We interact every day with people who do not earn a living wage. Moreover, many of the workers on campus are trying to support a family or are working part time, which puts some at or below the poverty line. These insufficient wages occur despite Macalester’s minimum wage policy that mandates employees on campus receive a living wage, which the college defines as $14.17 per hour. The wage paid to workers who serve us food or sell us textbooks is often 36% less than Macalester’s minimum. Macalester avoids the cost of paying all its workers a living wage by subcontracting services to outside companies such as Bon Appetit and the Highlander Bookstore. Instead of Macalester paying all of its workers a living wage, outside companies are permitted to pay workers as they deem fit. This causes many workers to make as little as the statewide minimum wage of $9 per hour.
Macalester’s decision to allow subcontracted employees to be paid poverty wages disproportionately affects marginalized groups such as people of color, perpetuating a long history of people of color being subject to institutionalized inequality. Not only do subcontracted workers in the bookstore and cafeteria barely make enough to support themselves and their families, but the insubstantiality of their wages further disadvantage workers because receiving less than a living wage prevents workers from saving money. Workers have a more difficult time sending their children to school because in addition to receiving wages that even Macalester does not consider a proper minimum wage, subcontracted workers in the bookstore and cafeteria do not receive the tuition discount that other, higher-paid employees at Macalester receive. Especially for workers of color, this perpetuates a disgusting cycle of inequality in which those who are not white have less access to both economic resources and education.
Recently, student concerns about income inequality at Macalester were met with the claim that Macalester pays all its employees fairly because it uses a method called “benchmarking” to determine pay. In a recent interview with The Mac Weekly, President Brian Rosenberg said, “We work very hard to ensure that we are compensating employees fairly and constantly benchmark against the workforce outside Macalester.” It is true that Macalester benchmarks the salaries of those it directly employs, but it does not benchmark the salaries of subcontracted workers at the bookstore or in the cafeteria.
Although benchmarking provides a seemingly objective way to set salaries, many economists have argued that it may be part of the cause of income disparity. Economists Charles M. Elson, Craig K. Ferrere, Brian D. Galle, David I. Walker have all demonstrated in peer-reviewed papers that because of a board of trustees’ unwillingness to “underpay” their president, the president’s salary will consistently end up being set at the 50th, 75th or even 90th percentile of a given institution’s peer group, leading to the skyrocketing of pay we see in college president’s salaries nationwide. Thus, the widespread practices of benchmarking higher salaries, coupled with subcontracting that depresses wages at the bottom, has caused income inequality to soar at numerous institutions in America, including at Macalester.
One way to moderate this pay inflation and ensure that all on-campus workers are at least able to keep up with the cost of living is by setting a maximum pay ratio between the highest— and lowest—paid employees. The ratio of pay between the highest and lowest paid employees at Macalester is currently 40:1. A proposal from the student assembly last spring calling for a pay ratio of 18:1, along with a call to raise wages across campus to Macalester’s minimum of $14.17 per hour, received an affirmative vote by 86% of students in attendance. The ratio of 18:1 is calculated by first raising the wage for subcontracted workers at the bookstore and cafeteria to Macalester’s self-imposed minimum wage of $14.17/hour. Then, the ratio decreases further from 25:1 to 18:1 when the president’s salary is set at the median of Macalester’s peer group within the top 40 liberal arts colleges. The peer group used to calculate the 18:1 ratio is the same one that the Board of Trustees reportedly uses to set the President’s salary.
With the new ratio of 18:1, the president would make a salary of $538,206, still within the top 1% of income earners in the United States. Rosenberg claimed: “I don’t know what data that goal is founded on. I don’t know if it is achievable.” Yet, the 18:1 ratio by construction is achievable since 50% of schools within our peer group pay at or less than the median president salary used to calculate it. This includes several schools that are ranked higher than Macalester on U.S. News and World Report’s list of top National Liberal Arts Colleges, but pay a lower salary to their president, including Amherst College, Carleton College and Vassar College. In this same year, Macalester was ranked 24th on the list, but had the second highest paid president on the list at $792,169. From the subcontractor side, the ratio would only mean paying everybody on campus the wage Macalester itself chose as a minimum. Macalester would not necessarily even be expected to foot the entire bill of higher wages, since the institution has leverage as a significant revenue stream when negotiating with the contracting companies.
These concerns are what led the student body to create an “Income Inequality Commission” (IIC) within MCSG via the student assembly. The five students on the commission have already been chosen and will meet this month. The IIC will also consist of two faculty and two staff members of Macalester. The purpose of this commission will be to conduct research on income inequality and address the issues brought up by students at the student assembly.
The problem is not that the President doesn’t deserve a large salary; the problem is the growing disparity in pay at Macalester. While we need a president and one who is competitively compensated, we cannot undervalue the crucial jobs that subcontracted employees perform. Café Mac employees keep students well nourished and workers at the bookstore distribute texts to students that allow them to learn. Subcontracted employees are just as much members of the Macalester community as those who are directly employed, and therefore deserve to receive pay raises along with all other employees. After all, if it’s not a living wage subcontractors are paid, what kind of a wage is it?