The Bloomingtonian

IU pay increase rankles employees and portends problems in hiring and retaining workers – By Mike Leonard

Herman Wells memorial on the IU campus. (Photo by Jeremy Hogan/The Bloomingtonian)

Bloomington, Indiana – By Mike Leonard – Special to The Bloomingtonian

Published: August 28, 2021

When the Indiana University Board of Trustees approved its $4 billion budget for the current fiscal year last June, the administration touted that the plan increased student financial aid and support for employee compensation.

The budget would lift the hiring freeze imposed by revenue losses and expenses incurred by the COVID-19 pandemic, raise the minimum wage for appointed employees to the long-sought $15 per hour threshold, and include a 1-2% pay increase for existing employees.

The 1-2% range didn’t cause anyone to turn cartwheels, and the City of Bloomington’s recently announced plan to increase wages by 2.75%, while still meager, adds an eyeroll, at minimum, to the IU plan.

But from the outset, union members working at IU bristled at the set figure for union-represented work groups: 1.25%. Ric Spires, president of Communications Workers of America Local 4818, said that he and the local union membership felt cheated. Again.

“It seems to me that the workers who have huge contact with the students are the ones who sacrifice the most,” he said. “Of course we support bringing that minimum wage up to $15, which they’d promised to do by 2020. We have people working fulltime jobs at IU having to get by on food stamps.”

Critics of the IU budget say that setting the union wages at 1.25% means that the lower paid employees are subsidizing the minimum wage and the lowest paid.

Margaret Cook, national CWA Vice President of Public, Healthcare and Education Workers, reached back to a rallying cry she coined when she worked at the University of Memphis to describe the situation at IU: “One percent of nothing is nothing,” she said. “They didn’t get a raise at all last year. Now is not the time to short-change people.”

There is disagreement between IU and CWA officials about what the IU budget provides, and there is disagreement between CWA and Mike Barker, president of another major union at IU, the American Federation of State, County and Municipal Employees (AFSCME) Local 832. CWA represents workers in “clerical,” advising, and similar positions on the academic side and a variety of jobs in Residential Programs and Services (RPS), which operates the university’s massive residence hall system. AFSCME represents facility employees such as custodians and outside maintenance across the campus. Each union represents negotiates for about 1,000 employees.

First day of fall 2021 classes on the IU campus. (Photo by Jeremy Hogan/The Bloomingtonian)

Sam Adams, associate vice president for budget and planning at IU, said the 1.25% guideline for unions was predicated on what the employee pool would actually see when hourly employees received a base wage increase and in some cases, bonuses of up to $500. “Overall, the union increase was 3.1%,” he said. “If you look at the average salary increase across the university, it’s 1.5%.”

“Sam’s not wrong,” AFSCME’s Barker said. “The $15 minimum wage is a battle we took on some time ago and to bring the lowest paid individuals up as much as they did was a fair trade-off,” he said. “We expected an average increase of 2%, which is normal, so getting to $15 an hour for those not making that was a huge success. I’m not complaining. I’m not going to cut my nose off to spite my face. I know when to pick my battles and this doesn’t seem worth it.”

Representatives of both unions express disappointment that their normal spring meetings with IU officials didn’t happen. While Indiana is a “Right to Work” state and public employees can’t bargain wages, they can bargain for benefits such as paid leave and work conditions.

IU’s Adams said he regretted those meetings didn’t happen but explained, “With COVID, a lot of budget planning got pushed to spring and we had to juggle tuition, the state appropriation, the stimulus dollars coming in and salary compression. And then we had our COVID expenses and losses. This was an unusual year.”

Salary compression has long been a concern across the university, affecting faculty as well. It occurs when efforts are made to bring the lowest paid employees up while budgeting more modest increases for the pay grades above them.

Adams said the university knows that salary compression is a problem and it may get worse before it gets better. “You have folks who have been here say 10 years working next to new people and making the same amount of money. Right now it’s worse in the $15-to-$17 an hour range and I sympathize with people who say, hey, our expenses are going up, too. We don’t set parking rates and other costs employees face (such as ongoing health care cost increases). Higher education is definitely facing challenges.”

