ANN ARBOR, MI –  On Tuesday, May 5th, HVALF delegates voted to launch a petition to build support for a collaborative, problem-solving response to the financial challenges faced by our region’s largest employer, the University of Michigan, as a result of the COVID-19 crisis.  The Huron Valley Area Labor Federation (HVALF) is a regional chapter of the AFL-CIO representing 20,000 workers from 50 affiliated local labor unions in Ann Arbor and the surrounding areas.  

Today, the HVALF launched its online petition drive to build public support for a cooperative problem-solving based approach to the U-M’s problems based on three principles — accountability, equity, and restoration — elaborated below.

The HVALF recognizes the tremendous challenges that U-M faces: the hospital and all of Michigan Medicine are under financial stress due to the pandemic. There is also great uncertainty concerning when it will be safe for students to return to U-M’s campuses.  In times of crisis, we can decide to come together to understand the crisis and devise the best responses to it, or we can let the crisis divide and fragment us.  We believe that a cooperative approach will yield much better outcomes than top-down unilateralism.

A necessary precondition for taking the cooperative road is financial transparency.   All stakeholders must understand the scale and nature of the problems that we are trying to solve, what has been done so far, and what assumptions are being made about the future.  “We cannot ask employees to make sacrifices to help solve the challenges we face without first opening the books and sharing financial information,” said HVALF President Ian ROBINSON.  “Without that information, workers cannot deploy their expertise to help find the best way forward,” he said.  “Moreover, if the Administration does not trust and respect workers enough to level with them about our situation, why would they trust that the Administration?”

The cooperative path also requires a commitment to fairness when it comes to burden-sharing.  On April 20th, University of Michigan President Mark Schlissel announced by email a unilateral pay freeze for all University workers not covered by a collective agreement. The email also announced that Schlissel and the Chancellors of UM-Flint and UM-Dearborn would take a 10% pay cut from May 1 through the end of the year, while 13 others (11 Executive Officers plus the Chief Diversity Officer and the Athletic Director) would take a 5% cut.   These cuts only apply to salary after May 1st, for 2020, so it’s really a 6.6% cut for Schlissel and the Chancellors, and a 3.3% cut for the other 13.  “It’s a serious mistake for President Schlissel to say reducing his salary to $840,000 this year is a real sacrifice for him, then turn around and demand concessions from frontline workers who make a fraction of that amount.” said Robin TARTER, Executive Director of the House Officers Association and HVALF Executive Board member.  “The announcement on May 5 that the CEO of Michigan Medicine will take a 20% pay cut in 2020 is a step in the right direction, but he will still be paid $1,120,000.  It’s hard for a custodian cleaning hospital rooms occupied by COVID-19 patients for $36,000 a year and risking her life every shift to see the CEO’s cut as a real sacrifice.”  

THREE PRINCIPLES FOR COOPERATIVE PROBLEM-SOLVING IN A CRISIS

Accountability – No decisions about us without us: Before asking for concessions from employees, President Schlissel must sit down with UM employees and their representatives and “open the books.”  Unless the Administration is willing to do this, it cannot make the ethical case for shared sacrifice.  Opening the books means providing details about (1) which units are losing money at what rate, and what share of those losses the units themselves are expected to absorb and what share will be paid by the wider university; (2) what COVID-related federal and state money has been received (or is promised) and how it has been (or will be) spent; (3) what share of the endowment can be used to help offset losses not offset by federal and state transfers; (4) what assumptions about the future are being made, on what basis; and (5) what sacrifices each UM stakeholder has already made or will be making, to address the shortfall identified in current estimates.  Beyond transparency, no plan should go into effect without prior discussion and approval by the Board of Regents.  The President is accountable both to the Board that the people of Michigan elected to set university priorities and to the workers/employees who make UM work, day by day, year after year.

Equity – Start at the top: President Schlissel must develop a plan that entails real sacrifice from those at the top, and from all stakeholders, before asking workers for sacrifices. Such a plan should employ the principle of progressivity: workers who earn less should be asked to cut a lower percentage of their smaller incomes.   And workers who have risked their lives for the rest of us during the COVID-19 crisis (doctors; house officers; nurses; maintenance, janitorial, cafeteria workers, etc.) should not be asked to make any further sacrifices: by putting their lives and those of their family on the line, they have already done more for the common good than anyone else.

Restoration – Make workers whole: Any concessions taken by workers (whether or not they are represented by a union) must be temporary, and their compensation must be restored to its normal level as soon as possible. No top university executive should have their salary restored, let alone receive a raise or a bonus, until every worker below that level has been made whole. 

A FEW RELEVANT SALARY STATISTICS

• President Schlissel’s annual salary before his “sacrifice”: $900,000/year
• President Schlissel’s annual salary after his “sacrifice”: $840,000/year
• Lowest salary of the 16 UM executives who will take small pay cuts: $350,000/year 
• Median full-time salary at UM: $67,205
• Salary of Executive VP for Michigan Medicine before his “sacrifice”: $1,400,000/year
• Salary of Executive VP for Michigan Medicine after the 20% cut announced in his May 5th email: $1,120,000/year 
• Salary of Registered Nurses, Levels A-E: $62,524-$109,616*
• Salary of House Officers I-IV: $58,576 – $68,260*
• Average salary in state of Michigan:  $58,000

*  These salary ranges do not reflect possible productivity bonuses.  

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