Living Wage at the University of Virginia

by David Swanson

[Editor’s note: This campaign is an example of a number around the state of Virginia which are using public action to leverage better pay for low-income workers. Most focus on governmental or public institutions, since they are to some degree influenced by our democratic process

Living wage campaigns as a national phenomenon are growing rapidly. Over 30 cities, counties and school boards across the nation have passed explicit living wage ordinances raising the minimum wage for anyone employed directly or indirectly by that body. These wage rates vary, but often they are designed to keep a full-time worker’s family of four out of poverty.

Many living wage ordinances stipulate that the minimum wage level will be adjusted for inflation and cost of living annually. Other cities have raised their wages as a result of living wage campaigns without adopting such an ordinance, merely paying everyone a certain wage or above. Charlottesville gave its city employees a living wage raise on April 15th of this year.

A major argument for paying workers a Living Wage is that it allows them to feed, clothe and house their family. The official national poverty line is based on a 1950’s calculation and is set extremely low. Nobody will ever get rich off a living wage, even in a multiple-earner household. But it is a quintessential family-values policy.

People will also be able to live better lives, work more productively at one job by dropping second and third jobs, and receive more loans and credit from banks. They will depend less on food stamps, earned income tax credits and Medicaid in order to get by.

This living wage movement is happening at a time when the television news tirelessly informs us of our “healthy economy.” It is happening because, while the rich have gotten richer over the past decades, the poor have gotten poorer. Unemployment is at a record low, but so is the income of the least-well-off, and the size of the middle class. The federal minimum wage is 26 percent lower now than it was in 1980 (after adjusting for inflation). It is 30 percent lower than in 1968, although the economy is 50 percent more productive. The gaps between the wealthiest and the average, and between the average and the poorest, incomes in the U.S. have grown dramatically. We have recently been throwing people off welfare, and to many it seems a good idea to pay them decent wages for their labor.

As of 1997, 7.3 million families in the U.S. were officially poor. In 66 percent of these families at least one person had at least one job. At $5.15 per hour (the federal minimum wage) a person working full-time for 50 weeks earns $10,300, which is below the national poverty line for a family of two and nearly 40 percent below the poverty line for a family of four ($16,450). In other words, we, the citizens of the world’s richest country, are willing to see some of us work full-time and earn only 60 percent of the pay that we have ourselves described as minimally sufficient. Yes, there IS hunger, lack of medicine, and unsanitary living conditions right here in the USA.

One battle in the campaign to help the poor in our state is taking place at the University of Virginia (UVA) in Charlottesville. A group of students, professors and staff at UVA have organized a Labor Action Group and gained the support of many local organizations, including the Public Housing Association of Residents (PHAR) and the Charlottesville NAACP.

The starting salary for UVA housekeeping jobs is $13,250 per year ($6.37 per hour). Those hired through the contractor Servicemaster are paid $12,480 per year ($6.00 per hour). These workers and many others at UVA live in poverty. They are obliged to take second and third jobs and to rely on food stamps to survive.

In contrast, UVA’s president takes home over $400,000 per year including benefits and pay from outside boards. This is over 30 times the salary of some of his employees. And faculty salaries have increased more than twice as fast as staff’s over the past 15 years. UVA’s President John Casteen and Chief Financial Officer Leonard Sandridge have each admitted that employees’ salaries are insufficient. They have not proposed any steps to remedy the situation.

The university has in recent years been spending enormous sums of money on (among many other things): expansions to the law school and the business school, a new bookstore and parking garage, new tennis courts, repair of balconies on the Lawn, a remodeling of Newcomb Hall, the construction of an office park near the airport and another near campus, a bail out of the QualChoice health plan, and the expansion of the football stadium (this alone cost $75 million), with plans to build a new basketball stadium at a cost of over $75 million more. The Board of Visitors last year raised its fundraising campaign goal from $750 million to $1 billion. According to a Richmond Times Dispatch article May 3, 1998, UVA, Virginia Tech and Virginia Commonwealth University have seen their private funds quadruple from their levels a decade ago, with UVA in the lead holding private reserves in excess of $1.7 billion. This is in addition to the $1 billion being received in donations.

