A devoted cadre cleans AU and feeds its students, faculty and staff. But these employees do not have the same benefits as others who work on campus. As an educational institution AU could offer a benefit proven effective in promoting diversity and inclusion for the university and career enhancement for the employees: free tuition for AU courses for these “outsourced” employees the same as for those faculty and staff directly employed by AU.
Service workers have also suffered from a lack of retirement benefits at AU.Many of the outsourced employees would like to retire from their physically demanding labor. But for many years they, unlike AU’s directly employed workers, had no pension benefit payment set aside for them – in some case for as much as 19 years from 1981 to 2001. As a result there’s little – very little – money in their pension fund on which to retire. And of course, Social Security benefits are minimal since much of their work was at close to minimum wage. AU should chip in to help, for example, Leila Williams– who has worked here for 51 years.
Professor Mary Gray
Department of Math and Statistics
College of Arts and Sciences
Currently working as a food server in the Terrace Dining Room, Ms. Leila Williams is now 80. She has prepared or served food to students at AU for over 53 years. She says she can’t afford to retire. The photo is from May 1, 2015. Year after year, the University talks “inclusion” while refusing to even meet with Ms. Williams and her colleagues. Why won’t the University talk to Ms. Williams and other older workers about the broken promises about retirement made to them over 50 years ago?
- Administrators broke promises about pensions made to service workers. AU promised workers who started in the 1970s pensions at the end of their years of work. Then AU brought vendors such as Marriott to campus who did not provide any pension payments for 18 years from 1981 to 2000. See the the workers’ contract with Marriott at the time. Note that pensions are not mentioned. Workers had the choice of accepting the contract or losing their jobs. Now 16 workers over 65 with more than 35 years of service can’t retire. President Sylvia Burwell refuses to meet with workers or faculty about this problem. What moral leadership!!
- Administrators exclude Black and Latino service workers from free classes on campus while publicizing how “progressive” and “inclusive” the university is. Every year 1700 administrative staff–mostly white–and 915 full time faculty, mostly white–can complete their law degrees, MBAs, and take other graduate and undergraduate classes for free. Service workers can’t even take undergraduate classes. Service workers–many of whom are DC residents–are locked out of education on campus while the university pays no DC real estate tax on a campus valued at hundreds of millions. What respect for the citizens of D.C. who pay real estate taxes. Adding one or two service workers to a class would cost the University nothing, but university administrators simply don’t care about giving people opportunity.
- Service workers on campus receive pension contributions at a rate one-third less than administrative staff. Every month the administrative staff–mostly white–receive 10% of their monthly salaries in their 403b pension accounts. This contribution is free from the University and is a very generous deal. These 403bs are just like 401ks in the private sector. Service workers receive $1.20 per hour worked, or around 6% a month, and they don’t work during the winter break or doing the summer so the actual percentage is lower. (See the previous contract at https://www.unitehere23.org/contracts/ The new contract is not yet online.)
An AU president once said, “If they wanted larger pensions, they could just bargain for them.” Really? Is it realistic for low wage workers barely scraping by to cut back on current wages to fund their pensions? If AU was a moral university, it would see that all vendors on campus had to match the 10% contribution, it gives faculty and administrators. Franklin and Marshall College gives its cleaners the exact same benefit package provided to faculty and administrators so it can be done. See https://www.fandm.edu/teamclean
- Administrators cover up problems with labor practices on campus. AU web sites do not contain any information about the lives of the 250 or more service workers on campus. This is so convenient for AU administrators. When new outrages occur, such as depriving all the workers in the campus Starbucks of heavily discounted college, no one knows. Yes, that is the case. If the employees of the Starbucks on campus worked for Starbucks, they could take online classes at Arizona State University at a 42% discount paid for by Starbucks . Adding in a Pell grant, college would get close to free. But the workers in Starbucks now work for Chartwell, the new university food vendor. Before Chartwell, they worked for Aramark. Dozens of people have been deprived of college through the usual AU silence. Should the workers in the campus Starbucks be able to choose between Chartwell’s benefits and what Starbucks offers?
Ask your professors to discuss the issues in the post about the moral failure of American University. For years the people suffering the most from AU’s labor practices have been African-American and Latino. This is racism. This is classism. These policies are not acceptable.
