Subject: 13 Reasons to Reject LCC Salary Take-back!

Date: Tues, 13 Feb 2001 02/13/01 09:18AM

From: "Jim Salt " <saltj@lanecc.edu>

To: LCC Faculty

1. Effects on Individual Faculty Members Salary: More than 100 fulltime

faculty employed at LCC last year failed to receive expected step increases

to their salaries this year. A careful examination shows affected faculty

members would lose an average of $1,842 this year, and, since they would be

a step behind until they reach the top step, an average of $8,886 in total

salary over the years to come.

2. Effects on Individual Faculty Members PERS Retirement Account: While

the final impact on their salaries and retirement funds will reflect the

number of years they work before retiring, the performance of PERS, and the

rate of inflation, faculty members will also see a significant hit on their

retirement accounts. Since PERS contributions don't just sit there, but

rather are invested and grow, the average instructor losing their step

increase would see a significant hit on their PERS balance at retirement

age. The "Step Losses.xls" excel file e-mailed to all faculty estimates

that a faculty member at Level 3, Step 7, with 25 years to retirement and a

performance by PERS the same as its last 20 years (16.4% return), would see

a hit of $53,891 on their account when they retire. Should PERS do as well

in the future as it did the last five years (19.6%), a Level Three/Step One

faculty member last year, 30 years from retirement, would lose $295,927 in

his/her retirement account, more than LCC's entire savings this year from

not paying the step increases.

3. Effects on Faculty Members in toto: Affected LCC faculty together would

lose $924,185 in salary, and $110,902 in contributions to their PERS

accounts, for a total cash loss of $1,035,087. The total lost PERS

contributions would have turned into $4,505,017 by the time all the faculty

retire, assuming PERS maintains its 20 year average return, and the average

affected faculty member has 25 years to retirement. This would reach an

incredible $24,671,776 if PERS somehow maintained its last five year average

and the average instructor took 30 years to retire. Of course, different

assumptions would produce significantly different results, but the point

should be clear: to save less than $200,000 this year, the administration

would cause faculty to lose over one million dollars in salary and PERS

contributions over the next ten years, and literally tens of millions of

dollars in eventual retirement benefits.

4. Delayed Retirement: To make up for the losses in their PERS account,

faculty will need to postpone retirement, which incidentally, would then

cost LCC the savings they would have gained by replacing top step retirees

with lower step new hires.

5. Equity I: Part-time faculty and full-time instructors who have already

reached the top of the salary structure aren't effected at all, while the

lowest paid fulltime faculty are heavily impacted. This is hardly a fair

way to tighten a budget. Even among affected faculty, some would catch up

to the top salary in a year or two, while others wouldn't do so for up to

ten years.

6. Equity II: Meritocracy: Variation within faculty salaries before this

point was based on two simple factors: faculty credentials and years of

experience. But if this stands, it will now depend upon whether you were

fortunate enough to reach the top of the salary range before last year. Why

working a year before 1999/2000 should qualify an instructor for a step

increase, while working 1999/2000 should, is wholly without justification.

In fact, doing so would effectively create a two-tier wage system, where

some faculty receive one salary based on one set of principles, and others

receive another salary based on another set of unknown principles.

Northwest and Air France pilots, GM autoworkers, and UPS, Kmart,

Caterpillar, and steel workers, to mention a few, have seen their employers

try to force two-tier wage systems on them. Does LCC really want to join

force with companies responsible for driving down employees' wages and

creating unmeritocratic and inequitable compensation policies?

7. Equity III: Unbelievable as it may sound, a faculty member hired to

begin teaching 2000/01 who taught at any school other than LCC last year,

received credit for that year in their initial level/step determination, and

thus effectively received a step increase for last year, while instructors

teaching at LCC didn't. Hardly a fair principle nor a morale booster!

8. Equity IV: Members of the administration are now arguing that a four

percent step increase, coupled with a 3.44% cost-of-living-adjustment (COLA)

due this coming fall, is a "very large raise" and may need to be paired

back. First, it should be pointed out that a COLA is not a raise; it's a

cost of living adjustment! This only keeps us even with inflation; to not

pay the COLA, however, would represent a pay decrease. Second, LCC faculty

have received the four percent step increase as they've worked toward the

master level salary as long as we've had a union contract, including during

much higher inflationary periods than today. There is no justification for

treating today's faculty any differently than faculty have been treated the

last 30 years, including years with double digit inflation.

9. Rationale I: The administration is trying to treat the step increases

as a cost, but in fact, it actually is rooted in an overall savings for the

college. The salary structure is built on an apprentice model, where new

faculty receive what might best be called an 'apprentice salary', paying

them significantly less for essentially the same work as faculty receiving

the 'master level' salary. Each year a faculty member works at LCC, their

salary is raised until they reach the master salary. When someone at the

top of the salary range retires, and is replaced with someone at a lower

step and salary, this results in a savings to the college. It's why

employers seeking to reduce their payroll offer workers incentives to retire

early. The LCC administration wants to pocket the savings from retirements,

but then treat the incremental step increases as an additional cost. You

can't have it both ways. The fact is that over the long run, annual faculty

salary costs average out and step increases don't actually "cost" the school

anything. Only in years when a higher than average number of faculty are

due a step increase is there a temporary hit on the budget, but this is

offset by other years when there are fewer than average faculty due a step

increase. In fact, years when there are a higher than average number of

faculty due a step increase are actually years in which total faculty

salaries are below average, since this necessarily means that fewer faculty

are already at the top salaries!

10. Rationale II: The administration argued that the funds originally

targeted for use for faculty salaries was unintentionally simultaneously

budgeted for another use. Later we all learned that this money wasn't

budgeted for another use at all; it was simply "de-budgeted". Its one thing

to ask faculty to sacrifice if the money was promised to a needy program

that would now be cut, but something else entirely when it was simply

removed from the general budget.

11. Rationale III: Given recent audits (showing LCC started the school

year with a $10 million budget surplus), climbing student enrollment (which

despite initial costs, results in increased state reimbursements and LCC

revenues), and a promising state budget for LCC, the drastic and inequitable

effects of refusing to pay step increases faculty earned last year can

hardly be rationalized.

12. Recruitment and Retention: LCC faculty salaries have already fallen

significantly compared with other community colleges in Oregon, making

recruiting new faculty more difficult. Direct attacks on the basic salary

structure, and threats of more attacks in the future, can only further

increase these difficulties, as well as making retention of current faculty

more problematic.

13. Trust and Morale: When full-time faculty are hired at LCC they come in

knowing that, barring some major disaster, their salaries will steadily move

from an 'apprentice salary to a 'master salary.' They know this when they

accept the job offer and when they decide to stay at LCC, and they rely on

this when they make financial plans. They accept the salary variations

within the faculty since they know that they eventually will reach the top

salary step (assuming, of course, they are retained). To suddenly challenge

this, when no such disaster is even on the horizon, seriously breaches the

trust between faculty and the administration, and undermines the morale of

all faculty. It is clear in talking with faculty members (including

part-time faculty and those already at the top step) that the

administration's attempted take-back and withdrawal of its salary agreement

last spring has significantly alienated the faculty.

In summary, while additional reasons could be offered to challenge a

take-back of faculty step increases, the argument isn't even close. The

toll on faculty salaries and retirement funds, the gross inequities, the

complete absence of an acceptable rationale for these harmful effects, and

the undermining of faculty trust and morale, leads to a simple and

inescapable conclusion: failure to pay LCC instructors the step increase

they earned last year can not be justified and should not and can not be

accepted. I encourage all faculty members to consider the impact of this

take-back, and to let our community know what you think.