The Association of Pennsylvania State College and University Faculties (APSCUF) and State System negotiators met today, Thursday, May 14, 2015 at the Dixon University Center in Harrisburg. The two sides discussed retrenchment and a specific provision of the Affordable Care Act. The two sides will continue negotiations on June 12, 2015 at the APSCUF office in Harrisburg.
Thank you to all of you who took action yesterday on Senate Bill 1 by contacting your senators. After APSCUF issued the alert, Senate leadership contacted us with word that there is a single line in the 400-page bill that does allow for the continuation of alternative retirement plans (ARPs), e.g., TIAA-CREF. We appreciate Senator Corman’s office clarifying the appropriate provisions, and we apologize for our misunderstanding. Given the quick movement of this bill, we used the best sources and the best reading of the provision that we could given the short time frame and seriousness of the issue. If you communicated about the ARPs to your senator, you may wish to note our corrected understanding of these provisions.
With the exception of the information about the ARPs, all other information in yesterday’s alert are correct. That is:
- Those enrolled in SERS or PSERS would be required to move to the new plan with the new contribution rate. Further, only your highest 5 years (it is currently 3) would be used to calculate your pension;
- Liability for past employees would have to be covered by the State System instead of the pension system. Presumably, that money would be paid from the Education & General budget, which would put additional programs and positions at risk.
In addition to these facts, it also appears that members enrolled in SERS or PSERS will have a choice: either pay more for your existing benefits, or pay the same amount with a reduction in benefits. Please continue to contact your senators to let them know that this change to SERS and PSERS is not acceptable. The fact that we were approached demonstrates that your senators listen when you write. The bill is expected to be voted on as early as tomorrow.
Earlier today, Dr. Brendan Finucane, APSCUF member and economics professor at Shippensburg University, submitted testimony to the Senate Labor & Industry Committee for a public hearing about raising the minimum wage. His testimony follows below. To download Dr. Finucane's testimony with footnotes, please click here.
Written Testimony Submitted to the Senate Labor and Industry Committee
Public Hearing to Consider the Impacts of Raising the Minimum Wage
Dr. Brendan P. Finucane, Professor of Economics, Shippensburg University
I would like to thank the Senate Committee on Labor and Industry for the opportunity to provide written testimony on the positive impacts raising the minimum wage will have on individuals and the Commonwealth. As a Professor of Economics at Shippensburg University, I commend the leadership of Senator Tartaglione on this important social and economic issue, as well as that of Representative Kim in the House. Their respective bills, Senate Bill 195 and House Bill 250, will help Pennsylvania move toward sound economic policies by supporting working families and individuals, and increasing the long-term economic vibrancy of the Commonwealth.
The purchasing power of the lower and middle class has been on the decline for decades. Since 1938 when the Fair Labor Standards Act established the minimum wage, nominal wage increases have occurred sporadically rather than at a steady and predictable pace. Not indexed to inflation, research compiled both nationally and state-wide demonstrates that minimum wage increases have failed to keep up with consumer prices. In fact, in 2015 minimum wage earners have less than 60% of the purchasing power that they had in 1968 . Among the most encouraging elements of House Bill 250 and Senate Bill 195, is the provision to incorporate an annual cost of living increase into minimum wage legislation. This will create purchasing power stability among low wage earners and will break a 50 year trend of wage devaluation.
Across the nation, many full-time minimum wage workers have been unable to rise above the federal poverty line ; this is no different for minimum-wage earners in Pennsylvania. Poorly remunerated work results in a smaller tax base to help fund state services and simultaneously increases the demand for state and federally-funded social programs required to help low-income individuals to meet their basic needs. Increasing the minimum wage will increase the tax base and help more residents to become financially independent and reduce expenditure on social programs.
Minimum wage earners should be seen a crucial part of creating sustainable economic growth within the Commonwealth. As immediate spenders, putting money in the pockets of low-wage earners will stimulate local markets by increasing the demand for goods and services. Consumer spending has long been a determinant in forecasting job growth rates; as such, raising the wage holds promising opportunities for job creation.
