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Remarks by UVa President Teresa Sullivan at the Preliminary Meeting of the Board of Visitors

February 23, 2012

Madame Rector, Members of the Board of Visitors:

I will begin by speaking about an issue that is familiar to all of us by now — the Living Wage Campaign and its demands. The campaign members say that they have been seeking a living wage policy at UVa for 14 years; that might be true, but I have been here only 18 months. In that time, I presented to you a budget that increased the minimum hiring rate from $10.14 to $10.65 per hour (or $14.55 per hour, if we include the average level of health benefits); accelerated pay increases for our lowest-paid workers; provided compensation for the money that employees lost in last year's VRS adjustment; and maintained a package of comprehensive benefits. Workers who complete training, usually within six months to a year of hiring, receive a raise to $10.94 per hour.

We currently have 26 workers at our minimum entry-level hiring wage (1) out of a total of approximately 8,500 salaried staff and faculty in the Academic Division. In September of last year, the Board received a letter from the Living Wage Campaign asking that the minimum hourly wage be raised to $12.01. (2) The various demands I have received during the past several weeks have urged us to raise the minimum hourly rate to $11.44 (3), to $13 including medical benefits (4), and to $13 exclusive of medical benefits. (5) The City of Charlottesville, which has adopted a living wage policy, lists 20 job categories on its website with a starting wage of $10.73. (6) As this variation shows, there is no accepted, objective referent for what constitutes a living wage.

I have also been asked to peg future raises to a cost-of-living index calculated by an external group. I will note for the record that for the 12 months ending January 2012, the unadjusted Consumer Price Index rose by 3.1%, (7) while the minimum-hourly-rate demand has risen by nearly 9% in the period since September 2011.

The point about these numbers is that the protest is not principally about numbers (nor about dollars). If it were, I would be applauded for the significant progress we made in just one year in raising our minimum hourly wage and in reducing the number of employees earning the minimum entry-level wage from 61 to 26.

Rather, this protest is about who makes decisions. The demands have called for a guarantee that we will peg raises in the future to an inflationary figure determined by the Economic Policy Institute, (8) and that a Living Wage Oversight Board be appointed to oversee our employment policies.

Last spring, when the economic situation continued to look bleak and it appeared that, once again, we would receive no raises from the state, the living wage activists with whom I met urged me just to adopt the policy, even though they conceded that we probably could not fund the policy.

I appreciated their conciliatory tone, but I find myself unable to agree to a promise that the University might not be able to keep. We might not be able to keep a pledge to peg wages to inflation. We have not been able to do so for the past four years; as you know, our employees have lost ground because of the state-wide pay freeze. To make the promise represents to me a fundamental lack of integrity; equally important, it represents an abdication of my responsibility to balance all the competing financial priorities before us.

I am, without reservation, accountable to you as the Board for the way the administration makes decisions and for how we manage our budget. With regard to the living wage campaign, I believe all of us regret that some protestors have resorted to a hunger strike, choosing the risk of doing harm to themselves. I remain concerned about the wages and working conditions here at UVa for all of our employees, including the lowest-paid. And I am quite willing to be accountable to our community with annual reports on our progress. But I cannot delegate employment policies beyond our administration, except as required by law.

Improving salaries and providing for enrollment growth will be our highest priorities in the new budget we propose. I believe that I have demonstrated my concern for these issues, not only in the one budget I have so far submitted to you, but also in the staff satisfaction survey and in the respectful workplace taskforce whose recommendations we are now implementing.

I will turn now to other business before us in this Board meeting. This meeting organizes and presents a great deal of information for the committees and for the Board. As you are well aware, UVa is a large and complex organization with several distinct lines of business. Besides being a major educator of undergraduate, graduate, and professional students, we are also a major health care provider. We are a large research facility, and we have a large athletics operation. Each of these activities will receive attention in the course of the meeting.

