Economic Update with Richard D. Wolff

Episode: Higher Ed Class Struggles

Date: September 23, 2016
Host: Richard D. Wolff
Guest: Professor Michael Pelias (Long Island University Brooklyn)

Brief Overview

This episode of Economic Update centers on the deepening entanglement of big business and government in the U.S., exposing how their partnership perpetuates economic and social inequalities. The second half features an in-depth interview with Professor Michael Pelias, highlighting the recent unprecedented faculty lockout at Long Island University (LIU) Brooklyn—framed as a case study in the ongoing class struggle within higher education. The discussion critically examines the erosion of faculty rights, student welfare, and public education under a profit-driven, corporate university model, invoking wider concerns about the future of education and societal well-being.

Key Discussion Points and Insights

I. The Revolving Door: Government & Corporate Power (00:00–14:00)

• Federal Reserve & Interest Rates:
  The decision not to raise interest rates signals fear of further stalling a weak recovery that is failing most Americans (01:40).

• Big Business & Politics Are "Two Sides of the Same Coin":
  Wolff details how politicians frequently move into lucrative private sector roles post-tenure, highlighting former Speaker John Boehner’s switch to lobbying at Squire Patton Boggs and similar cases involving John Breaux and Trent Lott (04:00).

• Wealth from Political Power:
  Sarah Palin’s multimillion-dollar home sale is cited as an example of financial reward following political prominence (06:00).

• Brexit and Declining Wages:
  Wolff connects the UK’s Brexit vote to a 10% decline in real wages for British workers from 2007–2015—a key driver of backlash against the political elite (08:30).

  • Quote: “The real wages of the British working class on average dropped 10% over the last eight years. You wonder why the British working class was angry…” (09:35)

II. Economic Inequality & Structural Problems (14:00–29:00)

• New Corporate Strategies & Job Location:
  Goldman Sachs's expansion in Salt Lake City is illustrative of shifting patterns in corporate geography—possibly to evade accountability or regulation (12:45).

• Black-White Wage Gaps:
  A study finds Black men make 22% and Black women 34.2% less than their white counterparts with equivalent qualifications—worse than in 1979—undermining narratives of racial progress (15:30).

  • Quote: “At the very least, you should raise your eyebrows” regarding supposed progress in racial economic equality (17:10)

• Historic Prison Inmate Strike:
  U.S. inmates protest “slave wages” ($0.74–$3.34 per day) and forced work, with the 13th Amendment’s loophole allowing slavery as punishment for crime (19:45).

  • Quote: “We didn’t abolish slavery in the United States because we specifically allowed it as a punishment for a crime. Think about that for a moment…” (21:32)

• Corruption, Nepotism & Drug Price Gouging:
  The EpiPen pricing scandal entwines a Senator’s daughter (Heather Bresch, Mylan CEO) and wife in both regulatory and educational positions, illustrating the marriage of state and capital (23:30).

• Billionaire Political Influence:
  Examples include Joe Ricketts and Sheldon Adelson pivoting to supporting Donald Trump after backing other GOP candidates, showing fluid, self-interested alliances among the wealthy and powerful (26:30).

• Main Takeaway:
  Wolff cautions against simplistic divides between government and business, asserting their interests are deeply aligned, regardless of partisan rhetoric (28:40).

  • Quote: “These two positions, apparently opposed, aren’t in fact very opposed. They share an unwillingness to see the tight, cooperative relationship between the top levels of capitalist business and the top levels of government.” (29:30)

III. European Political Rejection of the Status Quo (29:00–30:00)

• Recent Berlin election saw strong rejection of Angela Merkel’s party and mainstream Social Democrats, while the anti-capitalist Die Linke—the Left Party—rises to third place, reflecting Europe’s ongoing economic crisis and political discontent.

The Crisis in Higher Education: LIU Brooklyn Lockout

[Interview with Prof. Michael Pelias] (30:00–57:06)

A. The Context & Unprecedented Faculty Lockout (30:45–37:00)

• Contract Negotiations:
  LIU Brooklyn’s faculty union’s attempt to secure modest wage increases after years of wage stagnation despite the university’s large budget surpluses.
  • “We were asking for maybe about 10% of the actual surplus to go to the faculty. We didn’t get anywhere.” (32:18)
• Management Intransigence:
  Administration rejects most faculty proposals, underscores prioritization of surplus retention over faculty welfare.
• The Lockout:
  On August 31, 2016, LIU locks out faculty (first time in U.S. higher ed history), bars them physically from campus, suspends pay & health insurance.
• Impact on Students:
  With unqualified administrators and hastily hired replacements forced to teach, students receive substandard education.
  • “The dean of the liberal arts school…was assigned to teach ballet. The VP in charge of operations was assigned to do yoga.” (35:29)

