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Tiers
July 7, 2008 - 9:03pm

I had a conversation this week with a colleague at whose college, as at so many others, the level of benefit an employee gets is based on her hire date. The farther back you were hired, the better your benefits. This isn't just a matter of, say, compounding interest; it applies to things like health insurance and retirement account contributions. Newer hires pay larger percentages of salary for retirement, and have larger payroll deductions for health insurance, than do their coworkers the next office down.

Interestingly, nobody ever calls this age discrimination, which is what it is. (It clearly has a 'disparate impact' on younger workers. How many credentialed professionals currently under 40 were working there fifteen years ago? I thought not.)

These tiers were the result of collective bargaining. They were a way to cut future costs without hurting present employees. Of course, time has a way of passing, and now some of those unnamed (and unrepresented) third party folk are actually on staff.

Or, increasingly, not. It seems that new employee retention has mysteriously nosedived since, well, the latest round of tiers went into effect. It's most pronounced among staff, as opposed to faculty, probably because staff aren't eligible for tenure, which is a lure of its own.

Apparently, the college can't compensate for the higher deductions by offering higher salaries, for fear of triggering complaints of 'salary compression.' If you look only at salary, and not at take-home pay, the objection holds some water. But x minus five is more than (x plus two) minus ten, so in terms of take-home pay, it's misplaced.

Worse, the disparity becomes progressively harder to 'fix' over time, even if one were so inclined. Any move to raise the effective compensation of the disfavored group would immediately bring calls for retroactivity, which is a headache beyond words. And as the gap grows, the cost of filling the gap grows with it. Right now, that cost is simply passed along to newer hires, who swallow it in the form of lower take-home pay.

Judging by the turnover of younger staff, the combined pincers of 'tiered benefits' and 'no salary compression' have pushed take-home pay to below market-clearing levels. This is not good.

Although some might read this as an anti-union post, I don't think it is. My preferred solutions are either to go with national single-payer health care for everybody and be done with it, or, failing that, for the union to adopt the Rutgers faculty union model of actually having incumbents make some level of sacrifice for the sake of their future colleagues. Either way, the goal should be precisely to get away from invidious distinctions among employees based on age. Tiers aren't solidarity; they're sellouts. They defeat the purpose of unions, and make administrators' jobs harder, too. No, thanks.

Instead of my preferred solutions, though, I foresee the tiers getting steeper, and colleges compensating with an unsatisfying combination of efficiency drives, reorganizations, and lower quality. Yuck, yuck, yuck.

I honestly hope I'm wrong on this one.

 

 

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