Message from President Sullivan: A Commitment to All Employees
February 17, 2012
Dear colleagues in the University community:
For the past several years, both students and faculty members in living wage organizations have delivered to the University various lists of demands regarding the compensation of our lowest-paid employees. The most recent was delivered last week by the Living Wage Campaign at the University of Virginia. We also received a petition about living wage issues that was signed by about 300 faculty members. Because I place a high priority on improving salaries for all University employees and am personally committed to improving the salaries of our lowest-paid employees, I feel that a response is due to the entire University community.
The list of demands from the Living Wage Campaign urged the University to increase the minimum hiring wage for entry-level employees to $13 per hour including health benefits (see footnote below), and the faculty petition urged a minimum hiring rate of $11.44 per hour plus benefits. The actual current minimum starting pay for an entry-level employee including the average level of health benefits is $14.55 per hour, exceeding the students' demand by $1.55 per hour.
The University provides generous health care benefits, which by themselves average $3.90 an hour. Besides health benefits, the lowest-paid University staff receive $450 to help defray the cost of other benefits, and all employees are eligible for backup child care, retirement, an annual $2,000 education stipend, life insurance, and other benefits. If all benefits are included, the current minimum starting pay ranges from $17.07 to $20.20 per hour, depending upon the health plan chosen.
Last spring, I submitted my first budget, which included special funding to reduce the number of employees in the minimum pay range, to the Board of Visitors. The number of employees earning less than $25,000 was reduced by nearly half, from 317 to 165 individuals. The number of employees earning the minimum entry-level hiring wage dropped from 61 to 26.
I have been asked to index the starting wage to inflation. I cannot promise to do that because I can neither promise that the University's revenues will increase, nor predict when or if we will be subject to another state-imposed salary freeze. Even without indexing, however, the University has made progress against inflation for its lowest-paid employees. Over six years, the University has increased the minimum hourly wage by 65 percent; during this same period, the Consumer Price Index (a common measure of inflation) increased by only 21 percent.
These milestones demonstrate progress. At a time when the state has frozen salary increases for four consecutive years, the University continues to find ways to make substantial improvements in the compensation of its lowest-paid employees. We do this because we believe it is the right thing to do.
Even in this economic climate, we continue to find ways to help our employees. These include:
- Increasing the supplemental benefit credit from $400 to $450 per year for University staff members earning less than $42,000. This credit helps to offset the employee's cost of benefits, including a state-mandated 5 percent contribution to VRS.
- Accelerating pay increases for employees hired before July 1, 2010, who earn less than $25,000. The average increase was 8.7 percent.
- .Offering employees hired at the entry-level rate the opportunity to participate in a training program during their first year that, upon successful completion, results in a $600 salary increase.
- Designating funds for merit-based strategic salary adjustments for staff and faculty members.
Living wage advocates also demand that we increase the minimum hiring rate for those working under contract and subcontract. As we learned in a 2006 opinion from Virginia's attorney general, the University does not have the authority to stipulate a living wage requirement that must be paid by private contractors and vendors. (The attorney general's opinion is available here: http://www.virginia.edu/presidentemeritus/spch/06/attorneygeneral060321.pdf.)
Our resources for the current fiscal year are completely committed, and we are just now beginning the budget process for 2012-13. The budget process includes a methodical review of University-wide compensation practices. Changes in the salary structure, however, must be evaluated within the context of all of the University's priorities and financial needs. Our priorities include improving the salaries of faculty and staff, hiring additional faculty, and providing financial aid to students and health care to patients, all while we seek to minimize tuition increases.
I appreciate the concern expressed by students and faculty members involved in the living wage advocacy groups. I hope the information in this message helps to tell the story of the University's commitment, and I hope you understand that this is a sincere, thoughtful, and continually evolving effort.
In closing, I want to reiterate my concern for all University of Virginia employees. I remain committed to improving conditions for our lowest-paid employees, and I will continue to work toward this end through appropriate measures.
Very truly yours,
Footnote: The following is an excerpt from the Living Wage Campaign implementation plan: "Beginning in fall of 2012, the living wage will be at least $13.00 per hour, based on figures provided by the Economic Policy Institute (EPI). On a yearly basis, the living wage must be re-calculated to comply with current EPI figures, which take into account annual inflation and cost-of-living measures specific to the Charlottesville area. Calculations for individual employees will be based on EPI figures for a two-earner, two-dependent family. Because EPI figures include the cost of health benefits in their per-hour calculation, the University or contractors may factor in their yearly contribution toward employee health care in reaching the living wage number. However, other benefits provided by the University or contractor, including leave and education benefits, may not be included in the base wage calculation. This calculation will be made annually on September 1."
This website describes in greater detail our work on competitive compensation and various initiatives to support our lowest-paid employees: www.virginia.edu/wages