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Update: Data now available for 2014

Yudof's furlough proposal: On the backs of the poor

Jeffrey Bergamini <bergamini@ucdavis.edu>
Wed, Jul 15, 2009 at 12:10 PM
To: hip-all@ucdavis.edu
Cc: president@ucop.edu, regentsoffice@ucop.edu, opinion@sacbee.com
Fellow Workers (and others),

I have spent some time over the last two evenings analyzing Mark Yudof's proposal for UC pay cuts/furloughs. What I have found is troubling. The proposal tilts heavily against low wage earners. I think there are obvious better solutions, two of which I propose here.

*** Please forward widely. ***

Graduated Approach Biased Against Low Wage Earners

Furlough_1_Yudof_proposal.png

Although the proposed cuts are "graduated", an unnecessary burden is placed on those with lower salaries. Cutting more from the top makes more sense all around.
  1. When your monthly gross salary is around $1,600 (Tier 1), a $70 pay cut is significant. It can force decisions like whether to buy food or pay an electricity bill. As we will see below, UC doesn't really need to take those $70 from you.

  2. If, on the other hand, your monthly salary is anywhere from $16,000 to $40,000 (medians in Tiers 6 and 7), what difference would the cut make? Maybe your part time personal chef will have a "furlough" day as well, or you might have to spend your vacation in Athens rather than Paris.

  3. The graduations are weak: Those making 10 to 25 times more than the lowest tier only have 2.2 to 2.4 times the pay cuts, proportionally.


Other Solutions are Available

For the sake of this analysis, let's assume that salary cuts (i.e. furloughs) are the appropriate response to this financial problem. One can make a convincing argument against that idea, but for now I will leave that aside.

I have created two alternative proposals, as examples of how the same shortfall could be accommodated with much less effect on people's lives.

Furlough_2_option_1_equitable.png

Note how easy it would be for the higher salary tiers to absorb most of the cuts proposed for the lower tiers, without much effect on the lives of those with higher tier salaries. An extra $300/mo from a salary of $10,500/mo, or $800/mo from a salary of $37,000/mo, could drastically reduce the effects on lower wage earners. Even those in Tier 4 can be cut less, if those with extravagant salaries will put in a bit more.


Furlough_3_option_2_wealthy_pay.png

In fact, the first three tiers in Yudof's proposal could avoid pay cuts altogether if the upper 4 tiers would accept modestly higher monthly cuts. There is little reason to cut the wages of those with lower salaries.


See For Yourself

I have attached the spreadsheet I used to make these calculations. Feel free to play around with the numbers. You will quickly see that
Yudof's proposal masks unfair cuts with a language of fairness.

I welcome your thoughts, but I suggest that action is better. Contact UCOP. Better yet: If you're represented by a union, use it.


Answers to Predictable Questions/Arguments

"But we need to be fair."
  • It takes only a few seconds of thought to realize that the proposed cuts will have a much larger effect on the lives of lower wage earners than on those of higher wage earners. We should not confuse fairness with a numerical/statistical illusion of fairness.

"But we need to stay competitive."

  • As I demonstrate in my proposed alternatives, the extra sacrifice by high wage earners would be almost unnoticeable.
  • I'm sure most of us realize on some level that the myth of the "highly valued executive" is reaching its end in our society's collective consciousness. Let's face it: Highly paid administrative positions don't require rare talent. They would still be highly paid, and there will always be people who want the jobs.
  • As for other very high wage earners, e.g. coaches and certain medical professionals: They would still earn a lot. Just slightly less.

"30 days of furlough is too many."

  • Yudof already proposed 24-26 for the highest tiers. And I submit that temporary salary cuts may be more appropriate than furlough days, especially for high wage earners.

"This is unamerican."

  • Red baiting is so passé.

Data Methods and Caveats
  1. I used the Sacramento Bee's data on UC salaries in order to measure the number of employees in each of Yudof's proposed tiers (http://www.sacbee.com/statepay). In order to approximate the number of employees in each of Yudof's tiers, I linearly interpolated the ranges in the Bee's data. (The Bee has totals for those earning <$30K, $30-40K, $40-50K, $50-60K, $60-70K, $70-80K, $80-90K, and >$100K. I hand-counted the number of people in the $100-240K and >$240K tiers. See spreadsheet for details.)
  2. Estimates of savings and salaries were made using the median of the low and high ends of each salary tier. This assumes a normal distribution of salaries within the range, which may (for example) slightly underestimate the actual savings from Tier 1 cuts. It may also underestimate savings from higher tier cuts as well. But on the whole the numbers are meaningful, especially given how little Yudof's Tier 1&2 salaries affect the budget in general.
  3. I chose an upper limit of $750K for the highest tier somewhat arbitrarily. Some people earn more than that, but not too many. The goal was to make the median of the highest tier more representative.
  4. The estimates mentioned most certainly introduce some element of error into the calculations; however, the foundation of the analysis is strong, and any errors introduced are unlikely to be significant.


--
Jeffrey Bergamini
Programmer/SysAdmin, Hart Interdisciplinary Programs, UC Davis
bergamini@ucdavis.edu / 530-752-9332

Yudof Furlough Proposal Analysis.xlsx
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Site Notes

Salary data are identical to those from public records requests by the San Francisco Chronicle. The Chronicle described the 2005 data as follows, which probably applies to later data as well:

In addition to salaries, total pay includes overtime, bonuses, housing allowances, relocation allowances, administrative stipends, revenue sharing and more than a dozen other types of cash compensation. It does not include health or retirement benefits.
The Sacramento Bee explains the numbers further (paraphrased):
Results are the actual amounts paid to workers during the year, according to the UC system. Since this data looks back in time -- it has to for overtime to show up -- those who worked only part of the year will see their actual earnings for the year, not how much they will eventually make over 12 months. Gross pay includes overtime, bonuses, housing allowances, sick leave payout, vacation payout and multiple other forms of cash compensation. Some workers promoted toward the end of the year will see their old job titles listed here.
Unfortunately, some errors do exist, and have been acknowledged by UC:

Thank you for the information you supplied on possible errors in the way that earnings were summarized in the Calendar Year 2007 and 2008 UC salary data. We have looked at the program that was used for those years and have learned that earnings for employees with the exact same name at the same location were indeed added together under only one employee name and title. We have modified the program so that this will not occur when we produce the 2009 calendar year data. I appreciate your help in identifying this error and apologize for the inaccurate data that was provided.
- Karla Holmberg, Information Resources and Communications, UC Office of the President

You asked whether corrected versions of past systemwide earnings reports will be done. Because the public is most interested in recent earnings for current employees, and the error that you found affected less than 0.5 % of the employees in the report, corrected versions of past reports will not be done.
- Stella Ngai, Director, Public Records and Information, UC Office of the President

Some examples of the errors:

2007–2010 data represent their respective calendar years. 2006 is actually fiscal year 2005-2006, 2005 is fiscal year 2004-2005, and 2004 is fiscal year 2003-2004. Explanation: These are the reports that UCOP has made freely available.

"Extra Pay" is the amount between base and gross, excluding overtime pay.

Data include employee pay that may not be affected by the proposed furlough plan (e.g. full federal grant).

*The following records have been omitted, in order not to include students and casual employees:

Click to see full list of excluded titles and info about them.

(All records are included at the moment, due to database issues.)

Search records are automatically discarded after 30 days.

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Data available in ZIPped CSV files: 2004; 2005; 2006; 2007; 2008; 2009; 2010; 2011

This site was developed by Jeffrey Bergamini and is no way endorsed by, created by, or otherwise officially affiliated with the University of California. Please direct any correspondence to info@ucpay.globl.org.