RESOLUTION ON SALARY REDUCTIONS
Downloadable pdf: salaryreductionres.pdf
WHEREAS: The administration asks the Faculty Senate to vote its assent to the temporary reduction of faculty salaries, while also proposing to reduce the compensation of other employees of the University, in accord with Section 4.5 of the Regents' Policy on Faculty Tenure;
WHEREAS: The reduction of faculty salaries on the plan currently presented (1.15% for all faculty and 2.3% for academic and administrative officers) is projected to yield savings of $18.5 million;
WHEREAS: In a comparable situation of economic duress, in 1932, the Regents of the University of Minnesota imposed a salary cut on a sliding scale, reducing all salaries above certain thresholds and imposing no reduction on salaries below a certain threshold;
WHEREAS: The imposition of a salary reduction on a sliding scale, down to zero for salaries below a certain threshold, would readily achieve or exceed the savings projected to be achieved through the minuscule reduction of faculty salaries currently proposed; for example, a reduction of 20% on the increment of all salaries above $200,000 per annum, a reduction of 10% on the increment of all salaries above $150,000 per annum, a reduction of 5% on the increment of all salaries above $100,000 per annum, and a reduction of 2.5% on the increment of all salaries above $70,000 per annum might yield savings equivalent to those that the present salary reduction plan would yield;
BE IT RESOLVED: That in place of its proposal to reduce salaries of all employees of every category and salary level, the administration develop and present to the Faculty Senate an alternative plan that calls for temporary salary reductions on a sliding scale, with no reduction for salaries below a certain threshold, in order to achieve the same savings.
Comment regarding resolution from Karen-Sue Taussig, Bill Beeman, and Steven Ostrow:
We appreciate the administration's revised proposal as an effort to respond to concerns faculty have expressed about equity in dealing with the University's financial troubles. Nevertheless, we are disappointed with the administration's proposal of a uniform pay cut since this will be inherently regressive in its disproportionate effect on lower income members of the university community. With this resolution we offer an alternate proposal with two primary aims. First, we seek to distribute the burden of salary reductions in an equitable and progressive way across the faculty. We offer one of a number of possible strategies for achieving the same savings as the administration's current proposal that would protect salaries under a certain threshold. Second, we seek to establish a model that protects employees who lack the privilege of tenure, who are the lowest paid and most vulnerable members of our community, and who are not given representation in this forum, from any salary reduction, job loss, or layoffs at all. A 1.15% pay cut seems to be a relatively small amount, but we know that such a cut represents a far greater portion of expendable income for someone earning $45,000, than it does for someone earning $200,000.
During the financial crisis of the 1930s the regents implemented salary reductions on a sliding scale similar to the one we now propose. According to the minutes of the April 21, 1932 Board of Regents meeting, at that time "The regents put into effect a slash of 20% on that part of any salary over $3600; of 15% on that part between $2400 and $3600; of 10% on that part between $1100 and $2400, but left without reduction salaries and wages up to and including the figure $1200 [sic] a year."
The following is an illustration of a sliding scale model for salary reductions, with a 20% reduction on increments above $200,000, a 10% reduction on the increment $150,000-$200,000, a 5% reduction on the increment $100,000-$150,000, and a 2.5% reduction on the increment $70,000-$100,000:
Someone earning $70,000 or less would not take a reduction.
Someone earning $100,000 would take a $750 salary reduction (.75%)
Someone earning $150,000 would take a $750 reduction (on that portion between $70,000 and $100,00) + $2,500 reduction (5% on that portion above $100,000) for a total salary reduction of $3,250 (2.17%)
Someone earning $200,000 would take a reduction of $3,250 (on the increment between $70,000 and $150,000) + $5,000 reduction (10% on the increment above $150,000) for a total salary reduction of $8,250 (4.125%).
Someone earning $250,000 would take a $8,250 reduction on the increment between $70,000 and $200,000) + $10,000 reduction (20% on the increment above $200,000) for a total salary reduction of $18,250 (7.3%)
This example is meant to be illustrative: If a sliding scale was deemed suitable in the 1930s, it should be deemed so today.