In June, the Washtenaw Community College Board of Trustees approved a salary increase of 1.5% for Independent Staff. While a 1.5% salary increase is extraordinarily generous, the inflation rate in June, July, and September was 5.4%. (It was 5.3% in August.) Currently, the core inflation rate is 4%, and food inflation in September was 4.6%. In fact, food and housing cost increases accounted for more than half of the rise in September’s inflation. Economists predict October’s inflation rate to be 5.5%, the highest rate recorded since July 2008.
In context, the College has received nearly $40M in federal COVID-19 relief. (Federal rules require that a certain percentage of the funds must be distributed directly to students.) And, of course, the College helped itself to $4M to cover the Health and Fitness Center losses.
With core inflation at 4% and the College’s salary increase at 1.5%, Independent staff are taking a 2.5% pay cut for the privilege of working at WCC. Custodial and Maintenance staff, the OPTs and the faculty all receive compensation via union-negotiated contracts.
Inflation can be particularly hard on the lowest-paid employees. For example, core inflation of 4.4% in 2021 would reduce the pay of an employee who makes $50,000 per year by $1,450 after factoring in the extraordinarily generous 1.5% salary increase. That’s a loss of more than $120 per month.
For the last several years, WCC has increased independent employees’ compensation by 1.5% per year. In the past decade, the average inflation rate has been less than 1.5% just four times. In other words, WCC’s annual salary increases offset inflation only infrequently. There is a risk to being cheap when it comes to salary increases. In those years when inflation rises significantly, some workers simply cannot afford to remain on the payroll.
Rising inflation rate can deal double damage to College
The generosity of the US taxpayer has made it possible for WCC to recover the losses it suffered as the result of the pandemic. The Board of Trustees should consider providing the lowest paid employees at WCC (union or non-union) with additional one-time compensation to lessen the blow of inflation. An appropriate offset would be 2.5%-3% of an employee’s annual compensation for those making $75,000 or less per year. For those earning between $75,000 and $100,000, an appropriate offset would be 1.5%-2%.
There’s actually good reason to adjust salaries in times of high or rising inflation. For the lowest paid employees, lousy raises plus inflationary losses make it very easy for employees to look elsewhere for work. That creates a lot of turnover among employees whom WCC most likely cannot avoid replacing. According to 2021 surveys of employers by Glassdoor, the hiring process will cost $4,000-$5,000 per new employee and will require approximately 60 days to fill an open position. Offering an inflation offset will help WCC retain qualified staff and reduce productivity losses associated with staff turnover.
The current WCC administration has made it a practice to minimize staff salary increases while heavily padding the College’s “rainy day fund.” (For some reason, executive hiring is excluded from this austerity plan.)
It is time to provide adequate compensation to the staff.
Photo Credit: ekornblut, via Flickr
