THE LIVING WAGE CAMPAIGN AT BUCKNELL
TO: BUCKNELL FACULTY
FROM: BCEJ/PULSE
DATE: October 1, 2002
A SUMMARY STATEMENT
At the September faculty meeting, some faculty members requested that BCEJ/PULSE respond to the report by the Committee on Planning and Budget (CPB) concerning a living wage at Bucknell. These faculty members wanted our response in order better to understand living wage issues, which will be taken up at the October 7th meeting. At that meeting, faculty will consider a motion proposed by Paul Susman and supported by BCEJ/PULSE to institute a living wage for all Bucknell employees. This motion follows below, with a summary of reasons for it. More details follow the summary statement.
Motion: Instead of the four-year delay in eligibility called for in the Planning & Budget Committee report, the faculty recommends to the President the immediate implementation of a wage floor of at least $9 per hour (annually adjusted for inflation) for all Bucknell support staff (including dining services).
BCEJ/PULSE Reasons for Supporting this Motion
Declining Real Wages for 2 Decades. Communities and campuses around the country are enacting living wage policies due to the erosion since the 1970s in the real value of wages, including the minimum wage, and the poverty that results from such low wages.
A Living Wage. In the local area, on average, $10.54 per hour (including benefits) is the minimum amount each adult in a family would need to earn in order to pay their bills.
Why We Propose a $9 Living Wage for All Workers. Though the $9 per hour wage floor suggested in the CPB report is considerably below a living wage, we propose it for all workers because we believe that advocating a $10.54 living wage is not politically feasible at this time. However, we reject the portion of the CPB report that requires a four-year waiting period before one is eligible for the $9 wage and object to its failure to provide for subcontracted workers because these two contingencies cause the CPB $9 proposal to exclude most low-wage workers at Bucknell.
Wage Compression. A minimum living wage will create wage compression, and some employees currently making around $9 may resent those with less experience making the same wage as they do. BCEJ supports a living wage accompanied by other raises that minimize the problems that might arise from wage compression.
How Much Would it Cost? It is not possible for us to estimate the cost of
a living wage. VP Lema told us she would give CPB the data necessary to make
these calculations, but refused our request for a copy. In 2001, BCEJ/PULSE estimated that a $9 living wage
at Bucknell, with a dollar added on for benefits, would cost about $500,000,
and that it would affect about 230 employees then making less than $9/hr.
We did not estimate costs of overcoming compression. For more information,
questions should be directed to VP Lema and to CPB.
Ethical Dimensions of Our Campaign. We believe that Bucknell deludes itself when it claims in its Mission Statement that we seek to construct practices that reflect "compassion, civility, and a sense of justice.” Despite this dreamy view, last spring Bucknell spent $360,000 raising the wages of the highest paid professors while numerous Bucknell employees were making far less than a living wage. For us, the principal ethical dimension of our campaign is simply this: it is wrong for a rich university to live off the backs of workers who don’t make enough to get by.
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October 1, 2002
Dear Members of the Faculty:
At the September faculty meeting, some faculty members requested that BCEJ/PULSE respond to the Planning and Budget Committee report (contained in an April 26 letter to President Rogers) about our living wage proposal. More specifically, faculty members at the meeting, and afterwards, asked us to explain our living wage proposal, its rationale, and its likely costs, and to do this either at a special faculty meeting on in a written report. The student and faculty members of BCEJ/PULSE decided to prepare this report, and we urge all faculty members to read it before the October faculty meeting when a motion to recommend immediate implementation of a living wage will be on the agenda.
Since 1994, when Baltimore adopted the first living wage ordinance, cities and/or counties have adopted about 80 such ordinances, and another 80 city campaigns are underway. Along with our own at Bucknell, about thirty living wage campaigns have emerged at universities and colleges. The BCEJ/PULSE campaign is therefore part of a national movement that will likely grow because the conditions that produced it, described below, are not likely to change in the near future.
The living wage movement
responds to a complex mix of national and international economic forces that
have “flattened” real wages for most
The living wage movement focuses on the low end of the labor market, so it is worthwhile to describe some of the influences suppressing wages there. The federal “minimum wage,” which is the most widely known lower limit for many jobs, declined in real (adjusted for inflation) terms after 1980. For most years after 1980, the federal government refused to increase the minimum wage, even though consumer prices steadily rose. Here are the consequences (in constant 2000 dollars):
Average Minimum Wage, 1965 - 1980: $6.83
Average Minimum Wage, 1981 - 2000: $5.30
A number of government and scholarly studies show that this decline in the real value of the minimum wage helped to depress wages, and to increase poverty rates, for workers in relatively low skilled service industries. For example, the current minimum wage is $5.15, or $10,700 a year for full-time work. However, the federal government’s poverty level for a single parent with one child is $11,940, well above what one can make with minimum wages. And, as we shall explain below, this poverty level of $11,940 is far, far below the more realistic income needs of a single parent with one child. (For those wanting less abstract notions, and more details, about life for workers trapped in these low wage markets, we recommend Barbara Ehrenreich’s widely acclaimed book, Nickled and Dimed, Henry Holt, 2001.)
