Dear AU Community,
As we begin Welcome Week, I have heard from students, faculty, and staff with important questions and concerns about our people and our mission. You may know or have read in our message on Friday that the union representing staff in the Provost’s and Enrollment divisions has announced a strike during the week of August 22–26. The perspectives from our community on this important topic are helpful to hear and I want to address these matters with you.
I want to start with a guiding point that I know we all agree on–the important contributions of our staff and the vital role they play at American University. Our commitment to our staff was a driving reason we avoided layoffs during COVID, provided merit increases for our team members at the lowest end of the pay scale at a time when the rest of the university had to forgo them, and protected this same group from furlough days. In our budgeting, our strategy, and our everyday activities, we are focused on making AU a great place to work because we know that supporting and empowering our people aligns with our values, helps us meet our goals, advances our research and learning, and provides our students with the unique AU education and experience.
We have been negotiating with the union since last May. It is a long process, but thanks to hard work, we have been able to reach agreements on almost all the contract provisions. The university’s fair, equitable, and comprehensive compensation offer included a 4 percent salary increase (consisting of a 2.5 percent across-the-board increase for all unit members and a 1.5 percent performance pay pool this year). This is in line with the increases provided to AU staff and faculty this year, and the university also offered to make the across-the-board increases retroactive to July 1.
Our compensation offer also included additional base salary increases between 1 and 3 percent to reduce salary compression for long-serving employees; the elimination of the lowest two pay bands, which will result in additional base salary increases for staff currently below the minimum pay of their new band; and increased university contributions to health insurance costs for the lowest-paid employees. The wage increases alone average 4.6 percent for unit members in the first year. The proposed increases are consistent with the significant compensation framework investment for both represented and non-represented staff and faculty in the most recent two-year budget, which is the largest compensation increase in almost a decade.
While we have not reached an agreement on the compensation measures, I want to assure you that the university has negotiated in good faith. Our fair and equitable compensation proposal, which represents our best and final offer, is based on our commitment to our staff.
In this process, we have to consider the health of the institution. With our deep dependence on tuition, we must be thoughtful stewards of our resources because they come from our students and families. Part of that means we have to make choices. If we want to continue our focus on affordability, further our commitment to research and learning, and invest in our people, we must carefully balance the best use of our available resources in each area. But it also means we can’t do everything in every area.
One of the intentional choices we made in the new two-year budget is to prioritize investments in our people. We agree that it is critical to support our faculty and staff, particularly during these uncertain economic times, but even more importantly because they are a core foundation of our work and mission. That is why we invested an additional $76 million in compensation (which was already the largest part of our budget). We took steps to relieve salary compression for our term faculty. We provided both across-the-board and performance pay increases this year. And we offered these same types of compensation enhancements to the union. We know we can’t address every compensation need immediately, but we are committed to this work for the long term.
We are able to make this compensation investment (and invest in more financial aid for our students) because we moved funds from our cash reserves to our endowment to help pay for the increases. During FY21, the university, along with other higher education institutions, achieved substantial market-based gains on the endowment. However, during FY22, the market experienced significant volatility and the university ended the year with a negative 2.79 percent return, eroding a portion of the FY21 gains. After conducting a thoughtful analysis to ensure that we maintain adequate funding for future opportunities and any potential negative impact events, together with our chief financial officer, I made the decision to transfer cash reserves to the endowment to help support salary and financial aid increases included in the FY23–24 budget. We did this because it was the right thing to do for both the immediate benefit of our people and the long-term success of AU.
These financial choices to support our community also followed more than $100 million in losses during the COVID-affected years of 2020 and 2021. We used a significant portion of our reserves at that point to maintain our operations. Many in the community made sacrifices so that we could protect our lowest-paid employees from furloughs and other impacts. As we stabilized our finances and used the FY21 market value increase, we returned the retirement match ahead of schedule, resumed salary increases in 2021, and replaced the reserves.
We hope we can resolve this matter in a fair and equitable way soon. The university respects the right of community members to organize and join a union and to participate in related protected activities, including a strike. We have enjoyed a constructive relationship with the adjunct faculty and graduate student workers' unions (which are represented by SEIU, the same union as the staff bargaining unit), with multiple contracts with both units over the past 5 to 10 years. We reached a new agreement with the union covering the graduate students this year and are finalizing the process, which will involve the union recommending that the graduate students vote in favor of the new contract. We have concurrently negotiated with the adjunct union and hope to finalize that contract soon. And we just finalized the first contract with the new union at WAMU, which formed at a similar time as the staff unit.
We have put much effort into preparing for this week so we can continue to provide services to our incoming and returning students. As part of this work, messages were sent to students and supervisors on Friday with additional information.
I know this is a challenging situation and I appreciate the concerns that I have heard. I hope this information can help address some of the questions and complexities in this matter, as well as demonstrate AU’s ongoing commitment to serving our students and supporting our staff and faculty. AU is a strong and unique community because of the dedication of our people. We will continue our work on these important issues, and I look forward to starting the semester with you.