What do faculty suggest? Please ask them before class, during class, and after class. How does AU become a community of inclusion? What pressures will persuade AU to include rather than exclude Black and Latino service workers. When will the service workers receive 10% monthly retirement contribution administrators and faculty receive rather than the 6% food service workers receive now? And when will service workers receive the same free tuition for classes that administrators and faculty receive now?
AU administrators now charge food service workers who are only paid for nine months a year, the same monthly parking charge as $500,000 a year vice-presidents. See what the Eagle had to say about this. But the Eagle spoke up too much. And so the University closed the weekly print edition of the Eagle. They said it cost too much. That $10,000 a year to print it was too much in a non-profit with a $600,000,000 annual budget.
How to Solve the Retirement Crisis at AU with No Cost to Students.
What would it cost to remedy this situation of sixteen over
65-year old workers who can’t retire?
The problem began in the 1980s when AU outsourced or privatized its food service and cleaning services to vendors. AU ignored the policies of these vendors, pretending that AU had no moral responsibility for their actions on campus. Marriott, the first food service vendor made no payments to the pensions of food service workers while it was on campus. There have been a succession of vendors since Marriott.
Please remember in addition to the empty years, approximately 1982-2001, with no retirement contributions, these workers also will receive small social security checks based on many years at or near the minimum wage. The union has identified 16 workers who need help in order to retire.
How much monthly income does a worker needs for a decent retirement?
1. Professor Mary Gray of the Math/Stats Department has suggested using twice the poverty guideline amount for an individual. The national poverty guideline amount excluding Alaska and Hawaii is $11,880. Twice this amount is $23,760.
How much income can a low income worker depend upon from Social Security?
2. A food service worker with 39 years on campus said she expects to receive about $900 a month. Medicare will deduct $121.80 for the Part B premium, leaving a net Social Security benefit of $778 a month, or an annual Social Security benefit of $9338.
What is the gap between twice the poverty guideline and what a low-wage AU worker can expect from Social Security?
3. $23,760-$9,338=$14,422 a year or $1,202 a month.
What would the monthly cost be to American University of supplementing 15 workers over 65 with over 35 years of work at AU each?
4. $1,202*15 workers=$18,030 a month
What is this amount as a percentage of AU’s monthly spending?
With a total FY2017 annual budget of $610,000,000, the University spends $50,833,333 a month. The emergency supplement of $18,030 a month would amount to (0.000355) less than four thousandths of one percent of the monthly budget. (This amount is now out of date. With the University’s new budget of over $800,000,000 a year, the amount for all the elderly workers would be less than three thousandths of one percent of the University’s monthly budget.)
Where could American University find this sum without influencing tuition?
We recommend a 10% reduction in the salaries of University Vice-Presidents or a 4% reduction in the salaries of the twelve highest paid officers of the University to fund this pension supplement. See the IRS 990 form online for the salaries of these officers. Either reduction would entirely fund the pension supplements.
One of the Great Coverups in the History of Higher Education: American University Loses $91 Million; Georgetown University Suffers $150 Million Loss in Credit Swap Deals
In one gamble that failed in 2008, the Board of Trustees of American University lost an amount equal to about a quarter of the American University’s endowment at the time.
Did they inform the students? No. Did they tell the faculty? No. Did they tell the tuition paying and loan borrowing parents? No. AU lost $91 million in a bet on interest rates and still faces additional losses of $76 million according to a report from the Roosevelt Institute and AU’s financial documents. The bet is technically a credit swap agreement with a bank, or a bet on the direction of interest rates. AU bet interest rates would rise; rates have stayed low for years. As the Roosevelt Institute report below shows, AU was at the mercy of the bankers on its own Board of Trustees:
“American is also a good example of the powerful role that bankers often play at colleges and universities. Several members of the finance industry sit on American’s board, including high-level people at Goldman Sachs and
JPMorgan Chase. Some of these same financial companies are involved in American’s swap deals, as bond underwriters and/or swap counterparties.
For example, a high-level executive at Bank of America sat on the
board during the period that American entered into its two toxic swaps with Bank of America.” (see page 18 and page 23.)
Did University administrators talk about new financial safeguards in an email to students, parents and faculty? No. Did they institute new financial safeguards so a similar loss would never happen again? No. Or did administrators cover it up? Yes.
Please download the report at this link:
We appreciate the permission of the Roosevelt Institute to share this report with the community at American University rather than the normal method of purchasing the report through Sribd at the Roosevelt Institute web site.