In 1998, the Census Bureau published a breakdown
of wage earners in the
Additionally, during the 1980 to 2000 period, the proportion of workers in labor unions declined from 19% to 9.8%, making it ever more difficult for low-wage workers to seek help from organized labor. (In this context, it is worth noting that we started the BCEJ in response to a misleading and threatening letter the administration sent to all food service workers in 1999 when a few of them contacted a union organizer.)
In the spring 2000 semester, some members of our group did course work in which they sought to estimate the cost of living in our area and how the adoption of a living wage might affect Bucknell. For their study, they requested, and got, anonymous data on wage rates for Bucknell’s non-supervisory staff from Peggy Plympton, then VP for Administration and Finance. In our analysis of that 1999 data, and using a $9 living wage figure the students in the course had recommended, we estimated that 230 Bucknell employees, most of them in dining services, made less than a living wage. That is, most earned less than enough to cover necessities without needing public or private assistance. Our analysis of the data, and other aspects of the way support staff are treated at Bucknell, led us to launch a living wage campaign in late 2000.
In April 2001, at the suggestion of a member of the CPB, we sent materials to the Committee asking that it study the feasibility of a living wage at Bucknell. Soon after, a contingent of us spoke to President Rogers about our living wage campaign, and he agreed to write a letter to the CPB supporting our request for the feasibility study. The Committee did not take up the matter until spring 2002, because it had other matters before it and because it delayed its consideration of a living wage until three newly elected support staff members could join the Committee. In April 2002, at the Committee’s invitation, three of us appeared before it to explain the BCEJ/PULSE proposal. Its chair had asked us to comment on the ethical dimensions of our campaign, our method of calculating the updated $10.54 living wage, and details about other living wage campaigns.
Our Calculation of the $10.54 Living Wage
We based our calculation of a $10.54 living wage, plus benefits, on data from the 2001 Self-Sufficiency Standard for Pennsylvania, the latest of the annual reports by the Women's Association for Women's Alternatives (WAWA).(2) We have put a copy of this report on The Catalyst web site at: http://www.orgs.bucknell.edu/catalyst. We consider this report--which is endorsed by the United Way--the most comprehensive and fair-minded assessment of living costs available. The report presents data by county, and for different family compositions, on what WAWA defines as a “self-sufficiency wage,” one that allows a family to pay its bills without needing public or private assistance. The wage includes estimates of the following costs: housing, transportation, health care, food, utilities, and taxes/tax credits. The “health care” costs here would include co-payment on employer provided health benefits.
We used the 2001 WAWA estimates to look at two different families. One of these had one full-time working adult and one preschooler, and the other had two full-time working adults and two children. Then, we used a weighted average of the cost of living based on where Bucknell staff employees lived in 1999, information also included in the data from VP Plympton. We found that about 60% live in Union County, 34% live in Northumberland, and 6% live in Snyder County. Looking at the table below makes it clear, we hope, how we arrived at this $10.54 figure.
| 1 adult + 1 preschooler |
2 adults + infant+ pre-schooler |
Average |
|
| Union County (60% Bucknell staff employees) |
12.78 |
9.68 |
11.23 |
| Northumberland (34% Bucknell staff employees) |
10.31 |
8.66 |
9.49 |
| Snyder (6% Bucknell staff employees) |
10.37 |
8.80 |
9.59 |
| Weighted Average Value |
11.80 |
9.28 |
10.54 |
In 2001, BCEJ/PULSE estimated that a $9 living wage at Bucknell, with a dollar added on for benefits, would at that time cost about $500,000, and that it would affect 230 employees. We have not tried to calculate the present cost of a $10.54 living wage because we do not have the necessary information (and more about that below). However, as we have learned, it is not particularly helpful to estimate the cost of a living wage that sets a minimum level but does not take into account what is called “wage compression.” Over the past two years, our research, and our conversations with support staff members, made us realize that at Bucknell wage compression would create resentment and fear among some staff members. The resentment would be an understandable response to a situation in which someone new on the job is being paid the same as others who have more experience and more time in service. Staff workers expressed concern that if more money went to new and/or low paid workers, less would be left to pay annual raises for everyone else.
What then would a “full” living wage campaign cost, one that brought everyone up to $10.54, or to the $9 wage announced by the CPB, and that would, at the same time, limit problems caused by wage compression? In our efforts to determine that figure, and before we met with CPB, we requested updated wage data from VPAF Jo Anne Lema. We assumed that she would give us that data because her predecessor had provided it to students two years earlier. VP Lema refused on the grounds that it was possible to infer from the data the identity of a very small number of workers whose wages were listed on it (although these few cases could easily have been omitted from the data as VP Plympton previously chose to do.) While she would not share the data with us, VP Lema assured us, however, that the CPB would have access to the data in its consideration of our request, endorsed by the President, to study the feasibility of a living wage.
