From Operational Excellence to benefits decentralization: On UCB’s latest austerity plan

While the exposure of Operational Excellence as nothing but a set of dressed up austerity measures is now well under way, less attention has been given to the so-called benefits decentralization plan, or as we like to call it, cuts to graduate student instructor (GSI) positions and benefits.  When Graduate Division Dean Andrew Szeri dismissed the notion that benefits decentralization in and of itself constitutes a set of cuts during Friday’s negotiations, he was absolutely right.  This program is instead tantamount to the necessary preconditions for such cuts.  In other words, it lays the groundwork — the organizational imperatives really — for elimination of GSI positions, and it creates a structural antagonism between GSIs and departmental staff members.

In essence, devolving a fixed amount of GSI funding onto individual departments makes these departments responsible for covering health care costs of GSIs.  As these costs inevitably inflate over the next few years but the pot of money provided to departments remains constant, departments will be forced to either eliminate GSI positions or lay off departmental staff (since this money all goes into an undifferentiated departmental pool).  Of course the administration denies any necessary relationship between these preconditions and actual cuts, let alone intentions of making such cuts, but this is a load of hooey.  See for example the following excerpt from the Benefits Decentralization Plan:

The effort will be cost neutral to departments for this fiscal year (2010-11). However, there may be years when the campus will be unable to provide adequate benefits increments. Departments may be called upon to self-fund such increases, just as they do with salaries on non-central fund sources, however it is not the intention that this will be the normal practice for the campus.

And similarly:

There is no guarantee that the campus awill have enough money to pay for benefits on an on-going basis, just as it has no guarantee that there will be enough money to pay for any on-going need. However, decentralizing benefits will create incentives to control costs at the departmental level where workforce decisions are being made, possibly generating savings that will help units. The goal of this effort is to be cost neutral to departments for this first fiscal year. However, there may be years when units have unforeseen benefits costs or the campus will be unable to provide adequate benefits upgrading funds and units will need to self-fund such increases. Units should keep in mind this possibility when managing resources over the long term and maintain a sufficient reserve to address local spikes and abnormalities. Units without existing reserves may wish to use a portion of the 3% benefits supplement to help establish such an account.

To download the entire plan as a PDF file, click the first page of the report below:

Also of interest is the cover letter Chancellor Birgeneau attached to the plan, available below:

The final few lines appear to be of special importance, though we remain uncertain precisely how this change would save money:

Of note, I have already asked the Budget and Resource Planning Office to investigate our moving to a fringe benefits rate model so that departmental benefits costs will be a set percentage of total salary rather than a function of individual employee benefits costs.  When implemented, it will eliminate several concerns that were raised by campus units about the existing benefits funding model.

It appears that this shift will serve as a sort of loophole, a way around the illegality of discriminating against employees with large families.  Note for example the following excerpt from the plan’s FAQ, available in full if you download the plan above:

Won’t decentralization of benefits cause departments to discriminate against employees with large families?It is against the law to discriminate against employees in this manner, and the types of job interview questions that might elicit such information are strictly prohibited. On the Berkeley campus over half of our employees are already paid on distributed non-central fund sources, which are and have been managed by campus departments. There is no evidence of such discrimination for those non-centrally-funded employees, and we would not expect this to change with the distribution of central funds. However, the campus intends to move to a fringe benefit rate model, where the departmental cost of employee benefits are a percentage of salary, and would not vary by individual employee. Such a benefits model will substantially lessen this concern. The campus may be able to move to such a model as early as fiscal year 2012-13.

Again, we’re uncertain precisely what this means or entails, but it seems to be a key source of cost-savings, or to phrase it differently, of cuts to employee benefits.

We will not stand for yet another austerity measure being forced upon us. To add insult to injury, this benefits cut was covertly implemented with little notice until it was already policy.  Our comrades in AWDU and UAW 2865 are organizing a teach-in on so-called “benefits decentralization” from 12:30-1:30 this Tuesday, April 12, at the picnic tables in front of Anthony Hall.  For more details, see the UAW flyer below:


One response to “From Operational Excellence to benefits decentralization: On UCB’s latest austerity plan

  1. Pingback: Tuesday 4/12: Teach-in on so-called “benefits decentralization” | THOSE WHO USE IT

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