MSU Considers Furloughs and Big Pay Cuts in Response to Falling Revenue

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Gary Caldwell for ELi

MSU's Union with The Landmark apartments of East Lansing in the background. The city's economy is intimately tied up with the university's.

Last week, Michigan State University’s administration formally notified faculty and staff that it had reached an agreement with the Administrative Professional Association (APA) – the largest labor union on campus that represents non-supervisory support staff – regarding furloughs. This comes just days after President Sam Stanley announced that MSU is considering across-the-board pay cuts for university employees.

Furloughs for APA workers can run from a minimum of 30 days and a maximum of six months. (The union is providing information at this page.) Employees can keep their health insurance if they are able to pay their contribution before entering unpaid furlough. The university will continue to pay its share for health insurance, but not toward retirement funds while an employee is on furlough.

Other furloughs are on the horizon at MSU. The Administrative Professional Supervisors Association (APSA), the Clerical-Technical Union (CTU), and MSU Service Workers-Local 1585 are reported to be negotiating conditions for voluntary furloughs with MSU. When contacted via email, only APSA responded to ELi, saying it has no comment at this time.

This news from MSU brings still more financial uncertainty to the East Lansing government and community. ELi’s Chris Gray reported in March that the campus closure is reducing the City’s tax revenue since work done remotely outside East Lansing cannot be taxed.

Now, furloughing employees means no income tax on possibly thousands more employees’ income.

Another unknown is how the absence of furloughed MSU employees and those workers aiming to save money will affect already hard hit businesses adjacent to campus.

MSU has around 11,000 employees, many of whom live in or have daily ties to East Lansing. Furloughing workers and cutting salaries along with the possible absence of the student body come fall would leave the housing economy—particularly rentals—in a detrimental state.

Stanley recently noted that the pandemic had hit some groups harder than others: “I also would like to acknowledge that the pandemic is impacting some of our Spartan employees and families harder and in different ways. Here in Michigan, and in other states, minority and marginalized groups are bearing a very disproportionate share of the morbidity and mortality of this terrible pandemic.”

A group that could be hard hit by MSU’s financial decisions are students who work as TAs (teaching assistants) and GAs (graduate assistants) for the university. Darren Incorvaia, the Graduate Employees Union’s Chief Information Officer, told ELi that the GEU has not been in discussion with MSU regarding pay cuts.

He explained that, “Due to our collective bargaining agreement with the university, our TA pay cannot be cut without sitting down with the university for bargaining negotiations.”

Should the university reach out to renegotiate the contract, Incorvaia promises the response will be a resounding “no.”

But graduate students who rely on fellowships and research assistantships are not covered by the GEU contract, and those graduate employees could face pay cuts.

According to Incorvaia, “While we do not have direct bargaining power over fellowships, hourly, or RA salaries, we will work diligently as an organization to prevent cuts from happening to any graduate student at MSU.” 

Incorvaia spoke of how furlough and pay cuts could have unforeseeable outcomes on international students, who already in a precarious place following the cancellation of in-person classes. Since visa rules that limit the number of hours international students can work, these students are often afraid to report being overworked. Pay cuts could result in international students doing more work for even less pay.

MSU has already implemented some cost-reduction measures, including continuing the hiring “chill,” reconsidering and canceling various capital projects, reducing consultancies, restricting employee travel, pay reductions for executive management, and implementing a three percent budget cut to academic departments.

Faculty and graduate students received word this past week that university-sponsored travel is canceled indefinitely. Although MSU does not fund all research and conference travel, it does provide substantial support and offers health insurance for international travel. This prohibition should lower expenditure, but it will also slow the completion of some research—important for graduation and tenure.

At this point, there can be no question that the impact of the pandemic on MSU is greatly affecting the individual and collective lives of the greater East Lansing community.

Note: The headline of this article was amended as some readers took the original headline to mean that furloughs have begun. ELi thanks readers for pointing out the misleading headline. The article was also corrected on May 22 at 9 a.m. to note that not all furloughs of APA-affiliated employees will be voluntary.

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