I have spent some time over the last two evenings analyzing Mark Yudof's proposal for UC pay cuts/furloughs. What I have found is troubling. The proposal tilts heavily against low wage earners. I think there are obvious better solutions, two of which I propose here.
Graduated Approach Biased Against Low Wage Earners
Although the proposed cuts are "graduated", an unnecessary burden is placed on those with lower salaries. Cutting more from the top makes more sense all around.
1. When your monthly gross salary is around $1,600 (Tier 1), a $70 pay cut is significant. It can force decisions like whether to buy food or pay an electricity bill. As we will see below, UC doesn't really need to take those $70 from you.
2. If, on the other hand, your monthly salary is anywhere from $16,000 to $40,000 (medians in Tiers 6 and 7), what difference would the cut make? Maybe your part time personal chef will have a "furlough" day as well, or you might have to spend your vacation in Athens rather than Paris.
3. The graduations are weak: Those making 10 to 25 times more than the lowest tier only have 2.2 to 2.4 times the pay cuts, proportionally.
Other Solutions are Available
For the sake of this analysis, let's assume that salary cuts (i.e. furloughs) are the appropriate response to this financial problem. One can make a convincing argument against that idea, but for now I will leave that aside.
I have created two alternative proposals, as examples of how the same shortfall could be accommodated with much less effect on people's lives.
Note how easy it would be for the higher salary tiers to absorb most of the cuts proposed for the lower tiers, without much effect on the lives of those with higher tier salaries. An extra $300/mo from a salary of $10,500/mo, or $800/mo from a salary of $37,000/mo, could drastically reduce the effects on lower wage earners. Even those in Tier 4 can be cut less, if those with extravagant salaries will put in a bit more.
In fact, the first three tiers in Yudof's proposal could avoid pay cuts altogether if the upper 4 tiers would accept modestly higher monthly cuts. There is little reason to cut the wages of those with lower salaries.
See For Yourself
You can obtain the spreadsheet I used to make these calculations from the email address below. Feel free to play around with the numbers. You will quickly see that Yudof's proposal masks unfair cuts with a language of fairness.
I welcome your thoughts, but I suggest that action is better. Contact UCOP. Better yet: If you're represented by a union, use it.
Answers to Predictable Questions/Arguments
"But we need to be fair."
- It takes only a few seconds of thought to realize that the proposed cuts will have a much larger effect on the lives of lower wage earners than on those of higher wage earners. We should not confuse fairness with a numerical/statistical illusion of fairness.
"But we need to stay competitive."
- As I demonstrate in my proposed alternatives, the extra sacrifice by high wage earners would be almost unnoticeable.
- I'm sure most of us realize on some level that the myth of the "highly valued executive" is reaching its end in our society's collective consciousness. Let's face it: Highly paid administrative positions don't require rare talent. They would still be highly paid, and there will always be people who want the jobs.
- As for other very high wage earners, e.g. coaches and certain medical professionals: They would still earn a lot. Just slightly less.
- Yudof already proposed 24-26 for the highest tiers. And I submit that temporary salary cuts may be more appropriate than furlough days, especially for high wage earners.
"This is unamerican."
- Red baiting is so passé.
Data Methods and Caveats
1. I used the Sacramento Bee's data on UC salaries in order to measure the number of employees in each of Yudof's proposed tiers. In order to approximate the number of employees in each of Yudof's tiers, I linearly interpolated the ranges in the Bee's data. (The Bee has totals for those earning <$30K, $30-40K, $40-50K, $50-60K, $60-70K, $70-80K, $80-90K, and >$100K. I hand-counted the number of people in the $100-240K and >$240K tiers. See spreadsheet for details.)--
2. Estimates of savings and salaries were made using the median of the low and high ends of each salary tier. This assumes a normal distribution of salaries within the range, which may (for example) slightly underestimate the actual savings from Tier 1 cuts. It may also underestimate savings from higher tier cuts as well. But on the whole the numbers are meaningful, especially given how little Yudof's Tier 1&2 salaries affect the budget in general.
3. I chose an upper limit of $750K for the highest tier somewhat arbitrarily. Some people earn more than that, but not too many. The goal was to make the median of the highest tier more representative.
4. The estimates mentioned most certainly introduce some element of error into the calculations; however, the foundation of the analysis is strong, and any errors introduced are unlikely to be significant.
Programmer/SysAdmin, Hart Interdisciplinary Programs, UC Davis
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