Tuesday, November 25, 2014

Education and Hope

The following is by David Orr from a ‘Foreword’ in a new book by David Hicks, Educating for Hope in Troubled Times: Climate Change and the Transition to a Post-carbon Future (London: Institute of Education Press, 2014)

     Education is an essential function of civilization. Its essence is simple: to equip the young for the many tasks of preserving and advancing the hard-won gains of humankind in the arts, sciences, and humanities. To the extent that any generation succeeds in this aim, then the next is better able to meet its own needs and anchor itself in some larger mythos and system of values.

     Beneath this simple description, however, is endless complexity and controversy. Who is qualified to teach? What should the young be taught? How should they learn? Should they be taught critical thinking or obedience to authority? What is the proper role of classroom learning relative to experiential learning? Should education be aimed for specific skills or breadth? What is the relationship between facts and values, or between information and wisdom? How do various disciplines relate to each other, or do they relate at all? Is education a proper public goal or should it be left to families and civic organizations? Is there a common core of factual knowledge? What does it mean to teach young people to think, or to think about the act of thinking? Is smartness overrated relative, say, to qualities of compassion, sociability, character and manual competence? And so we could go on.

Orr raises here the fundamental questions all of us involved in the education enterprise should be wrestling with as individuals and as members of institutions proclaiming to share the mission of education. He goes on to briefly note the stiff challenges facing us and the necessity of hope, not to be confused with optimism, that is required for education to meet the basic aim he begins with above.

Hicks, offers some answers to Orr’s questions, while using his 30+ years of immersion in educating for a better world to offer how this might be done. While aimed at primarily K-12 educators, much of Hick’s suggestions are, and should be, useful to all of us as we try to learn our way forward.

May you each find a bounty of reasons to feel Thankful this week. Please share as you see fit…

Monday, November 24, 2014

Fossil Fuels, Investments, and the Public Good

Perhaps the most significant consequence of neoliberalism’s capture of public higher education is its reduction of everything to finance and money. And much of that narrowed focus is on relatively short-term returns. This narrowing of purpose and emphasis has affected many of the functions of universities. One of the more obvious is in the category of investments.

Most universities have a growing pool of money called an endowment from which they take the interest earned to support programs of the institution. This is a good thing. But if an investor seeks only the highest possible short-term return on the investment without examining what those invested dollars are supporting in the world, they might well be undermining the society, the environment, or some other concern central to the mission of the institution.

Unfortunately, most public universities have been turning a blind eye to these investments other than to scrutinize the quarterly or annual financial report. Recently many institutional investors have come to recognize that aligning their investments with their mission can not only maintain their financial bottom line but also simultaneously support their mission to build a better world. This movement began earnestly during the Vietnam War when religious organizations wanted to make sure they were not profiting from firms manufacturing weapons. Following that we saw a global response to the harm of apartheid, with many investors divesting of stocks of firms profiting from business in South Africa. Michigan State University was the first public university to divest its holdings from firms profiting in South Africa.

In early 2005, then-UN Secretary General Kofi Annan invited a group of the world’s largest institutional investors to join a process to develop the Principles for Responsible Investment. A 20-person Investor Group drawn from institutions in 12 countries was supported by a 70-person group of experts from the investment industry, intergovernmental organizations and civil society. The Principles were launched in April 2006 at the New York Stock Exchange. To date, there are more than 1,400 institutional signatories with more than $40 trillion in assets under management. Sadly, the higher education sector is almost entirely absent.

Investments and Climate Change

There is a growing global consensus that climate change is becoming the human family’s most significant challenge, coupled with poverty and income inequality. The scientific community (International Panel on Climate Change, National Academy of Sciences, Royal Academy of Sciences, etc.) is overwhelmingly convinced that the threat is man-made and that the burning of fossil fuels is a prime cause. You might think, given this consensus, that institutions would not only be looking to reduce their own carbon footprint but also choosing to avoid profiting from an activity that is deemed detrimental to the human family. That logic is behind the recent and growing movement for divestment from fossil fuel companies. But this logic has been all but lost on those who look at investments as simply building their financial wealth. More recently the concern with fossil fuel stocks as being largely based on assets that might be stranded (unsellable) because of their harm is causing even those who look at investments through the narrow lens of financial profit to jettison some of their fossil fuel holdings. 

