The student assembly on income inequality: Make your voice heard

The+above+graph+shows+the+average+per+hour+salaries+of+the+president%2C+senior+staff%2C+full-time+faculty%2C+employees+receiving+the+Macalester+minimum+pay+and+starting+Highlander+Bookstore+employees.++Graphic+courtesy+of+Ilana+Budenosky17%2C+Haleigh+Duncan16+and+Nick+Michalesko17.

The above graph shows the average per hour salaries of the president, senior staff, full-time faculty, employees receiving the Macalester minimum pay and starting Highlander Bookstore employees. Graphic courtesy of Ilana Budenosky’17, Haleigh Duncan’16 and Nick Michalesko’17.

Ten years ago this March, students at Macalester obtained around 400 signatures to hold a student assembly with the goal of creating a policy to enhance the student role in institutional decision-making. Now, Macalester Students Against Income Inequality (MSAII) have taken up the mantle. For the past few months, the MSAII coalition has made valentines for campus workers, handed out trivia cupcakes, and tabled in the cold winter weather to gather enough petition signatures to convene the first student assembly in more than a decade. The student assembly is the most democratic form of student legislation, requiring the signatures of 20 percent of the student body to even hold a session and giving the power to develop and vote on legislation to every student in attendance. Even if you didn’t sign the petition, you are welcome and wanted at this assembly, which will be held on Tuesday, April 14th from 5-7 p.m. on Old Main Lawn (the rain location is in John B. Davis Lecture Hall).

Part of the reason that student assemblies aren’t held more often — to the extent that many students don’t know of their existence — is simply because it’s hard to gain overwhelming interest and support on a given issue. Macalester Students Against Income Inequality actually surpassed the number of signatures required by the student assembly guidelines. The campaign that has inspired more than 400 students at Macalester is one which points out the contradiction between Macalester’s “official” campus-wide minimum wage of $14.17/hour and the low wages of our adjunct professors and subcontracted workers.

Workers at Cafe Mac, The Highlander, Security, Document and Mailing Services and Maintenance are considered “subcontracted.” While subcontracted employees work at Macalester, they are employed by outside companies with whom Macalester contracts. Through this arrangement, these employees are not included under the official Macalester minimum wage of $14.17/hour, in spite of the fact that they work within our community just as other Mac employees do. The result is that many of these workers make less than this minimum wage. In fact, part of the appeal of subcontracting in some situations is that it allows colleges or corporations to get out of wage and labor standards held by the organizations themselves. Macalester holds leverage in this situation and has the ability to change the contracts it holds with these companies. Moreover, Mac has just as much responsibility as the subcontracted companies to treat the workers who keep our campus running ethically.

As described in “Income Inequality at Mac: the Corporatization of Higher Education”, released in The Mac Weekly two months ago, the low pay is not shared by everybody at the college. Including benefits, the president made $743,968 in 2013-2014, or an estimated $358/hour as shown on the chart below. The chart also shows the pay of other workers at Macalester, with the per hour compensation of an average senior staff member (excluding the president) at $122/hour, an average full-time faculty member making $55/hour and workers earning Macalester’s self-proclaimed minimum wage at $14.17/hour. The lowest-paid worker of Macalester, at the Highlander Bookstore, only makes $9/hour, or 2.5 percent of the president’s pay.

The above graph shows the average per hour salaries of the president, senior staff, full-time faculty, employees receiving the Macalester minimum pay and starting Highlander Bookstore employees.  Graphic courtesy of Ilana Budenosky'17, Haleigh Duncan'16 and Nick Michalesko'17.
The above graph shows the average per hour salaries of the president, senior staff, full-time faculty, employees receiving the Macalester minimum pay and starting Highlander Bookstore employees. Graphic courtesy of Ilana Budenosky’17, Haleigh Duncan’16 and Nick Michalesko’17.

Total compensation is reported in text because it takes into account the full amount a college pays the employee. The benefits that the president receives include a house that is valued at more than a million dollars, health insurance, a comprehensive retirement plan and deferred compensation. These are important for comparison since the lowest-paid worker, who is part-time, must pay for all of these benefits out of their base paycheck, since they receive no benefits. Many low-wage workers even struggle to pay for basic necessities, like groceries or their monthly rent. Additionally, total compensation is the standard measurement used by economists for analysis of both non-profit and for-profit CEOs.