Because we don’t have the data, the only evidence we have about the probable cost of a full living wage campaign is anecdotal. This figure comes from a student forum in 2001, where an administrative officer estimated that such a full living wage would cost $4 to $5 million a year. However, for a credible estimate, one would need to look at current wage data and determine what kind of raises, and for what number of people, would appear fair and reasonable to most people. Clearly, there is no way to alleviate wage compression that will satisfy everyone. Living wage campaigns that seek to adjust for wage compression typically recommend raises to those who are paid up to two dollars more than the living wage that is instituted. In any case, since they are the ones who have the numbers, VP Lema and Ben Marsh, the Chair of CPB, will need to answer questions regarding costs of alleviating wage compression.
In 2001-2, the operating budget at Bucknell was $135 million. The probable annual cost of a simple wage floor of $9 at Bucknell would be in the neighborhood of $500,000, or less than one-half of one per cent of the total budget. The administrative estimate of $4 to $5 for a full living wage campaign would have amounted to 3 to 3.7% of the annual budget during 2001-2002. However, as we have said above, unless one has the current spreadsheet on the wage structure, and for other reasons suggested below, one cannot know the actual costs of these two versions of a living wage.
Living wage campaigns in the
The BCEJ/PULSE Response to the CPB’s Recommendation
Needless to say, we were disappointed in the CPB recommendation to establish a $9 wage floor after a person has received satisfactory job performance reports for four years. By its own account, the CPB action will leave 15% of Bucknell’s 500 non-supervisory support staff making far less than many of them will need to live on. In addition, this 15% does not include the food service workers now employed by the dining services subcontractor, Sodexho (a large French firm that recently bought the Wood Corporation.) Last year, food service workers were given an option to become employees of Wood, and some of them did because they were allowed to buy into heath care plans denied them by Bucknell. Because we do not know how many food service workers the subcontractor employs, and how many of them make less than $9 an hour, the CPB’s 15% figure is misleading. Yet, whatever is that number, the BCEJ/PULSE living wage proposal and the motion on the faculty floor includes all Bucknell employees, including those now employed by Sodexho and other subcontractors.
The Committee’s recommendation of a four-year waiting period before one is eligible for the $9 wage seems more than “somewhat arbitrary,” as the CBP describes it. It is unusually long, perhaps a world record probation period for workers in relatively low-wage industries. The Committee also tells us that those affected by the raises they did propose (given in July of this year) were a mere handful, and that the raises would not have a significant impact on the overall budget. This mere handful, of course, raises the question of whether the parameters involved -- $9 and four years – were determined by some kind of socioeconomic argument, as is sometimes implied in the Committee recommendation, or simply as a way to end up with a small number of people eligible for a living wage. What would be, for example, the cost of a three-year waiting period? Or a one-year waiting period? Or a six-week period, which seems quite reasonable for most low-wage job markets? And how many workers would have their wages increased in each such case?
We also were disappointed that, while the CPB sent its report on the living wage to the President on April 26, the Committee never sent its report to us, despite it’s being our proposal (endorsed as the subject of study by the President) to which it was responding. Like everyone else, we learned about the Committee’s report only when it attached a copy to the agenda for the September meeting. This past summer, a food service worker “thanked” us for the wage increase a friend had just received, and we could only wonder about what she meant. Our group had serious doubts all along that a living wage recommendation would come from a committee that included Bucknell’s top five administrators, after the president: the VPs of Administration/Finance, Academic Affairs, and Students Affairs, and the two academic deans. Thus, while we were disappointed with the Committee’s recommendation, it hardly surprised us.
As we have written above, for us the ethical dimensions of our campaign are centered on a simple principle: it is wrong for a rich university, one that brags to the world about its commitment to justice and civility, to live off the backs of workers who don’t make enough to get by. That is why, as we also stated above, we don’t intend to back away despite this disappointing report from the Committee on Planning and Budget.
1. All the numbers is this section are taken from U.S. Census Bureau, Statistical Abstract of the United States, 2001.
2. In producing these annual studies, WAWA is supported, among others, by the United Way, the U.S. Department of Labor, First Union Bank, PA. Dept. of Community Economic Development, and the following foundations: Rockefeller, Ms., William Penn, Samuel S. Fels, Barra and Cassett.
3. David Newmark, “Do Living Wage Ordinances Reduce Urban Poverty?” National Bureau of Economic Research, Working Papers 7606, 2002. A good review article of the major studies is by Daniel B. Wood, “’Living Wage Laws’ Gain Momentum Across US,” Christian Science Monitor, 3-15-02. (http://www.commondreams.org/headlines02/0315-01.htm)