Inflation, Raises and Hard Times Ahead


by Victor J Kinzer

I have been talking to a lot of people recently who are afraid the staff at Indiana University aren't going to get raises, or if we do, our raises won’t reflect the actual cost of living. The unfortunate truth is that IU hasn't given us a real cost of living raise in several years. Several years ago, it was standard to base support staff raises on the increase in the Consumer Price Index, and then money available above that amount was distributed generally based on merit.

In 2003 that stopped happening, because the trustees were allocating less money than inflation for our raises. So for the past several years, when the economy was expanding rapidly and university enrollment was increasing faster than ever before, the people who work every day to keep the university running and receive the least compensation for that work were taking an effective pay cut every year.

I recently read about Harvard's and Yale's endowments growing at rates far beyond inflation while tuition skyrocketed ahead of inflation and decided to find out how IU's endowment had fared during that time. In 2005 IU's endowment was at 1.1 billion dollars, up 9.4% from the year before. In 2006 the IU endowment hit 1.276 billion dollars, up 15.2% from the year before, and in 2007 the IU endowment hit 1.556 billion dollars, up 22% from the year before. These were all years when the money IU allocated for staff raises was well below inflation.

Now we are hearing about the cuts that are happening everywhere. We hear how times are tight, and how everyone will have to sacrifice because there is so little to go around. If the wealth over the past several years had been shared equally all the way down the line, I would be the first to say that we should indeed do our part and be glad that our jobs are so much more secure than many jobs in the private sector. However, the wealth was not shared evenly. The past decade has been a time of unprecedented expansion in high level administration, both in positions and salaries. The support staff who have worked tirelessly for years to support Indiana University and have taken effective pay cuts as thanks should not be hit even harder in these difficult times. We should get no less than IU has given us in the recent past, and then only on the condition that in the future IU will go back to a policy of providing CPI based annual raises in all but emergency budgeting situations. We should demand no less, and we deserve no less.

Note: This inflation rate is a measure of how much the Consumer Price Index has increased between the date given and the year prior. It does not account for fluctuation during that time. The Average Inflation gives an idea how expenses over the whole year compare to the whole year prior. Inflation data from IU foundation numbers from the 2005, 2006, and 2007 NACUBO Endowment Studies.

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