The gap in pay between non-profit CEOs, a group which includes Macalester’s president, and for-profit CEOs is largely closing. In 2012, the amount of presidents making more than $1,000,000 increased by half a dozen, from 36 to 42. Using data from salary.com, the median for-profit CEO compensation is $1,015,890, and Macalester’s president would be close to the 30th percentile if he were considered a for-profit CEO. In contrast, the typical compensation of non-profit CEOs is $51,000 to $223,000, according to payscale.com. Clearly, many college presidents, although heading non-profit 501(c)(3) organizations, are more closely linked with for-profit CEO pay.

These astronomical increases in pay have not been backed up by any sort of increased productivity according to several peer-reviewed economic studies. One such paper titled Determinants of Presidential Pay at National Liberal Arts Colleges by Robin Bartlett and Olga Sorokina concluded that “the pay-performance link is weak.” Instead, many have hypothesized that the salary increases are due to the benchmarking of salaries to those at peer institutions. Boards of Trustees, who decide college presidents’ compensation, usually set their benchmarks at the 50th, 75th or even 90th percentile of these peer groups in practice, because they do not want to “underpay” their presidents. Of course, the result if all schools practice this is a rapid ratcheting up of pay from year-to-year.

Macalester’s peer group is composed of 40 schools and is nearly identical to the U.S. News & World Report’s top 40 national liberal arts schools. Besides, for the purposes of deciding presidential compensation, Macalester’s Institutional Research Office also uses these schools to compare college performance. While Macalester ranked 19th in alumni giving rates, 18th in endowment value, 16th in freshman-to-sophomore retention rates, 27th in six-year graduation rates, 31st in full-time faculty salaries and 24th overall by U.S. News & World Report in the most recent years data were available, Macalester’s president had the second highest compensation out of this group. These few measures show that Macalester’s compensation structure, similar to findings by economists, likely also does not reflect college performance.

One solution to this problem is a maximum pay ratio between the highest and lowest-paid workers so that when the top gets a raise, the bottom must as well. The Institute for Public Studies (IPS) proposed this measure and used a 10:1 pay ratio as an example, but in the context of Macalester, this might place president pay below a competitive level due to the huge pay inflation from peer groups. While recognizing the problems with the use of peer groups, conceivably the only objective measure for setting the ratio initially may come from this source. Currently, the ratio between the highest paid and lowest paid workers is 40:1 ($358/hour:$9/hour). Raising the wage for subcontractors to Macalester’s supposed minimum of $14.17/hour and paying the president at the median of our peers ($538,206) would result in a much more reasonable 18:1 ratio.

Furthermore, Macalester would not be the first entity to establish this sort of compensation system. To mitigate the same problems, Ben & Jerry’s used a 17:1 pay ratio between its highest and lowest paid employees until it was acquired by Unilever, and had no trouble attracting top CEO talent. In fact, we are hopeful that Macalester’s president would support an 18:1 ratio because he donated around $300,000 back to the school during his tenure.

The student assembly will provide a space for us as Macalester students to hold the college accountable to the values expressed in its mission statement and demand that its actions reflect what Macalester says it stands for. The Statement of Purpose and Belief of Macalester states that its goals “…can best be achieved through an environment that values the diverse cultures of our world and recognizes our responsibility to provide a supportive and respectful environment for students, staff and faculty of all cultures and backgrounds” and that as a school, “[Macalester is] committed to helping students grow intellectually and personally within an environment that models and promotes academic excellence and ethical behavior.” We believe that the environment at present does not do either of these things. The exclusion of certain campus workers from a living wage is not supportive or respectful and results in the perpetuation of an income inequality epidemic that disproportionately affects marginalized communities such as women, immigrants and people of color. The continuation of income inequality on campus is neither ethical nor demonstrative of the “multiculturalism” that Macalester holds as one of its four pillars. Let’s work together to make sure everybody in our community is treated morally and help Macalester be a leader on this issue.