Salary Negotiations and Total Compensation Costs
Barbara Altmann, Vice Provost for Academic Affairs and Professor of French
March 19, 2013
Earlier this week, United Academics notified the University it would not accept the University’s offer to implement immediate across-the-board raises and possible merit increases for fiscal years 2013 and 2014. Instead, the Union is choosing to negotiate all components of salary for all three years of the contract as a package. The University decided to make this offer for immediate raises totaling $12 million—even though the University’s financial picture in FY14 is less than clear—to address the undisputed fact that salaries need to rise.
In response to the Union’s decision, the University is moving forward with plans to process the FY13 increases for unrepresented faculty and FY14 increases for unrepresented faculty and officers of administration. Those more than 1,500 employees should not have to wait for their pay raises until a contract between UO and unionized faculty is complete.
At the March 19 negotiation session, United Academics submitted its own comprehensive salary proposal that includes fiscal years 2013, 2014, and 2015. The University agrees with the Union on the need to compensate faculty fairly and competitively. Nevertheless, as the University has said to the Union, it cannot responsibly negotiate a comprehensive salary package, particularly for FY15, without understanding and negotiating the total cost of all the Union’s economic proposals, as well as the costs of implementing the Union’s contract proposal as a whole. For example, the Union has made proposals for increases in paid leave, sabbatical pay, and funds available for professional development, as well as for a significant amount of release time for its members to work for the Union. All of those add to the costs associated with the Union’s proposals for faculty raises. The many components of faculty compensation must be evaluated and considered together as the University develops its response to the Union’s compensation demands.
The University cannot make promises to increase faculty compensation unless it can be reasonably sure that it will have the recurring revenue to make good on those promises, not only through FY15, but thereafter, too. Accordingly, the University has to consider the Union’s proposals for increased compensation in light of the resources it can reasonably expect to have available in future years. The University has two main sources of revenue available to pay faculty salaries: state support and tuition. We do not know what level of state support the University will receive for FY 14 or FY15. What we do know is that the support we receive from the state per full-time student has continually decreased and is significantly lower than that received by our peer institutions.
By the way, we also know that despite reductions in funding that have left Oregon’s universities behind (we’re 46th of the 50 states in state support), we do a great job for our students and consistently rank among the top ten states with the lowest costs for achieving four-year degrees.
Negotiators for United Academics said at the table that they neither want nor expect tuition increases to cover their increased compensation demands. Nor do we. But given that the University has finite resources, where are the dollars for increases in faculty compensation going to come from? We can’t ignore the many high-priority demands on the revenue available to this chronically underfunded institution.
We know, for example, that PERS and PEBB costs are estimated to increase by an estimated $17 million next year. We also expect to incur at least $2 million more in recurring costs next year by hiring additional tenured faculty. And we know that we will need to spend millions more for IT infrastructure and other campus improvements. It would be irresponsible for the University to agree to a multi-year compensation proposal before knowing the total costs and negotiating as a package all of the proposals involving increased costs.
The bottom line: The University made its 2013 and 2014 salary proposal in good faith. The funds will remain committed and the offer remains on the table as the University continues bargaining economic issues with the Union.
