Growing Wage Gap at U of M Causes Real Hardship
Minnesota Health Plan
Information and Resources
by Senator John Marty
September 15, 2007

"I'm not trying to live in the lap of luxury; I'm just trying to get by. My family has had some medical issues and now we are losing our home in December."
-- a 33 year employee of the University of Minnesota

The current University of Minnesota strike is typical of labor disputes around the country. The workers say they need and deserve better wages, management says they cannot afford them.

As in every strike, management and labor see things differently. The University wants to count existing seniority pay adjustments as part of the increase that they are negotiating. AFSCME, the union representing the striking workers, points out that the seniority increases are already in their current contract, and that level of pay is already owed them. They say that the University, like the state, has always negotiated pay increases on top of the seniority increases and that the U of M did so again for another union just a few weeks ago.

Regardless of how one talks about the increases, when inflation is factored in, a new clerical worker starting at the University today makes about 5% less than someone taking the identical job in 2003.

These are not highly paid employees; they include some of the lowest paid workers at the University. They really need more money. The average clerical, technical and health care worker makes $34,000 per year. That is the average; starting workers make much less. One striking employee said that even after working at the U of M full-time for 11 years, his family of four qualifies for food stamps.

This worker is not alone. A survey of these employees two years ago found many were struggling financially. There were workers who skipped doses of their medications, who couldn't pay their monthly rent, who borrowed money to buy food. Others put their kids on the free school lunch program and rely on energy assistance to make ends meet.

A 12-year employee said she used vacation time in order to work more hours at her second job. She was one of many who relied on a food shelf to supplement her family's diet.

Just as poignantly, several talked about what they could do with better compensation:

--"I could stay on top of my monthly bills instead of constantly picking out the most important ones each month, and pushing the others back months. Monthly bills increase in the winter."

--"(I would) save money. That is my main concern -- not being able to save for my family’s future, and that is what scares me the most."

Ironically, many of these people who work for the University of Minnesota could not afford to send their own children to school there.

The employees point out that the legislature appropriated funding for 3.25% increases, but the University says that it cannot afford that much for the AFSCME workers. President Robert Bruininks said, "We believe we have a fair offer out there, and we believe we have to run the University in a way that is responsible to all of its employees."

Last year, the university president's salary was $384,000. That is more than the average striking worker makes in a decade.

On top of that, his compensation package included an additional $150,000 that he receives in deferred compensation, for a total of $539,000.

Everybody expects the University President to receive good compensation. But this year, his salary increased by $39 thousand, and his deferred compensation jumped an additional $25 thousand, bringing his total compensation to $598,000. That works out to be a 12% increase this year. Just the increase in his compensation, $64,000, is almost double what the average striking worker makes in a year.

This does not meet Bruininks' own criteria that the University be "responsible to all of its employees." It is easy to see why the AFSCME workers feel they are treated unfairly.

The growing income gap between workers and management is certainly not unique to the University. Northwest Airlines workers recently had massive wage and benefit cuts imposed on them to help the company get out of bankruptcy. As the airline was emerging from bankruptcy on the backs of its employees, Northwest CEO Doug Steenland and other top executives took multi-million dollar bonuses.

The number of people struggling to find affordable housing and health care continues to grow. The wage gap between employees and management continues to grow. There is a connection.

People know this is happening in Corporate America. But we expect better from the University of Minnesota.

President Bruininks and his Administration are paid to make some big financial decisions. It is sad that they appear blind to the impact of their actions on the lives of their own employees.


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