WHEN YOU'RE counting pennies, every penny counts .The announcment by University President John T. Casteen III that the lowest-paid University employees will get a 49-cent raise to $9.37 an hour is an important and welcome first step. But there are several points in the president's statement which might require some clarification for those who aren't familiar with the technicalities of the living-wage debate.
Despite what Casteen's statement implies, this pay increase does not amount to a living wage. He includes health, retirement and other benefits when calculating the University's rates of pay. Using this system, the University's lowest wage comes to $12.66 an hour -- but this figure is misleading.
Benefits are important, and the University should certainly offer what it calls an "excellent benefits package." Low-income people need benefits even more than those with higher incomes, who can more easily pay those expenses out-of-pocket.
But benefits are no substitute for higher wages because benefits, though vital, aren't like cash: You can't buy food, formula or diapers with a health insurance policy. People also have health care expenses that are not covered by any benefits plan, no matter how good, and which must be paid out-of-pocket. The University should pay a decent wage in addition to, not instead of, a great benefits package.
Calculating wages separately from benefits also prevents the possibility of claiming that a living wage is in place by simply overestimating the value of the benefits package. It is misleading simply to add the purported value of benefits to a wage and pronounce the total a "living wage." It is not.
The administration claims that the recent pay raise is unrelated to the Living Wage Campaign. But the recent raise -- the largest in years -- very conveniently gets the University out of one of the most embarrassing statistics revealed in the Campaign's recent report, "Keeping Our Promises" -- that, until a raise in December, about 100 University workers made a wage below the federal poverty threshold of $9.30 an hour.
This raise also serves as an acknowledgement that the University does have the legal power to set pay rates for it own employees, which it can do by using University funds to supplement its allocation from the state.
More difficult to understand, perhaps, is the issue of whether the University has the power to mandate that its contractors pay their employees a living wage.
After the passage of Higher Education Restructuring Act component covering the University's management agreement, which awaits Gov. Kaine's signature, the University administration will have more autonomy in the use of its resources and will no longer have legal excuses for not paying all its workers enough to live on. It will amount to the legislative authorization which Casteen has claimed is needed before he can require a living wage.
That being said, it's important to remember that such legal authorization is almost certainly unnecessary. Multiple Virginia jurisdictions, including Charlottesville, already mandate a living wage for both their own employees and the employees of their contractors
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