Michigan’s minimum wage increased to $8.50 per hour Jan. 1.
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Effective Jan. 1, 2016, the Michigan minimum wage raised from $8.15 per hour to $8.50 per hour, causing the college to change certain pay incentives for student workers.
Before now, supervisors could increase students’ wages by 10 cents per semester as “longevity increases,” if they returned to a department, in order to reward loyalty and hard work. According to an email sent to supervisors by Financial Affairs Controller LeAnn Creger on Feb. 25, the college is suspending future increases “until the wage rate levels off.”
The first wage increase started Sept. 1, 2014, and increased the wage from $7.40 to $8.15. In January 2017, the wage will increase again to $8.90, and by January 2018, it will level off at $9.25 per hour. In other words, over a four-year period between 2014 and 2018, the minimum wage will increase by $1.85 per hour.
Creger said since the minimum wage started increasing, students have seen an increase of $1.10 in their wages. This wage hike negates the need for longevity increases, Creger said.
“The college values student employment, and we don’t want to harm them in any shape or form,” Creger said.
The good news for the 600 students employed by the college is that supervisors still may offer pay increases in other ways. For example, supervisors can increase student wages by 20 cents per hour for undesirable hours up to $9.40 per hour, 10 cents per hour for weekend hours up to $9.30 per hour, and 50-75 cents per hour for “supervisory” jobs — any job that requires greater responsibility, leadership, decision-making, accountability, or acquired skills — up to $9.95 per hour, according to a document sent to supervisors in Creger’s email.
Creger said supervisors do not have to give students those raises, but they can, if they want to reward an employee.
Senior Meg Prom said she started working in security on the first day of her freshman year. She worked from 8:30 p.m. until midnight and also a midnight to 2:15 a.m. shift. She has worked other shifts since and now works dispatch.
“I never got a raise, as far as I know,” Prom said in an email. “Often the permanent members take shifts through the night, but I don’t think that affects their pay. So no bonuses, no raises.”
Bon Appétit Management Company, not the college, determines the pay for A.J.’s Café workers.
Prom said A.J.’s did give raises. She worked there freshman and sophomore year, quit, and then rejoined senior year.
“I think our hourly rate went up 10 or 20 cents every semester we stayed on,” Prom said. “Honestly, I’m less torn up about nixing the longevity raise than I am about A.J.’s not allowing employees to take tips. That was always our ‘bonus.’”
Creger didn’t have data regarding how many students make close to minimum wage and how many make close to the $9.95 per hour maximum wage, but she said it was probably weighted more toward the bottom end of the pay scale.
Senior Megan Scott said she has worked for the theater department’s costuming since her sophomore year.
“The previous supervisors, who graduated in 2014, had gotten longevity increases,” Scott said, adding that she hasn’t received one because of the minimum wage hike.
She said she can see the logic of withholding those raises while everyone is working out the new minimum wage requirements, but she said she hopes the college won’t get rid of them altogether. Creger said the college is only suspending longevity raises.
Chief Exectuive Officer Rich Péwé criticized the wage hike.
“The facts are that the minimum wage increases are a little liberal — too liberal,” Péwé said, adding that this unfunded mandate from the government will cost the college $75,000 from Jan. 1 to the end of the fiscal year, June 30.
Creger also said supervisors must stay within their budgets, so they need to manage student wages wisely. Péwé said even though the government raises the minimum pay, departments need to keep their budgets where they are.
“Do the math,” he said. “You have fewer people with higher pay.”
Péwé said the college doesn’t want to reduce the number of student workers they hire, so supervisors must get creative in trimming their budgets in other ways, like cutting waste, consumables, and inefficiency.
“It is what it is,” Péwé said. “As wages go up, to afford that position costs you more.”
Senior Director of Admissions Zach Miller said the admissions department employs nearly 140 students, including about 90 student ambassadors, 50 student callers, and 10-15 office assistants. Because of that, the minimum wage increase will impact that department significantly.
“We liked to incentivize good work and give that pay raise,” Miller said.
He said the longevity increases “worked so well” because it told students they’ve done a good job.
“It’s kind of a sad thing,” Miller said about the suspension of longevity increases.
As admissions works on expanding its operation, it wants to hire more students. The wage increase, however, affects how many students it can employ, Miller said. Still, he added that admissions has been fortunate in that they haven’t had to cut student workers but actually has added a few.
“We have to get creative in how we budget. We only have a certain amount of money,” Miller said. “We are going to have to really think through what this means for next year.”
Another concern of the college is that the student’s minimum wage is getting closer to the starting wages for full-time employees, something called “compression.”
“People at the lower end of the pay scale are great, and we care about them,” Péwé said. “We want them to be able to afford to live. We need to be sensitive to ensure compression is not a major issue.”
Finally, Creger added that the biggest benefit to students is the invaluable experience they get from working across campus.
Miller echoed her opinion, saying that admissions develops students professionally and offers them mentoring skills they can use in the future.
That being said, Creger said longevity increases would be reinstated once the minimum wage stops increasing.