While I support divestment from fossil fuels for those very reasons, what is needed in higher education is not simply the phased divestment from this perilous industry but a transformation of how we think about investments and how we align our missions to those investment choices. Principles for Responsible Investment are a good starting place for all institutional investors. The six principles are quite basic:

     Principle 1: We will incorporate ESG [environmental, social, governance] issues into investment analysis and decision-making processes.

     Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.

     Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.

     Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.

     Principle 5: We will work together to enhance our effectiveness in implementing the Principles.

     Principle 6: We will each report on our activities and progress towards implementing the Principles.

The red herring often thrown out to the gullible and uninformed is that investing with mission or social and environmental concerns will only decrease financial returns. Often coupled with this myth is the claim that fiduciary requirement by law requires seeking only the highest financial return. These claims have frequently been revealed to be empty of facts.  Most recently, studies looking at the impact on financial return of divesting from fossil fuel stocks, for example, identify essentially no difference in risk of returns. In fact, S. Prakash Sethi, professor of finance at CUNY, makes the case that Investing in Socially Responsible Companies is a Must for Public Pension Funds – Because There is No Better Alternative.” 

As Pax World Fund’s President and CEO, Joe Keefe, noted recently,

The flimsy rebuttal we sometimes hear, that an endowment's fiduciary duty means that its only obligation is to maximize return, regardless of the consequences or externalities, is utter nonsense. There is now a substantial body of research underscoring that companies with better environmental performance also tend to enjoy better financial performance. It is ignoring these issues, rather than integrating them, which most likely constitutes a breach of fiduciary duty [emphasis added].

Reinvesting for Our Common Future

Good investment practices should not simply be limited to avoiding perilous investments (like fossil fuels) but should include positive choices. For a public university like Michigan State University, which has been built up over more than 150 years largely by the people of the state of Michigan, one should expect that enterprises and communities that are based here, that provide quality products, services and livelihoods and are good neighbors in our communities, should receive a sizable portion of such investments. This is made all the more important given that 76 percent of our students are from Michigan families whose tax support helps make all the university does possible. Investments in those communities make them stronger and more prosperous and strengthens the tax base that supports much that we count as the public good, including schools, libraries, museums, infrastructure, etc. Public state universities should commit to a minimum percentage of this endowment going towards state and local investments that help sustain the communities they are reliant on for their students and tax support.

Public universities could therefore, at a minimum, endorse and follow the Principles of Responsible Investment. They could establish a committee representing the faculty, staff, and students that oversees the investments and insures they align with the mission of the institution. This would include making recommendations on how the university, as a shareholder, should vote on shareholder resolutions. The current practice nearly always defaults uncritically to supporting the management position on these resolutions. Given the incredible increases in CEO salaries, golden parachutes, and other management acts of self aggrandizement that have become so prevalent, the management of the firms we invest in should not receive our uncritical support. We have a responsibility as shareholders to see that our dollars are being used appropriately and in accordance with our mission.

A bit different approach is using some of the endowment money to create a "Green Revolving Fund" which could be used to invest in campus energy conservation, efficiency, and renewable energy projects where the return on investment (ROI), often in saved dollars, aligns well with financial investments. The savings are then plugged back into the fund to re-invest in more energy saving, carbon reducing projects. The recent cost decreases in photovoltaics (PV) can now see ROI's of 10-15 percent per year. Those are only the financial benefits. When coupled with the benefits of carbon reduction on the environment, and potential increase in local jobs, the triple bottom line makes these kinds of investments even more attractive

In Democratic Imperatives: Innovations in Rights, Participation, and Economic Citizenship, a 2011 task force report from the American Political Science Association that looked at strengthening democratic practices, one of the key recommendations was the implementation of participatory budgeting. I believe there is an adaptive possibility of that public budgeting process to shape the investment direction for a public entity like MSU. Just today I received an email from a colleague in California announcing that several of the recommendations I have offered in this brief paper have been agreed to by the University of California system, which has an endowment of more than $90 billion. Those recommendations came from a task force created by the president that was representative of the university community. That email also included the announcement of two new sustainability investor positions with the University of California to ensure the recommendations are put effectively into place!

