade, while the number of jobs requiring a bachelor’s degree is expected to grow by fewer than 7 million.”48

Although New York City officials boast of having a strong economy, a recent study from the NYC Comptroller’s office reported that working “millennials” – residents between the ages of 19 and 30 – were earning 11.3 percent less in 2014 than their counterparts in 2000. 47 percent of working NYC millennials had low-wage jobs in 2014, up from 43 percent in 2000, while the percentage in mid-wage jobs had declined from 24 to 21 percent over the same time. Only 16 percent of 19-to-30-year-olds were in high-wage jobs in 2014, down from 19 percent. The slump in better paying jobs occurred at the same time the percentage of New Yorkers ages 23 to 29 with at least some college credits had increased from 61 percent in 2000 to 72 percent in 2014. Contrary to the rhetoric of politicians, more education doesn’t produce better paying jobs. The study reported the grim news: “About one-third of young New York City workers in low-wage industries have a bachelor’s degree.”49

Elites feel little pressure to increase spending on public higher education when their economy is producing a dwindling percentage of high-paying jobs requiring a college degree. Moreover, they are concerned that a “crisis of expectations” may develop from having too many college graduates unhappy with too few better-paying jobs.

Systemic racism has guaranteed that the growing shortage of jobs requiring a college degree has more adversely affected black college graduates. 56 percent of recent black college graduates are working in jobs that don’t require a college degree. Even in occupations where demand is higher – for instance, jobs in science, technology, engineering and mathematics – recent black college graduates have encountered difficulty: the unemployment rate of young black engineers averaged 10 percent from 2010 to 2012, while 32 percent of those engineering graduates who were working had jobs that didn’t require a college degree.50

The dreams of CUNY students

The disinvestment in CUNY runs directly counter to the aspirations and dreams of CUNY students, who desperately want to avoid a life of low-wage, unfulfilling and often precarious labor. In the past, a CUNY degree has been the path out of those jobs for many, particularly for black and Latino students. It has been a place where millions of students have been introduced to new career possibilities, to new ideas and ways of looking at the world, and which has given them the confidence to do more with their lives. It has helped many over the years to have jobs in medicine, law, education, journalism, engineering and science, and other rewarding fields. At their best, CUNY professors have encouraged students to question the way the world is and dream of making it better. Because of inadequate resources and deficient K-12 education, it has also been a place where many have struggled and failed to graduate.

Opportunities available to CUNY students are shrinking as their family incomes stagnate or fall, as CUNY is being defunded, and as the economy mostly produces jobs that don’t require a college degree or pay a living wage. Graduates of the elite private colleges will have the advantage in the competition for the more rewarding jobs, deepening already deep racial inequality. CUNY students are being sacrificed on the altar of a failed economy, and faculty and staff are collateral damage in the process of disinvestment.

Capital’s reduced need for college-educated labor and therefore its decreased interest in funding public universities is in sharp contradiction with the desire of working-class students for a better future and access to learning that can help in understanding and changing their world. That’s why one of the most popular chants for CUNY students and faculty has been “Education is a right, Fight, Fight, Fight!”

Changing the balance of forces

The struggle of PSC and DC 37 members over salaries, benefits and working conditions, and the related struggle of students over tuition levels and learning conditions, have shown that the balance of forces favors the Governor, his political allies and the big business class behind them. What can be done to improve the balance of forces?

  1. The PSC and other public unions should work together on a “right to strike” campaign, specifically targeting the Taylor Law and its harsh penalties for unions that engage in walkouts. It wouldn’t be the first time. In May 1967, several municipal unions in NYC packed Madison Square Garden to rally against the proposed Taylor Law. The PSC should initiate a member educational campaign to study what millions of public workers – teachers, social workers, transit workers and others — did in the 1960s and 1970s: defy anti-strike laws (the Condon-Wadlin Act and the Taylor law) and walkout to win collective bargaining rights and major improvements in pay and working conditions. As Joe Burns writes in his important book:

During the 1960s and 1970s, millions of public workers, normally law abiding citizens, protested, marched on school board meetings, and defiantly struck to win collective bargaining rights. … Ultimately, perhaps the greatest value of studying the lessons of the public employee upsurge of the 1960s and 1970s is that it shows that winning is possible if people organize and fight back against power and privilege.51

Without a credible threat of job actions, management can remain intransigent, and collective bargaining becomes “collective begging” on the part of unions:

