Bruce's Blog

Dec. 12, 2009

Many of us would prefer to take a salary cut rather than have positions of colleagues eliminated. Is that being considered on a mandatory or voluntary basis?

Actually, several people have recently raised this question. The motives are laudatory and I share them: next to protecting core mission and its quality, protecting occupied positions is our next explicitly stated budgeting priority.

And, believing in “bottom up,” if that is what we all, together, decide is best, then that is what I would include among budget recommendations it is my responsibility to bring before the Board of Trustees. But, only after losing the argument with you, colleagues, for I think this is a poor approach.

Some states are experimenting with furloughs. This is tantamount to a salary reduction. But, it would seem less objectionable than an outright cut because it does not permanently affect base salaries.

One big problem with furloughs is that they do not really work in a university. A state office like the DMV can be shut one day every two weeks. It is visible, inconvenient, and there are savings. We cannot do the same with a university: e.g., close the university and cancel classes one day every two weeks. At least not and credibly maintain that the credits awarded and degrees granted are still the same.

Some say, “well, just take the furloughs when classes are in session.” That’s simple exploitation. That really is cutting people’s salaries: paying less for the same results. There are federal laws against that.

There is another problem with the furlough approach. Temporary reductions in pay might make sense if we faced a crisis that was temporary in nature. That is not what we are looking at. The current fiscal shortfall is going to grow over future biennia, not decline. So furloughs – while a nightmare to try to make work in a university – are, at best, a short-term approach and that is not the nature of the challenge before us.

Base salary cuts? We are a talent-based enterprise; competition for talent is going to become much more intense in the decade ahead; while salary is not everything, our salaries must be competitive; we have had to fight to get to our current salary levels and they are not yet competitive; so, base salary cuts would reconcile us to a very different vision – no longer premier – and to a very different future.

How about voluntary salary cuts? One colleague just wrote to me indicating an intention to do so. Turns out that that is more difficult to do than it might seem. There are lots of contractual roadblocks as well as statutory obligations the university faces: don’t take all your paycheck and the feds could be on our case no matter how voluntary. So, I suggested doing what so many of us already do: direct a portion of our paycheck to the Foundation for purposes of top priority to us. In the case of this correspondent, it was assistance to financially strapped students that was the motive and the Foundation approach fit well.

Now, salaries can be voluntarily reduced if there is a corresponding reduction in employed FTE. This is, really, the furlough approach in a different guise along with the same challenge: short-term savings for a long-term, recurring problem. By the way, there is a certain lore several of our most long-serving colleagues shared with me that, during the budget crisis in the ‘70’s, faculty and staff voluntarily reduced FTE to address much of the problem. Memory is a funny thing but, when I asked to have it researched, I was told that not many elected to participate and that the funds saved, relative to the size of the predicament, were not consequential.

Your mileage on all this may well vary. But, seems to me that we must find long-term adjustments to a long-term problem, not damaging our greatest core strength: the continuing high quality of our faculty and staff. It is appropriate to use shorter-term, more “expedient” reductions in the short-term in order to buy time. We will do a bit of that next year. But, it is only appropriate if we, together, use the time we have bought to find longer-term, strategic approaches.

Bruce

 

 

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