Michigan State University is cutting the salaries of non-unionized faculty and academic staff because of the budgetary impact of the coronavirus pandemic.
MSU President Dr. Samuel Stanley, Jr., announced in a letter Monday to all university employees that the pay cuts will start on September 1 and last at least one year.
"We are implementing a wage reduction using a graduated scale ranging from 0.5% for those with the lowest salaries to 7% for those with the highest salaries," wrote Stanley. "This scale fits within the principles of shared sacrifice across the university."
Stanley said the goal is to avoid academic layoffs and to protect those with the lowest salaries.
Stanley noted the pay reduction follows previously announced temporary 2% to 8% pay cuts for senior administrators and his own 10% pay cut, and the furloughing of 716 university employees.
He said the pay reduction will not currently apply to faculty and academic staff represented by the Union for Non-tenure Track Faculty, and he's asked MSU Human Resources to begin discussions with the union consistent with their collective bargaining agreement.
According to Stanley, the pay cuts are one of a number of cost saving measures the university is undertaking to address its estimated $300 million loss for the next fiscal year and a possible significant decline in state appropriations.
Other measures include an across the board budget reduction of at least 3% for each university unit for an estimated total savings of $20 million and the deferral of $77 million worth of capital projects. In addition, effective July 1, the university will reduce its matching retirement contribution from 10% to 5% of employees' salaries.
Stanley said more cuts are coming.
"Even with the actions outlined above, we will need to identify additional savings to address our long-term financial circumstances given the multi-year impacts of decreases in state appropriations and enrollment," wrote Stanley.
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