B. Outcomes and Ongoing Negotiations (37:00–39:00)

• Resolution:
  Professors returned under the terms of the previous contract with pay docked for lost days—a de facto pay cut.
  • Quote: “Most people are working on a minus two going forward into the extension…This is one very egregious moment that has not really been discussed yet by the faculty, but they’re going to be aware of it when they get their first paycheck.” (38:46)

C. Deeper Analysis: Why Is This Happening? (39:00–45:41)

• Corporate Austerity Model:
  The board installs a president with no academic background, enforces austerity for faculty and students alike, while surpluses and endowment growth are funneled away from education.
• War on Students & Faculty:
  Tuition continues to climb ($30,000–$55,000), graduates take on heavy debt, and the educational mission shifts from cultivating citizenship to basic vocational training.
  • Quote: “You have been created as a new class of indentured servants…You are not here to think, you are not here to learn. You are here to reproduce for the system and pay back your debt.” (41:24)
• Neoliberal University Model:
  LIU and similar tuition-driven universities become laboratories for the corporate transformation of higher education—emphasizing profit, professional schools, and marginalizing humanities.

D. Education as Privilege: Return of the Pre-WWII Model? (45:41–49:00)

• Divided Outcomes:
  Elites continue to receive full “liberal education” at private universities; everyone else relegated to technical, debt-financed, vocational training.
  • Quote: “It undercuts the whole notion of a liberal education as a human right.” (45:03)
• The New Education Tax:
  Students burdened by loans financing education that is less broad, less enriching, and more expensive than ever.

E. Faculty and Student Response, and Prospects for Change (45:53–55:24)

• Faculty Mobilization:
  The lockout prompts greater solidarity among professors, almost unanimous rejection of previous contract offers, and increased militancy in the union.
• Student Uprising:
  Students stage daily walkouts and protests, demanding their professors back in the classroom.
  • Quote: “Every day of the lockout at noon, they would chant LIU professors locked out, students walkout. And they would march out... Shame, shame on you, LIU.” (46:38)
• Prospects:
  Pelias identifies hope in the fusion of student debt activism, Black Lives Matter, and anti-corporate organizing on campuses.

F. The Administrators’ Takeover and Marginalization of Faculty (55:24–57:04)

• Power Shift:
  University governance moves from faculty collectives to a corporate board/administrative class—mirroring the business world and disconnecting decision-makers from educational practice.
  • Quote (Wolff): “The administrators were under us in the sense their job was to do the administration subordinate to serving what the professors did…This collective power by those qualified to do it has been usurped.” (55:24)
  • Quote (Pelias): “The entire wage package for the faculty each year is less than what the president of the university makes—one individual.” (56:34)

Notable Quotes & Memorable Moments

• On Brexit & Declining Wages:
  “The real wages of the British working class on average dropped 10% over the last eight years. You wonder why the British working class was angry…”
  (Wolff, 09:35)

• On Black-White Wage Disparity:
  “As of 2015…Black men make 22% less and Black women 34.2% less than white people... That is a larger gap than those gaps were in 1979.”
  (Wolff, 15:30)

• On the Prison Strike:
  “We didn’t abolish slavery in the United States because we specifically allowed it as a punishment for a crime. Think about that for a moment…”
  (Wolff, 21:32)

• On The Corporate University:
  “You are not here to think, you are not here to learn. You are here to reproduce for the system and pay back your debt.”
  (Pelias, 41:24)

• On Student Solidarity:
  “Every day of the lockout at noon, they would chant LIU professors locked out, students walkout. And they would march out... Shame, shame on you, LIU.”
  (Pelias, 46:38)

• On Faculty/Administrator Wage Disparity:
  “The entire wage package for the faculty each year is less than what the president of the university makes—one individual.”
  (Pelias, 56:34)

Important Segment Timestamps

• 00:00–14:00: Wolff’s weekly roundup—government/corporate overlap, wages, Brexit, Goldman Sachs, prison labor.
• 15:00–29:00: Racial wage gaps, prison strikes, the EpiPen scandal, billionaire campaign spending.
• 29:00–30:00: Berlin election and anti-capitalist sentiment.
• 30:00–37:00: Professor Pelias describes the LIU lockout—origins, lockout logistics, student impact.
• 37:00–45:41: Analysis: austerity, disrespect for educators, class stratification of education.
• 45:41–49:00: The shift toward vocational, debt-driven education; “the new educational tax.”
• 49:00–55:24: Possible student uprisings, faculty/student solidarity, hope for organizing.
• 55:24–57:06: The corporate model of university governance, usurpation of faculty decision-making, shocking faculty/administrator pay disparities.

Conclusion

This episode exposes the depth and breadth of economic and social class struggles—not just in politics and policy, but within America's universities. The LIU Brooklyn lockout is depicted as both a symptom and a warning, emblematic of a broader, dangerous move toward corporatized, inequitable, debt-driven education. Faculty, students, and listeners are urged to recognize and resist these trends, fostering solidarity and reasserting education as a public good central to democracy and social mobility.