I would like to highlight three themes of this meeting. First is the focus on student learning. You will learn about the global involvement of our students, both through academic programs such as global humanities and global health, and through study-abroad experiences. You will also learn about what we are doing to foster success in learning among our students. You will hear a report about how UVa students' curricular choices are distributed, given our curriculum is organized by requirements and not through a core curriculum. I note that you have also elected a Student Visitor for the coming year. We will have lunch tomorrow with several of our student leaders from various organizations across the Grounds.

The second theme is the focus on financial accountability and prudence. You will receive a new financial report that summarizes the University's position at the end of December. This report will provide holistic information on UVa's fiscal health and its capacity to achieve institutional goals. It will show how we are managing our strategic priorities and ensuring that our flow of revenues and expenditures reflects those priorities. This is important big-picture information for you to have as we enter our fiscal year 2013 budget discussions.

You will hear an update on the capital campaign and other fundraising efforts, and an overview of the legislative progress on the higher education budget. You will hear more about the ongoing review of AccessUVa, our financial aid program. You have already heard about the careful planning underway in our Health System. Later today, you will hear an updated ten-year financial plan for Athletics, taking into account some of the changes that have occurred since the plan was last presented to the Board — including the coming addition of two universities to the ACC.

We think daily about prudent use of our resources. You recently received this year's President's Report, presented for the first time in electronic format only. After assessing the production and printing costs of the report, and by deciding to discontinue the print version, we realized a cost savings of almost $43,000. This is a small savings, but it is one illustration of our efforts to contain costs.

The third theme is the necessity for balance as we try to maintain many different activities, using a number of different revenue sources, and seeking always to ensure quality in education, health care, research, and all other endeavors. We face many challenges as we seek to align our people, resources, talents, and space to best serve our diverse constituencies. You will sense in our presentations the tug among many good priorities that compete for the available dollars.

After so much discussion of financial pressures, I want to close with some news about our employees' commitment to giving — a commitment they have sustained in spite of their own financial pressures in recent years. You are well aware that for four years now, most of our employees have seen no increase in their pay. Nevertheless, we have some of the most generous employees to be found anywhere.

UVa employees donated a record $982,000 through the 2011 Commonwealth of Virginia Campaign, or CVC – an annual workplace-giving program that allows all of Virginia's state employees to support charities of their choice.

More than 3,900 UVa employees made donations in the 2011 campaign – an increase of more than 17% over the 2010 campaign and the largest number of donations ever made through the CVC at UVa.

Overall, our employee donations accounted for more than 27% of the statewide CVC total of approximately $3.6 million. Since 1999, our employees have contributed more than $9 million through the campaign, and they have led all state agencies in giving for more than 10 years.

In spite of the prolonged freeze on salary increases and the poor economy of recent years, our employees have kept up this strong tradition of giving. And that says a lot about the generosity and compassion of the people who work for UVa.

  1. Message from President Sullivan: A Commitment to All Employees, February 17, 2012.
  2. Letter from the Living Wage Campaign at UVa to the Board of Visitors, September 16. 2011.
  3. "Faculty Petition for a Living Wage for All Employees," delivered February 8, 2012.
  4. "Guidelines for Implementation of a Living Wage at the University of Virginia," delivered February 8, 2012.
  5. "The Living Wage Campaign responds to President Sullivan's Email to the University Community," February 18, 2012.
  6. City of Charlottesville Jobs Board, lists 20 job categories with a minimum hourly wage of $10.73, which is 71 cents below the lowest "living wage" proposed for UVa. Examples of these jobs include assistant registrar, cashier, maintenance worker II, motor equipment operator I, and travel specialist.
  7. U.S. Bureau of Labor Statistics, Table 4, Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): U. S. City Average, by expenditure category and commodity and service group, unadjusted percentage change for all items for twelve months to January 2012.
  8. Economic Policy Institute. I have reviewed their family budget calculator, which is adjusted for family size and city, but is based on 2007 data (updated to 2008). I have not, however, been able to replicate at this site any of the figures presented by the Living Wage Campaign.