In Pennsylvania, we are fortunate to be in a position to evaluate the experiences of other states who have already raised their minimum wage above the federally mandated minimum of $7.25. Contrary to long held assumptions that wage increases cause employers to relocate, job creation has been shown to increase in states where wages have gone up. Economic history also provides ample examples of the importance of workers as consumers of the same services and goods that their labor produces. If they are to consume such products, they must be able to afford them. It was this very logic that propelled Henry Ford’s company to the forefront of the American auto industry.
Beyond the economic arguments in support of raising the minimum wage, the current debate is also personal, particularly for those of us living in rural areas and those who care about accessible higher education. Although the total number of individuals impacted by a wage increase will be highest in urban counties, the proportional impact of raising the minimum wage will affect a larger share of the workforce in rural communities . This will directly affect the students and families of students that we teach in Pennsylvania’s public university system. At Shippensburg University, over 32% of our students come from rural counties; when looking at university attendance of all schools in the Pennsylvania State System of Higher Education (PASSHE) that figure rises to nearly 35% of our student body . It is PASSHE’s mission to provide affordable higher education opportunities in the Commonwealth. Raising the minimum wage is an important part to ensuring that our working students can continue to afford tuition and other enrollment costs. To the extent that workers who benefit will be adults, an increase in the minimum wage will help support the families of students in the PASSHE system.
Ultimately education is the major determinant for individuals seeking to move up the economic ladder. House Bill 250 and Senate Bill 195 provide crucial provisions to better the quality of life for minimum wage earners; improved educational opportunities that will become affordable as a result will help propel individuals into better paid industries.
I encourage the Senate Committee on Labor and Industry to support House Bill 250 and Senate Bill 195, and any other efforts to raise the minimum wage to at least $10.10 per hour, indexed to inflation. These bills represent an important stepping stone moving toward a living wage for all people employed in the Commonwealth. Thank you for your consideration.
Last week, California University of Pennsylvania (Cal U) issued a statement announcing that six assistant coach contracts would not be renewed. Keith White, Coach Executive Leader for APSCUF, is issuing the following response:
“I am distressed and disappointed with President Jones’s and the California University leadership’s decision to non-renew six assistant coaches. While I am fully aware of the limits of financial resources on all State System schools, it is still quite a shock to have the heart of an athletic program hit so hard and with such little discussion or warning.
“Assistant coaches play an integral part in the lives of our student athletes and the athletic department. They are mentors, recruiters, fundraisers, and they steer the students to degree completion. For those students who participate in women’s soccer, men’s soccer, baseball, football, softball, and volleyball programs, this is not simply a ‘workforce adjustment.’ It changes their lives.
“It is hard to see how, exactly, this is a wise decision on the long-term health of the university, and it is difficult to see why this decision could be done so rashly and without university-wide discussion.
“Student recruitment and retention should must be a top priority at Cal U. Removing six talented individuals who make such an impact in the lives of Cal U students is shortsighted and alarming. We all need to take a hard look at how the university prioritizes its expenditures to make sure that they maximize our students’ learning experiences.”
Yesterday, the Auditor General released findings related to the Pennsylvania State System of Higher Education (PASSHE) in a performance audit. Dr. Kenneth M. Mash, APSCUF President, is issuing the following response:
“During yesterday’s press conference, Auditor General DePasquale began by stating that the Commonwealth contributes only 28% of the cost for a student to attend a public university in Pennsylvania. The Commonwealth currently funds the state system at the same level it did in 1997-98.
“The Auditor General is absolutely correct that the State System needs the Governor and the General Assembly to allocate additional funds to stem the tide of rising tuition and overwhelming student debt. Governor Wolf’s budget is a step in the right direction. His two-year plan to fully restore funding to the State System correctly prioritizes public higher education and works to secure the future of Pennsylvania’s working families.