Today, as public employee unions face pressure on multiple fronts, the traditional methods of gaining influence – including lobbying and electing friendly politicians – have become less effective. … with politicians of both parties imposing austerity and attacking public employee bargaining, public employee union leaders can no longer afford to ignore the significance of the right to strike.52

The strike is a vital tool in the battle between capital and labor; without the ability to strike, we will continue to see a greater and greater concentration of wealth at the very top. The PSC could appeal to CUNY students, alumni and working-class New Yorkers to support a campaign for the right to strike as a way of evening the odds in the battle between the 99 percent and the 1 percent over whose needs will be prioritized in coming years.53

The right to strike is an extension of freedoms of association, expression and assembly, and is recognized as such by the UN’s International Labor Organization, which in response to a complaint from the Transit Workers Union, ruled in 2011 that the Taylor Law banning public worker strikes violates international law protecting labor rights.54 In both Canada and France, there are long-standing constitutional guarantees of the right of all workers to strike (although their governments have tried to erode those rights), and eleven US states allow public employee strikes.

A “right to strike campaign” could have petitions, teach-ins, and rallies, as well as make commitment to removing the anti-strike penalties of the Taylor Law a criterion for the endorsement of candidates for the state legislature.

  1. Work closely with activist students fighting against threats to their education – cutbacks and tuition hikes – as well as challenging an economic system that offers a frightening future of precarious jobs without a living wage or decent benefits. Students should be viewed not only as allies but also as a generation that needs to be prepared for the social challenges they’ll face, as capitalism continues to claw back the gains of previous decades of labor struggle. We need to replace the doctrine of individual advancement that permeates academia with one of collective organization and struggle. That by itself would significantly alter the balance of forces and contribute to labor unity, as CUNY students become members of unions and bring their understanding with them.

On the walls of Paris in 1968, rebellious students wrote, “Be realistic, demand the impossible!” Professors and students should unite against plans to fund a contract settlement with more increases in tuition. But why stop there? We can also demand free tuition, free books and Metro passes, and a monthly stipend so that the more than half of CUNY students coming from families with incomes of $30,000 or less can study without having to work long hours. Just as working people have free access to public libraries and parks, so should we have free access to higher education, a social good independent of the manpower needs of business.

Winning these demands will require a tremendous struggle, but the money exists. In New York State, the richest 1 percent of families saw their incomes rise by almost 50 times more than the bottom 99 percent did from 2009 to 2012. Yet this prosperous 1 percent pays a smaller percentage of their income in state and local taxes than do low and middle-income families.55 The problem is not a lack of resources to pay for social needs; the problem is unequal distribution.

The unity of faculty, professional staff, other campus workers and students would be a powerful social force able to stand up to the purveyors of austerity and the rationing of higher education.

  1. Labor unity is necessary to change the balance that favors the big business class when each individual union fights on its own. The March 10 CUNY Rising Alliance rally was only a one-day joint effort by the PSC and the CUNY DC 37 locals. To have this unity be permanent and meaningful, relationships need to be built on campuses. We can begin by having cross-union meetings and social events that allow PSC and DC 37 workers to come to know each other, discuss our common interests and plan joint activities. Some campuses have already done this, with encouraging results. A cross-union campaign to demand the right to strike and remove the anti-strike penalties of the Taylor Law could also help to unify public and private sector workers. Only when labor begins to act cohesively as a class will we have the power to withstand the attacks from our enemies and create an equitable society.
  2. Salary and benefits parity, as well as seniority protection for contingent CUNY faculty should be the most prominent demands of the PSC, not only because it’s morally right but because (a) just as the demand to double the wages of fast-food workers has garnered public support, so would the demand to end intolerable treatment of “professors in poverty” win support from most students and working-class New Yorkers, and (b) it is now clear – as it always should have been – that the current two-tier system has dragged down the salaries and working conditions of full-time professors. The handwriting on the wall is unmistakable: Unless the dismal conditions for adjunct professors are changed, universities will tend toward skeleton staffs of full-time faculty whose salaries, benefits and working conditions will steadily deteriorate.
  3. Protests should be held at the offices of the corporate elites who promote and benefit from the austerity policies of politicians like Andrew Cuomo – billionaires like Leon Litwin or the Koch brothers. A rally in front of the Manhattan offices of Glenwood or REBNY, or the luxury apartments of Charles and David Koch would expose the men behind the curtain and tell everyone the truth: that struggles over contracts and university funding are class battles. The billionaires should no longer be able to hide in the shadows.
  4. PSC members, other unionists and students should consider, “How do we want to live and how do we want others to live?” Is it in a society dominated by a relative handful of wealthy owners? A society plagued by economic crises, by outrageous inequality and deplorable poverty, by millions living in substandard housing, by shameful racial segregation and injustice, by perpetual wars for profits, and by catastrophic climate change? If not, unions like the PSC that are committed to social justice need to initiate discussions of how to move beyond capitalism. We could start with union-sponsored monthly meetings and conferences, with speakers, film-showings and roundtable discussions on capitalism and economic crises, labor exploitation, racial and gender inequality, empire and endless wars, unequal education and diminishing upward mobility, global warming and ecological catastrophe, how to we fight back, and more. Another world is possible, but not unless we begin to organize for it, especially among students, who have the greatest need for that new world.


