Living Wage for Some, Layoffs for Others at UW-Madison

MacIver News Service | October 12, 2015

[Madison, Wisc…] While the University of Wisconsin Madison plans to lay off 70 employees because of state aid cuts, it also just gave at least 1,000 employees a “living wage” raise this past summer.

As of July 1st, the minimum starting pay for all permanent and limited term university positions is $12.61 an hour. That’s what the City of Madison considers to be the “living wage.” The estimated cost is between $750,000 and $1 million per year.

UW-Madison’s plan had been in the works for years as the university set up its own personnel system called “HR Design.” Even though the school was facing a $30 million cut in the 2015-17 budget, delaying the raises was not considered an option.

“The proposed state budget does not impact HR Design’s implementation dates, including the HR Design components scheduled for July 1, 2015 implementation,” according to the HR Design website.

“What is often not discussed is the effect of these policies are now going to have on the individuals being laid off, they have gone from an agreed upon wage with their employer to having no wage,” Rep. Dale Kooyenga (R-Brookfield), who sits on the Joint Committee on Finance, told the MacIver News Service.

Ironically, UW-Madison would never have been able to offer these raises to many of its employees if not for the 2011-13 state budget. That law gave the school the authority to set up its own personnel system. Before that, the pay for many positions was set at the Office of State Relations.

UW-Madison realizes that some employees might be resentful who currently make around $12.61 an hour after years of service.

“Changing the minimum wage will bring the pay of some university employees at the bottom of the pay scale closer to that of employees with longer years of service. We are looking at ways to adjust wages for this situation (sometimes called “compression”). The amount of the adjustment will partly depend on available money. Fully addressing all the needed pay adjustments may take place over a few years,” according to the HR Website.

Looking down the road, the school hopes to offer the “living wage” to employees of its contractors too. However, it does recognize that will come with additional challenges.

“We are studying what types of work are provided through contracts, how many hours of labor are contracted, and how this would impact the university. Because of state purchasing requirements, some work is provided through Department of Administration contracts. The university does not have control over these contracts, so we are trying to find out how this limits any changes we can make,” the website says.

For positions now currently starting at the “Madison living wage,” the school plans to continue keeping pace as the city increases that amount. In January 2016, the wage will be $12.83, and UW-Madison will follow suit.