We can only hope that MSU and other universities will soon establish a broadly represented task force like the University of California did this year to develop their own response to climate change, sustainability and investments. Time is a-wasting.

Sunday, November 16, 2014

Confronting Higher Education's Neglected Costs; Part I

Part I: Options for Addressing Increasing Inequality Through Wage Policies

Since the Occupy Movement shined the light on our society’s increasing income inequality, the reports of the growing concentration of wealth are now common. As a result we see renewed fervor to increase the minimum wage and slightly more discussion of a ‘living wage’.  There has been somewhat more media attention paid to corporate tax ”avoiders” and particularly to the astronomical rise in CEO salaries, perks, and golden parachutes.

Within the higher education sector, less attention has been paid to inequality generally and to the wage differentials between those at the top and those at the bottom on campuses. Harvard students received some notoriety a few years back in their efforts to increase wages for their janitorial staff. On the other end of the scale there is a popular map of the United States that shows that the highest paid public employee in 40 of the 50 states is a university football or basketball coach.

We can be pretty confident in each of those 40 cases that the argument made to support those high salaries was that the market demands it. I’ve heard those words of supposed justification from more than one university administrator in recent years. Perhaps they might use the same argument in supporting less than living wages for low-skilled positions. When contracts come up for those lucky enough to have a union to negotiate for fair compensation, the typical mantra is, “We can’t afford to pay higher wages.” Do you ever hear that argument used when hiring a new football or basketball coach or university administrator or endowed faculty position? Those who believe in the hegemony of the market in all things (note the increasing percentage of higher education presidents from the corporate sector over the last couple of decades) have neglected any balancing notion like, for instance, the ideals of the ‘the public good’. The tendency to ignore all costs, including increasing student debt, when offering the high paid salaries is demonstrated by the silence of the trustees who condone them.

This short paper offers a look at other strategies for setting compensation that are simultaneously fair, ensure living wages for all, and yet allow for some differentiation based upon special skills, abilities and responsibilities. If the reader is looking for a silver bullet you will not find one here. Instead, a range of possibilities is offered as a launching point for serious consideration of what compensation parameters might be used within public higher education and, hopefully, other sectors.

Maximum wage - The maximum wage idea has been around for generations. Often it is tied to some specific position, e.g., no one should make more than, say, the President of the United States (currently $400,000). This assumes that POTUS is the most important and difficult job in our country, so what job would be worthy of more compensation? One could make a case that since public universities are typically chartered by the state, the maximum salary should be determined by the salary paid to the governor of that state. The current highest governor’s salary in the US is $187,256 (PA). Of course, we could tie salaries to some other benchmark, but again, since we’re talking public institutions, we assume that there should be some constraint on the upper end of salaries. Girding that perspective is an understanding  that there are other non-monetary benefits to working on behalf of the public good – e.g., status, good will, prestige --  that compensate for receiving less than the ‘market’ might urge in the private sector for similar work and abilities. We don’t expect people who go into the public sector to grow wealthy from it.

Wage Ratios - Another set of approaches for taming the accelerating growth of public university high-end salaries revolves around wage ratios. An early example of a wage ratio was the decision by ice cream entrepreneurs Ben and Jerry to have a maximum 8:1 ratio at their company. This meant that the highest paid (the owners in this case) could not make more than eight times the lowest paid full-time employee. If they wanted to make more, they had to bring up the bottom wages at the same rate. I have seen ratios as low as 3:1 at small firms/organizations, and we know of CEO ratios that have gone as high as 1,138:1 (Comcast). Overall the ratios have been growing in our society as reflected in the growing income/wealth of the 1% and decline or stagnation in the wages/income for those in middle and lower socioeconomic classes.