*Glenn Kissack is a retiree representative on the PSC Executive Council. The views expressed in this essay are entirely his own.

1. “The cost of living in New York has risen by about 23% over the past five years [2009-2014]”, The Economist, May 2, 2015 blog,

2. Vivian Yee, “Cuomo to Continue Shrinking State’s Share of CUNY Costs,” New York Times, January 14, 2016.

3. The budget increase for the CUNY senior colleges was less than 1% – below the rate of inflation. “2016-17 State Enacted Budget,” City University of New York, April 1, 2016.

4. Jon Campbell, “New York budget secrecy spurs critics,” Press & Sun Bulletin, March 31, 2016.

5. The increase in revenue for the senior colleges is a mere 0.9 percent, leading CUNY administrators to announce that budget cuts would be necessary in the 2016–17 school year. “2016-17 State Enacted Budget,” City University of New York, April 1, 2016.

6. Marc Edelman, “When is a ‘raise’ not a raise? The CUNY Faculty Union Deal,” Gotham Gazette, June 29, 2016

7. David W. Chen, “Dreams Stall as CUNY, New York City’s Engine of Mobility, Sputters,” New York Times, May 29, 2016.

8. Bill Mahoney, “Hedge Funds and real estate dominate Cuomo donor list,” Politico New York, January 19, 2016

9.Kim Moody, From Welfare State to Real Estate (New York: New Press, 2007), 24.

10. Katia Savchuk, “New York Is the City with the Most Billionaires, Not Beijing,” Forbes, March 1, 2016.

11. For an excellent introduction to why government is generally biased towards business and hostile to labor, see the March 27, 2007 “Capitalism and the State” lecture by Vivek Chibber at the Brecht Forum in NYC:

12. There were 11,727 part-time members of the faculty in 2014, compared to 7,698 full-time faculty (Staff Facts, Fall 2014, Office of Human Resources Management, CUNY). Many of the part-time professors receive as little as $3000 per course, prompting calls for a $7000 minimum per three-credit course. See the statement by the Doctoral Student Council:

13. Wayne Barrett, “Andrew Cuomo’s $2 Million Man,” Village Voice, August 29, 2006; David M. Halbfinger, “Bond With Past Foe Is Fodder for Attack on Cuomo,” New York Times, October 14, 2010.

14. Jonathan Camhi, “Critics Attack Influence of the Committee to Save New York,” Gotham Gazette, May 3, 2012.

15. Chris Good, “David Koch and Wife Gave Gov. Andrew Cuomo $87K,” The Atlantic, March 31, 2011.

16. Seymour P. Lachman, Three Men in a Room: The Inside Story of Power and Betrayal in an American Statehouse (New York: New Press, 2006), 24.

17. Daniel Geiger, “Cuomo’s Biggest Donor Is Also the Oldest,” Crain’s New York, November 3, 2014,

18. Greg B. Smith,”NYC buildings show connection between Albany corruption and real estate industry, with developers saving millions on taxes,” New York Daily News, May 9, 2015.


20. Cuomo 2014,

21. EF didn’t concede without a fight, holding rallies throughout the state in which members chanted, “Cuomo doesn’t care, unless you’re a millionaire.” Ari Paul and Peter Hogness, “NY State Workers Held ‘Hostage’: Gov’s Threats Win Concessions,” Clarion, August 2011.

22. Peter Hogness, “SUNY Union Agrees to 5-Year Deal with No Raises for First Three Years,” Clarion, March 2013.

23. Thomas Kaplan and John Eligon, “New York Lawmakers Vote to Limit Public Pensions,” New York Times, March 14, 2012.

24. Peter Hogness, “Harsh New Pension Law Approved: Tier 6 Slams Future CUNY Employees,” Clarion, April 2012.

25. Jimmy Vielkind, “On wage hike, business leaders give Cuomo benefit of the doubt,” Politico New York, September 18, 2015.