“In 2011, Governor Corbett cut the State System budget by 18 percent or $90 million dollars. Since then, with no additional funding, the State System has eliminated 270 full-time faculty positions and discontinued over 150 academic programs. Because the budget could not be balanced on cuts alone, the Board of Governors raised tuition in an effort to survive the drastic cut.
“A recent economic impact study concluded that for every $1 spent on the State System, $11 returns to the Commonwealth. Over 90 percent of our students are residents of the Commonwealth, and 80 percent of our graduates remain in Pennsylvania and contribute to its economy. All Pennsylvanians benefit when we properly invest in our state-owned universities.
“Our professors and coaches hope that the General Assembly will work with Governor Wolf to ensure a strong path to full restoration so that our current and future students will have access to high-quality public higher education at an affordable cost.”
Good morning, Chairman Pichini, Chancellor Brogan, Governors, University Presidents, and guests. My name is Kenneth Mash, and I am the President of the Association of Pennsylvania State College and University Faculties. APSCUF represents the approximately 6,000 faculty and coaches employed at our 14 great public universities.
I want to emphasize the word “public” again. The universities that comprise this System are public universities. It has gotten harder and harder to remember that. As Secretary Hanger pointed out yesterday, over the course of the last two administrations our universities have struggled with declining resources.
When this system was founded, the Commonwealth paid for 2/3 of the cost of student’s education. Today students foot 75% of the cost. After attending our public institutions, the average student graduates with $30,000 in debt. That number would have been unthinkable to the bipartisan forces that founded this system.
Of course, over the last 4 years the financial state of the majority of our universities has gotten progressively worse. Under the previous administration we had an 18% cut followed by three years of no increases.
Even as 42 states increased funding for public higher education, ours did not. Pennsylvania now ranks 49th in funding for public higher education.
Since the 2011 cut, resident undergraduate tuition has jumped 17% or over $1,000 per year and average fees have increased by 18%. This Board has approved several tuition pilot programs that could increase tuition for students 25%. How much would that be a threat to the very notion of public higher education?
Just last year, similar to patterns from the years before, the State System faced a $58 million deficit due to years of cuts. Approximately $30 million was filled with another 3% tuition increase. A $28 million hole was left unfilled by this Board.
The remaining deficit was closed by continued cuts on campus. These cuts have already placed 77 programs in moratorium including key programs, like music. It also led to major reductions in faculty and major reductions to staff.
Last year, in the face of the $28 million gap, the Board sent the university presidents on their way thanking them in advance for the hard decisions they were forced to make. There was little if any discussion about the implications of those cuts. There was no talk of needing to raise tuition further to bridge the gap.
After the previous governor announced in 2012 that he wouldn’t cut the budget further, our then Chancellor stood at a press conference with the Governor, and thanked him for that. Instructions were given by the administration to keep tuition capped at the rate of inflation.
The Board complied, and there were no public recriminations. There was no great debate about the needs of the students and the universities. There certainly was no great concern voiced about how the Board could possibly meet any salary “demands” my association might make at the negotiations table.
Last week, April 3rd marked the first night of Passover. It is tradition at the Seder – the Passover dinner ritual – for the youngest in the room to as the 4 questions – which I recited many times. The first of those questions is “Why is this night different from all other nights?”
I am certainly no longer the youngest in the room. But after the watching the committee meetings yesterday, as the sun set, I was and I am still motivated to ask, why was yesterday afternoon so different from other afternoons over the last 4 years.
The only difference I can see is that we now have a governor who genuinely wants to restore public higher education. Over two years, he has proposed fully restoring the $90 million cut. He wants no tuition increases because he foresees the Commonwealth working to meet its obligation to public higher education. It would make for a tough year, but it also makes it a lot less tough than the preceding four years.
Thank you Governor Wolf for that, and thank you Secretary Hanger for delivering that message. Thank you Representative Hannah for making the motion to try to bring that about.
I do not know what action the Board will take today or what will be discussed, but after yesterday I am still wondering, why was last night different from all other nights?