There are many ways to make the wage ratio more equitable. Here are a couple of ways to think about it. One approach would be to set a floor at the current lowest wage of the organization. For example, at Michigan State University the lowest paid full-time employee is a beginning cafeteria worker who earns about $23,000 annually. Using an arbitrary 15:1 ratio that I offered during my recent campaign for MSU Trustee would mean the highest paid employee could make a maximum of $345,000 a year. There are more than a handful at the university above that threshold currently.  Another possibility would be to tie it to a ‘living wage’. A living wage is an approximate income needed to meet a family’s basic needs and provide a sense of minimal economic security. If the institution wanted to pay someone more than that they would have to bring up the floor to maintain a 15:1 ratio. But who is to say it should be 15:1? How about 10:1 (under the MSU current environment this would be a $230,000 salary), or 20:1, which would leave the highest paid MSU employee scraping by at $460,000?

A slightly different perspective would be to apply the ratio to some outside standard. An example of this might be to tie the ratio to the U.S. median household income. This is the level of income where 50% of the households in the country earn more and 50% earn less. Remember, this is a household income, not simply an individual income. The current median household income is approximately $50,000 (where it has hovered for several years). So applying our original 15:1 scenario would cap annual salary at $750,000. One can of course choose another benchmark, say, US poverty level ($11,670 for an individual, $23,850 for a family of four). For a little more on wage ratios see this piece I wrote in December 2012.

Other possibilities - Yet another approach we could consider is one like this. The typical worker has an approximate 50-year work-life. Is it fair for someone to make more in a year than another makes in a lifetime? If not, then a ratio of less than 50:1 would be called for. So if we based this on the federal poverty level of $11,670, the maximum for an individual would be less than $583,500 a year. If we applied this strategy to the household median income, the maximum would be less than $2,500,000 a year.  We can debate the ratio to use as well as what we might benchmark it to – lowest paid employee, federal poverty level, median household income, etc.  The far more important issue is a serious discussion of reasonable limits at the top and an appropriate floor at the bottom if we’re going to stem growing inequality [this doesn’t even address sources of additional income – e.g. interest from investments, inheritance, etc. – available most frequently to those already well off].

Robely George, author of a thoughtful analysis of these issues in his Socioeconomic Democracy – An Advanced Socioeconomic System, offers an interesting take on how to draw the lines for the bottom and the top – democratically. George, who actually focuses on Maximum Allowable Wealth (MAW) as opposed to maximum annual income and Universal Guaranteed Income (UGI) instead of minimum wage, suggests that voters should decide where to regularly set the limits using a version of instant voter runoff. George’s analysis offers much food for thought and a guide to the pertinent research, especially for any who have not reflected much on issues of basic income (equivalent to George’s UGI), wealth maximization, and income inequality.

Other forms of compensation - One concern with limiting this discussion simply to income in monetary units is to ignore other forms of compensation and their value to the individual and/or their cost to society. When we think about compensation in higher education beyond basic salary, there are benefits like retirement and health care contributions, travel allowances, extra research stipends, sometimes vehicle use, and occasionally even housing. While these all have monetary value that can be measured, there are additional important social benefits of working at a university that aren’t taken into account, including access to athletic facilities, performing arts and lectures, extensive libraries, and frequently subsidized or free education for oneself or family members. But perhaps the greatest compensation is working in an environment where learning is celebrated and encouraged.

In Maslow’s pyramid of self-actualization, once we have covered our biological/physiological and physical security needs, we are freed up to pursue higher levels of self-actualization – including belongingness, self-esteem, and personal development.

Those who are privileged to seek  The pursuit of truth in the company of friends,” as the motto from Collwell College at the University of California, Santa Cruz implores, should appreciate the privilege, especially given the struggles of most of the human family to secure even those most basic human needs.
Noted scholar and critic Henry Giroux and others have noted recent trends “of mission drift, one marked by a fundamental shift of the university away from its role as a vital democratic public sphere toward an institutional willingness to subordinate educational values to market values” (Henry A. Giroux, Neoliberalism’s War on Higher Education , 2014, p.121). The interlocking efforts to simultaneously defund public education while nurturing private profit-seeking education is symbolic of the slow poisoning of our social fabric neoliberalism’s individualistic greed incentives have unleashed. Higher education must confront this hegemonic force openly, thoroughly, and civilly. As Gandhi warned us long ago, before our human population was less than a third of its current size, “There is enough for everyone’s need, but not for everyone’s greed.”