26. Joseph Spector, “Power in money: How big bucks fuel policy in N.Y.,” Democrat & Chronicle, March 22, 2015; Liz Benjamin, “A guide to what the big Cuomo donors want in 2015,” Politico New York, December 8, 2014.

27. “#Hedgepaper No. 4: How Hedge Funds Purchased Albany’s Lawmakers,” Hedge Clippers, March 4, 2015,

28. Matthew J. Brouillette, “At Last, Scrutiny for Public-Union Deals,” Wall Street Journal, May 21, 2105.

29. Tim Reed, “Educators fight back against pension attacks across the country,” Education Votes, February 27, 2014,

30. Tammy Gamerman, David Friedfel, and Jamison Dague, “Report Card: New York State Executive Budget, Fiscal Year 2016-2017,” Citizens Budget Commission, January 21, 2016.

31. Eric Orden, “Cuomo Turns to Wall Street for Top Aide,” Wall Street Journal, January 11, 2015; Louis Flores, “With new secretary pick in William Mulrow, Gov. Cuomo deepens ties to Wall Street,” Progress Queens, January 12, 2015

32. Jonathan Alter, “Schwarzman: ‘It’s a war’ between Obama, Wall St.,” Newsweek, August 15, 2010

33. Nelson D. Schwartz, “Economists Take Aim at Wealth Inequality,” New York Times, January 3, 2016.

34. Martin Gilens and Benjamin I. Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” Perspectives on Politics, vol. 12, no. 3 (September 2014),

35. Richard M. Miller, Analyzing Marx: Morality, Power and History (Princeton, NJ: Princeton University Press, 1984), 107.

36. Peter Coy, “The Richest Rich Are in a Class by Themselves,” Bloomberg Business, April 3, 2014.

37. Jesse McKinley, “Cuomo Strikes Deal to Keep Alcoa Plant and 600 Jobs Upstate,” New York Times, November 25, 2015.

38. “Keep the Promise of CUNY, Invest in Opportunity for All,” Professional Staff Congress, Spring 2015, 4.

39. Testimony of NYC Comptroller Scott M. Stringer before the State Legislative Committee on the State Budget for Local Government, January 26, 2016,

40. “Keep the Promise of CUNY, Invest in Opportunity for All, ” PSC, Spring 2015.

41. Michael Mitchell, Michael Leachman, and Kathleen Masterson, “State Cuts to Higher Education Threaten Quality and Affordability at Public Colleges,” Center on Budget and Policy Priorities, May 26, 2016.

42. For an excellent presentation about contingent labor, see the documentary “Con Job: Stories of Adjunct & Contingent Labor,“ whose opening sentence is, “If anyone wants to know what late capitalism in the 21st century looks like, go to the university and you’ll see it, it’s there.”

43. Neil Irwin, “Job Growth in Past Decade Was in Temp and Contract,” New York Times, March 31, 2016.

44. Nelson D. Schwartz, “U.S. Growth and Employment Data Tell Different Stories,” New York Times, January 18, 2016.

45. Ben Henry and Allyson Fredericksen, “Low Wage Nation,” Alliance for a Just Society, January 2015,

46. Table 8. Occupations with the largest number of job openings due to growth and replacement needs, 2012 and projected 2022,” Economic News Release, Bureau of Labor Statistics,

47. Richard Vedder, Christopher Denhart, and Jonathan Robe, “Why Are Recent College Graduates Underemployed,” Center for College Affordability and Productivity, Jan. 2013 (, 12.

48. Ibid, 21.

49. “New York City’s Millennials in Recession and Recovery,” Office of the New York City Comptroller Scott M. Stringer, Bureau of Budget, April 2016.

50. Patricia Cohen, “For Recent Black College Graduates, a Tougher Road to Employment,” New York Times, December 25, 2014.

51. Joe Burns, Strike Back: Using the Militant Tactics of Labor’s Past to Reignite Public Sector Unionism Today, (New York: IG Publishing, 2014), 10, 184.

52. Ibid., 14, 99.

53. Kate Montgomery Swearengen, “Tailoring the Taylor Law: Restoring a Balance of Power to Bargaining,” Columbia Journal of Law and Social Problems, Vol. 44 issue 4 (Summer 2011).

54. “ILO Finds New York Strike Ban Violates Workers’ Human Rights,” Transit Workers Union, AFL-CIO, November 16, 2011.

55. Fiscal Policy Institute, “New York’s Top 1% See All Income Gains Since Recession,” January 26, 2015,’s-top-1-see-all-income-gains-since-recession

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