The financial landscape for public universities is becoming increasingly precarious, marked by declining enrollment and significant budget shortfalls. At the center of this storm are the complex relationships between university administrations, faculty unions, and the collective bargaining agreements that govern them. We sat down with Camille Faivre, an expert in higher education management and finance, to dissect the recent labor dispute at Portland State University, a case that highlights the growing tensions between fiscal realities and contractual obligations in academia. Faivre helps us understand the procedural nuances of faculty layoffs, the long-term consequences of cost-cutting measures, and the external pressures that can force an administration’s hand.
The university initially cited “curricular needs” for layoffs, but an arbitrator determined budget shortfalls were the real cause, requiring a different process. Can you elaborate on the key differences between these two layoff procedures and why an administration might choose one path over the other?
Certainly. This distinction is at the heart of many university labor disputes. When an administration cites “curricular needs,” they are essentially arguing that a program is changing or being eliminated, and therefore the faculty associated with it are no longer needed. This process is typically more direct and less scrutinized. However, declaring a “financial exigency” is a much more serious and transparent step. It’s a formal admission that the institution is in a state of financial crisis. This declaration triggers a far more lengthy and rigorous process under most collective bargaining agreements, often requiring the university to open its books and prove the crisis is real, which gives the faculty union significant oversight. An administration might opt for the “curricular needs” justification because it’s a path of less resistance, avoiding the public declaration of a financial emergency and the collaborative, and often contentious, process that comes with it.
After reinstating faculty, Portland State still faces a $35 million deficit and a significant enrollment decline. What specific, practical steps must the university now take to reconcile its budget crisis with its obligations under the collective bargaining agreement?
Reinstating the 10 faculty members was the right move legally, but it doesn’t solve the underlying $35 million problem. The first step must be to abandon adversarial tactics and engage in genuine, transparent collaboration with the faculty union. This means opening the books and having difficult, shared conversations about where cuts can be made. For instance, they need to scrutinize administrative structures, which the university has already signaled it is looking at. Second, they must conduct a thorough review of all academic programs, not with the predetermined goal of cutting, but to identify opportunities for strategic investment or consolidation in a way that aligns with the collective bargaining agreement. Finally, the most critical long-term strategy is tackling the 21.2% enrollment decline head-on. This isn’t just about marketing; it’s about program innovation and retention efforts that make the university a compelling choice for students again. Without more students and the tuition revenue they bring, these budget crises will become a recurring nightmare.
The arbitrator found that the university redistributed work from laid-off faculty to lower-paid adjuncts, some of whom were the same people who had been laid off. How does this practice impact a university’s financial health, academic continuity, and overall faculty morale in the long term?
This is a deeply damaging practice, both ethically and strategically. Financially, it appears to be a quick fix—you reduce salary and benefits costs for the same courses being taught. However, in the long term, it creates a precarious, two-tiered faculty system that can harm the academic core of the institution. For academic continuity, you lose the institutional knowledge and departmental service that full-time, non-tenure-track faculty provide. They are the ones who often sit on committees, mentor students, and contribute to the daily life of a department. When you convert them to adjuncts, you lose that commitment. But the impact on morale is perhaps the most devastating. Imagine the feeling of being told your position is no longer needed, only to be offered your exact same courses back with less pay, no benefits, and no job security. It breeds an incredible amount of distrust and cynicism, and that feeling permeates the entire campus culture, making any future collaborative efforts nearly impossible.
The university’s president initially pushed back on the arbitrator’s findings before ultimately deciding to comply. What factors, such as employee petitions or legal considerations, typically pressure a university administration to reverse its position and adhere to an arbitration ruling it disagrees with?
An administration’s initial resistance is often a calculated move, testing the resolve of the union and the broader campus community. However, several factors can force a reversal. First, there’s internal pressure. In this case, the petition signed by over 260 employees demonstrated a strong, unified front from the faculty and staff. That kind of internal solidarity is very difficult for a president and a board of trustees to ignore. Second, there are significant legal and financial risks. Fighting an arbitrator’s legally binding decision in court is expensive, time-consuming, and has a low probability of success. The university would likely spend more on legal fees than it would save, all while generating negative publicity. Ultimately, it becomes a cost-benefit analysis. The administration weighs the cost of compliance—including the financial impact and the perceived loss of face—against the escalating costs of continued defiance, which include legal fees, plummeting morale, and lasting damage to the university’s reputation.
What is your forecast for public universities facing similar budget shortfalls and enrollment declines?
My forecast is that we are going to see many more conflicts just like the one at Portland State. The fundamental pressures aren’t going away. Public funding models, like Oregon’s, are often tied to enrollment and completion metrics, so as student numbers fall, so does state support. This creates a perfect storm where administrations feel immense pressure to make swift, deep cuts. Simultaneously, faculty unionization is growing, providing a powerful counterweight to protect academic integrity and job security. I predict a future of very tense negotiations and an increase in grievances going to arbitration. The most successful institutions will be those that can break this cycle of adversarial conflict and pioneer new models of shared governance, where budget decisions are made collaboratively and transparently, rather than handed down by decree. The alternative is a future of perpetual strife that serves neither the students nor the institution’s mission.
