The General Electric University: Not Wisconsin’s Brightest Idea

How can a public university sustain its public mission when state funding dwindles to nothing?

It’s not just an idle question. By 2059, based on current national trends, average state fiscal support for higher education will reach zero.

State aid to public universities has declined 40 percent over the past three decades. And in response to the recent economic downturns, state governments have only deepened the cuts.

For the second biennial budget in a row, Governor Scott Walker has cut funds for the University of Wisconsin, where I work—this time by nearly $33 million for the next two years.

These cuts present tough questions about the future of the university. General Electric CEO Jeff Immelt offered his own answers at UW’s most recent Board of Regents meeting.

The biggest problem facing the country, according to Immelt, is failure to grow fast enough. More entrepreneurship, more drive, and more start-up companies, he declared, will fuel economic development. The university must become a “strategic partner” in this mission through its research, its funding priorities, and its workforce development capacities.

Immelt’s prescription is radically different from the “Wisconsin Idea,” UW’s founding mission as a public land-grant university. The university is supposed to exist as a “laboratory of democracy,” to improve the health and quality of life for the people of the state. The original Wisconsin Idea identified monopolies, trusts, high costs of living, predatory wealth, and poor labor protections as the key problems that must be addressed—or else “no advancement of human welfare or progress can take place.”

But Immelt’s interpretation of a university’s mission is an increasingly common one—to move the state forward by building stronger connections with business and industry exclusively, with little attention to the people of Wisconsin and their protection.

Tuition Freeze a Distraction

Consider the legislature’s recent decision to freeze tuition for all students at UW, in response to a $648 million reserve surplus discovered by a legislative audit.

Though clumsily handled, the reserves represented the university’s defense strategy against the state’s continuing budget cuts. But legislators of both parties seized the political opportunity, calling on the university to freeze tuition—a seemingly welcome move for families burdened with skyrocketing college debt.

Yet freezing tuition alone does not ensure equitable access to the university. The amount of financial aid based on need—from both the state and the university—is very low, making it hard for working-class students to afford college. A recent report on UW admissions revealed that, over the past decade, the university has admitted its historically lowest number of Wisconsin residents, as opposed to out-of-staters who pay much more; the proportion of first-generation college students is falling; and the university admits more students whose parents graduated from UW than either first-generation college students or students of color.

Freezing tuition alone does not necessarily mean an increased commitment to recruiting and retaining low-income or first-generation students or students of color. It is not the same thing as providing support services for underrepresented students to ensure their success in college.

In fact, freezing tuition without increasing revenue elsewhere actually reduces the amount of public money used to support the university—and that accelerates its push into the arms of corporate partners like GE. The university uses the platform of scarcity to justify shifting its priorities away from access and equity, towards the needs of industry.

Corporate Vultures Swoop In

What’s more, focusing on the tuition freeze ignores a key problem in the state’s revenue equation: untaxed corporate incomes.

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Nearly two-thirds of corporations in Wisconsin pay zero dollars in income taxes—and the number is rising. Over the next four years, the corporate income tax rate will drop from 7.9 percent to 0.4 percent, thanks to Walker’s recent tax cuts.

Some corporations—such as Immelt’s General Electric—earn high profits, pay nothing in income taxes, and earn state tax credits. In 2008, the state gave up $254 million in corporate tax breaks to all corporations—while GE earned $17.4 billion in profits nationally. The company, which employs 6,500 people in Wisconsin, paid $0 Wisconsin corporate income tax from 2000 to 2008. GE is notorious for dodging federal taxes, too, and its unionized employees are fighting a wave of plant closings. What a role model for public universities to emulate!

Corporations turn to the university to prepare their workers and to innovate their products—but they decline to fund the public system they depend on. And neither university nor state administrators are demanding fair tax policies that would yield enough money to keep UW going. Instead, they are restructuring the university to fit corporate needs even more closely.

This version of privatization does not just mean public institutions shrivel to obsolete dust bunnies, while flashy private colleges and universities enter center stage with their efficient bells and whistles. Rather, it requires shrinking the elements of the public university that do not correlate with corporate needs, while bulking up the university’s corporate-friendly arenas.

This new way of privatization in higher education means restructuring public institutions so that their precise reason for being is to grease the wheels for private businesses and industry. Privatized public universities will still be under state authority, but their mission will be to facilitate the accumulation of private profits, rather than to open their doors to the people as true laboratories of democracy.

Whatever Business Wants, Business Gets

Departments will increasingly rely on grants and corporations for their revenue. Take, for example, the university’s “fermentation lab” to research beer-making in the department of bacteriology, started thanks to a $100,000 infrastructure gift from MillerCoors.

Such relationships strain the university’s commitment to ethical research practices and academic freedom. A corporation’s need to innovate for profit may not match the university’s mission to innovate for understanding.

Majors that don’t directly contribute to businesses—African-American studies, English, history—face increasing financial pressures since there are fewer opportunities for industry collaboration and ensuing grant dollars in these fields, making them more dependent on the dwindling state support. Under greater financial pressure, such departments are now forced to compete with each other for a shrinking pot of money, forcing departments to cut course offerings and full-time staff positions, and thereby reduce the capacities of these programs.

A department’s proximity to business needs is not the best metric of its social relevance. Consider our nation’s urgent need for examination of race and racism, as displayed in the aftermath of George Zimmerman’s trial. Yet programs that foster these conversations are increasingly underfunded and precariously staffed, threatening their place in the university.

Even more extreme, university centers that challenge corporate influence are at risk of total elimination. The Wisconsin legislature recently threatened to cut state funding and thereby shut down UW’s Center for Investigative Journalism, a nonprofit center that gives internships and training to new journalists and serves as a nonpartisan watchdog. The center has exposed key threats to the state’s democracy, like special interest groups’ financial gifts to legislators in return for legislative favors.

Needless to say, Immelt’s plan to tie the purpose of the university more closely to industry’s needs also has ill effects for campus workers. As state aid declines, the university will outsource more work to lower-bidding contractors, from custodial services to part-time instructional staff. Adjuncts will take on a greater proportion of the university’s teaching load, with fewer job protections, no union representation, and less availability for students. Applying market treatment to workers—such as merit pay and raises for “top performers” rather than across-the-board raises for all—are cornerstones of the university’s new human resources plan.

Immelt’s address to the Board of Regents stands out as a critical pivot in UW’s move towards privatization. We will remember this as the moment when the needs of business became more important than the needs of the people of Wisconsin.

As the university bends to the will of corporate interests, we are left to wring out hopes for democracy in the spaces left behind.

EleniSchirmer is a member of the Teaching Assistants’ Association at UW-Madison. Despite losing legal collective bargaining rights to Governor Scott Walker’s 2011 Act 10, members of TAA won a big raise in 2013 through informal bargaining and direct action.