Controlling costs and thereby reducing student debt is an obvious aim of the possible approaches suggested above. Providing the opportunity for each individual to reach their potential is crucial for a fully developed society – the ultimate public good. As British epidemiologists Pickett and Wilkinson have shown in their well-researched The Spirit Level: Why Equality is Better for Everyone, inequality is directly tied to increased social harms. On a single finite planet with one human family, we can have only one common future. Redesigning a system based on greed into one of cooperation and the public good should be at the heart of higher education. And we all know that the best leaders practice what they preach.

Thursday, November 13, 2014

If MLK and RFK Had Lived To Retirement

The trinity of having finished reading Tavis Smiley's recently released Death of a King, on the final year of of Martin Luther King, Jr.'s shortened life; seeing actress and playwright Anna Demeare Smith address racism via theater; and reaching the Medicare age all within the same week has me wondering how the world might be quite different had those two lives not been snuffed out so early. MLK, Jr. had just turned 39 and RFK was only 42 when bullets struck them down.

As Smiley's focused biography notes, King had made some significant shifts of ground in his final year - from his fiery oratory against the Vietnam War to the call for a focus on poverty. Kennedy was in the midst of similar shifts having come out against the war and having recently toured the Appalachian poverty fields. King was becoming demonized by the more militant of the black community as well as the more conservative members who believed his focus should remain on racial inequality. And of course much of the white community felt he had no authority to speak beyond that more narrow focus of race. Death threats mounted. Yet King, felt compelled to push even against many of his closest advisers and friends. The roller coaster physical, mental and emotional struggles were huge as pieced together by Smiley and his co-author, David Ritz. But as we see in King's own words from a sermon days before his assassination, he was driven by his increasing understanding of the interdependence of all these issues - racism, economic justice, and war.

     "Ultimately a genuine leader is not a searcher for consensus, but a molder of consensus. Cowardice asks the question - is it safe? Expedience asks the question - is it politic? Vanity asks the question - is it popular? Conscience asks the question - is it right?" (p.227-8).

For King this is the fundamental question and the reason he returned to Memphis to participate in march to support the striking Memphis garbage workers. It is also the reason despite many in his inner circle advising against it he gave perhaps the most compelling speech of his life, Beyond Vietnam: A Time to Break Silence at the Riverside Church in New York City one year to the day, that he was murdered. If you have never heard this speech, listen to it here and see how compelling it is even with today's ears.

Anna Demeare Smith is perhaps best know for her portrayal of Dr. Nancy McNally, the National Security Adviser on the TV series "The West Wing". Besides being awarded a MacArthur fellowship and numerous other awards, her more poignant work has been as a playwright who uses verbatim interviews she does to address the complexity of issues. At her performance the other night she took on the characters of a Korean shop owner in Crown Heights, James Baldwin, Margaret Meade, a Jewish mother, Cornell West and a few others. The excerpts she shared around race and conflict were both powerful in their candor and her capture of the characters as she performed their words. The crowd rose to their feet in thunderous applause at the conclusion of this powerful experience that had use look at race and conflict through numerous lenses.

I have long been struck by all that King accomplished and affected in his short life. In Smiley's account of his last year, there was an approach that Bobby's people made to Martin as RFK made the decision to seek the presidency. King  because he was so caught up in planning the March on Poverty that summer, deferred that conversation until after the Memphis garbage workers march was completed, an event he didn't live to see. As I reached my own Medicare standing last week and rubbed up against this story I could not help but wonder what MLK and RFK might have forged together should their twin killings not have occurred so early in their lives. The trajectories they were on were paralleling. Their ability to unite a divided nation would have been powerful although certainly not guaranteed.

That each of them pressed on with their need to speak their truth with the full awareness that there were those who wanted to snuff out their lives should inspire us. Those of us crossing the Medicare threshold should certainly feel freer to speak their truth to power. There are an awful lot of us crossing that threshold these days and over the next few years. What might we collectively unleash if we were but brave enough to do so?

Who's willing to test this hypothesis? Can we build a better world to leave our children and theirs? Is it worth the try? As King noted, the real question we must answer for ourselves - is it right? and is This Our Time to Break Silence?