The Student Building on IU campus. (Photo by Jeremy Hogan/The Bloomingtonian)

Labor officials say transparency is one of those challenges. IU employs nearly 10,000 employees on the Bloomington campus divided into salaried (exempt), hourly (non-exempt, entitled to overtime pay) and parttime categories. And then, there are dozens of job classifications within those categories with a pay scale aimed at rewarding the responsibility and difficulty of each position. Even well-informed observers say the complexity of IU’s operations make virtually everyone say there are gaps in what they know and don’t know.

How much stimulus money was there and where did it go? How many people got laid off or furloughed since the pandemic hit? Isn’t it a stretch to call 1.25% a pay increase when it probably doesn’t meet the definition of a cost-of-living bump?

“There are way too many resources we know public universities have access to,” CWA’s Cook argued. “In terms of treasury money included in the American Rescue Plan package, and other sources, we know they can do better. They leave out the workers but always seem to have money for administrators. They have money for capital projects and fancier stadiums. IU is about to have its largest freshman class ever. More students means more work for our people.”

Sample Gates at the IU campus. (Photo by Jeremy Hogan/The Bloomingtonian)

Carol Rogers, co-director of the Indiana University Business Research Center, sees another problem that IU faces now that will only increase in the years ahead: competition for employees. “Indiana University, I would argue, has been spoiled because there was plenty of supply and low inflation. Admittedly, I work at IU and they have great benefits. We’ve always been reminded that our benefits are quite good.”

Private employers in the Bloomington area are upping their wages to grow and also be fully staffed and currently, by all accounts, the international biotechnology and pharmaceutical manufacturing company, Catalent, appears to be leading the charge to better compensate workers and offer upward mobility within the company. Among its operations in Bloomington is the filling of Covid vaccine vials for Johnson & Johnson and Moderna.

“Catalent is basically headhunting or snatching workers who already have jobs,” Rogers said. “They are a growing company and they are going to increase the pressure on any employers in the Bloomington area, including IU. For any worker, that $10,000-$15,000 annual pay increase is large enough to mute the benefits of working at the university.”

One Catalent worker, who asked to not be identified, reported a $10,000 pay increase just to jump from IU to the biopharmaceutical firm and has seen a significant raise after that. “They support their employees. They encourage you and they don’t micromanage you like so many departments at IU. At IU it’s ‘you don’t like your pay?’ Well, sorry.’ They don’t care if you walk out the door.”

Rogers said she loves working for IU and would never leave. “The whole atmosphere of working in an environment of research and teaching and scientific breakthroughs fits me well. It’s a good place to work if you are learning-curious,” she said.

But, she acknowledged, wage increases in the private sector are a positive development for the economy and people’s lives. “The more you make, the more likely you are to buy that new car. To eat out more. To buy things that keep other people employed,” she said.

“With baby boomers retiring, we’re getting into a situation where the worker is in the best negotiating position we’ve seen in years. We’re getting to a place where the rubber meets the road. If IU can’t fill open positions or retain the workers it has, it’s going to have a serious problem.”

If it doesn’t already.

First day of fall 2021 classes on the IU campus. (Photo by Jeremy Hogan/The Bloomingtonian)
Image by U.S. Bureau of Labor Statistics

https://www.bls.gov/charts/metro-area-employment-and-unemployment/metro-area-oty-percent-change-in-average-weekly-earnings.htm

More about Catalent:

“The New Jersey-based multinational corporation established a presence in Bloomington when it acquired Cook Pharma in 2017.

The company’s footprint in Monroe County has grown rapidly, expanding from about 900 people in the beginning to 3,500 total employees today. Globally, Catalent employs 14,000 people.

Catalent helps to develop and manufacture medicines and works with many of the world’s leading pharma and biotech companies. These companies often turn to Catalent to provide extra resources and expertise.

In April, 2020, Catalent and Johnson & Johnson signed an agreement for a joint investment to accelerate the rapid scale-up of manufacturing and filling vials of the COVID-19 vaccines. In June, 2020, the company announced a similar partnership with Moderna and its vaccine.

Globally, Catalent produces more than 70 billion doses of medicine a year, or about one-in-20 doses of prescription and over-the-counter medications, vitamins, vaccines and advanced therapies and nearly 100 compounds to treat common and rare diseases and illnesses.

The Bloomington operations at two facilities comprise about 1 million square feet and manufacture more than 160 molecules into injectable vials, syringes or auto-injectors for more than 35 indications including infectious disease, inflammatory disease, metabolic and cardiovascular disease, and musculoskeletal, neuroscience and oncology products.

Source: Catalent

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