According to Thomas Gausvik, UVA’s Chief Human Resources Officer, Scott Stadium, the QualChoice bailout, the North Fork Research Park and faculty raises have all been covered by “private funds or clinical reserves,” not state funds. Gausvik also states that UVA has been given authority from the state to raise faculty salaries (with private funds), but has not been given authority to raise salaries for “classified employees.” In other words, if this is true, Richmond is giving UVA little money (14 percent of its budget) but is forbidding UVA from spending its own money on certain things.

Many economists suggest that it is good for business to pay employees enough so that they can purchase more goods and services. And studies of living wage ordinances, such as Baltimore’s, have shown that declines in turnover rates and the expense of interviewing, as well as increases in morale, go some distance toward balancing out the expense of paying a decent wage.

The Living Wage ordinance in Los Angeles raised workers’ disposable income by 50 percent and cut their dependence on government charity by 40 percent, while costing companies on average 1 percent of their budget (before calculation of resulting gains). The city of Chicago spent the same amount on a Living Wage as it spent on lights and flowers for a Democratic Convention. UVA’s budget and turnover rates are both unusually high. So the interests of neither the state’s economy nor UVA’s bottom line would seem to be motivating this government-imposed poverty.

UVA has (whether due to moral pressure, cynical calculation, or economic enlightenment) professed a desire to pay higher wages using its own ample supply of money. Few Virginians will argue that Richmond shouldn’t let UVA do so.

Although President Casteen and others have stated that workers are allowed to assemble and to protest, misconceptions prevail, even among university officials. For example, in the student newspaper, the Cavalier Daily, February 4, 1999, the Board of Visitors Secretary Alexander Gilliam was quoted as saying that the idea of faculty representation on the Board of Visitors “came close to violating Virginia’s strict rules about state employees not belonging to a union.” There are no such rules, and many state employees currently are members of unions.

In April of 1998, LAG announced its campaign for an $8 minimum wage. Students can be seen around campus wearing orange and blue “$8” buttons. Apparently some employees at UVA Hospital have been discouraged from wearing these buttons.

LAG members hope and expect that raising the minimum wage to $8 will lead to proportionate raises for some of those already earning over that amount.

Ultimately LAG hopes to alter employer-employee relations at UVA so that employees become better able to achieve their goals in the future.

Early responses from university officials to the $8 campaign claimed that UVA bases its rates of pay on the rates currently paid by other employers. One problem with this is that, as the largest employer around, UVA sets the current market standards.

“The university appears to be an employer of choice in this region,” Gausvik wrote in the Daily Progress August 30, 1998. But the extremely high turnover rates in some departments suggest less than overwhelming satisfaction on the part of the workers who come and go. And those who stay in many cases report that they do so only for lack of something better. In any case, Gausvik has written in a memo that UVA’s pay rates are below those of other employers in the region.

In the same article quoted above, Gausvik argued that UVA’s employees didn’t have it so bad, and also that “Unfortunately, the university does not have the authority to change the pay scale of the classified pay plan without authority from the state.” If this is “unfortunate,” then everything must not be well. This passing of the buck to Richmond has in recent months been the theme sounded by university officials.

Many employees at UVA are hired by private contractors who set their own pay rates, and UVA has the authority to make these contracts. If the university wants its employees to be paid a living wage, it can begin by contracting only with employers who pay one. Currently this is not UVA policy.

By applying public pressure to the university administration and the Board of Visitors, LAG hopes to encourage UVA to take those steps that it indisputably can take: contracting work only to employers who pay a living wage and lobbying Richmond to raise wages or pass a living wage statute.

Many professors and students say that they are becoming increasingly ashamed to work and study at UVA because of the standard of living endured by hundreds of the employees who keep the place running.

President Casteen has recently said that he hopes the Living Wage campaign succeeds. He can do more than hope. For studies of the effects of living wage laws, see a 1998 book called The Living Wage by Pollin and Luce, or contact the Political Economy Research Institute at the University of Massachusetts at Amherst. You can find out more about the UVA Living Wage Campaign at the website, www.people.virginia edu/~cms5x/lag.