by the GEO COVID Caucus

May 14, 2020

In responding to the COVID-19 pandemic, the University of Michigan’s administration has been quick to assert the need for austerity. However, we know almost nothing about U-M’s actual financial situation. This top-down approach is harmful to all of U-M’s 45,000 employees–including graduate student workers. 

U-M’s treatment of its graduate workers underlines the need for a more collaborative approach. On May 8, 2020, the Graduate Employees’ Organization (GEO) delivered an open letter to the University administration calling for specific measures to protect graduate workers from the effects of the COVID-19 pandemic. Graduate students face financial insecurity, the inability to perform many types of research, a virtually nonexistent job market, and many other difficulties.

We received a quick response from one of the letter’s recipients, asking “where is the money supposed to come from for your monetary demands?” This flippant one-liner was not the official administration response to our letter, signed by over 1,750 community members (including graduate workers, faculty, staff, and others). But it does point to a legitimate question: What is U-M’s financial situation?

U-M President Mark Schlissel has stated that U-M will “share information with as much transparency and as quickly as we can.” However, the administration is yet to share detailed figures. In the current context, it is natural to ask for GEO and other stakeholders to have full access to the state of the University’s finances.

Michigan Medicine, which recorded a $178 million surplus last year, announced 1,400 furloughs and layoffs in the midst of the pandemic. It also instituted other cuts, but it has refused to be fully transparent about its financial situation, stating that it may be facing $230 million in losses. President Schlissel said U-M as a whole faces a budget shortfall of anywhere from $400 million to $1 billion. 

Why is the estimate so broad? Why hasn’t U-M taken the bold measures that the crisis calls for to dip into its $12.4 billion endowment? And why has the University not tapped the $1 billion credit line approved at the last Regents’ meeting instead of resorting to firing workers? These key questions remain unanswered. Instead, more rumors of layoffs circulate, now concerning lecturers. As stated in our Daily op-ed, any financial plan must protect employees for whom the loss of jobs and income in this pandemic will bring catastrophic consequences.

The Huron Valley Area Labor Federation (HVALF), to which GEO belongs, has already pointed out that the top earners at U-M should make greater sacrifices–more than symbolic salary reductions–before the University cuts rank-and-file positions. We have not seen any concrete evidence that furloughs and layoffs are inevitable.

It appears to us that the administration is using this crisis as an opportunity to implement austerity measures that disproportionately affect the most vulnerable workers. We need more than assertions of Michigan’s dire financial situation. Increased transparency will allow U-M stakeholders to ensure that the University’s response produces the best outcomes for the entire community.

HVALF is circulating a petition that calls for the University to open the books and share its full financial information, including specifics on:

  1. “Which units are losing money at what rate, and what share of those losses the units themselves are expected to absorb and what share will be paid by the wider university;
  2. What COVID-related federal and state money has been received (or is promised) and how it has been (or will be) spent;
  3. What share of the endowment can be used to help offset losses not offset by federal and state transfers;
  4. What assumptions about the future are being made, on what basis;
  5. What sacrifices each UM stakeholder has already made or will be making, to address the shortfall identified in current estimates.”

GEO joins this call and looks forward to using this data to help answer the question we received, and participating in a collaborative decision-making process to support the U-M community through this difficult time.

As U-M stakeholders, we worry that the austerity measures announced by the administration will disproportionately affect rank-and-file workers. We believe that the optimal measures to deal with the economic impact of the COVID-19 crisis are best decided collectively. To quote the HVALF petition, “cooperation requires common understanding and trust.” Weathering this crisis requires transparency and collective governance.

We await a substantial response from U-M leadership to our open letter by May 15th, and to the HVALF petition by the 19th. We look forward to having productive conversations with the University administration on these issues, and to seeing U-M and its workers emerge from this crisis stronger than ever.

The GEO COVID Caucus co-chairs can be reached at covidchair@geo3550.org. View a PDF version of this statement here.

Where Will the Money Come From? Open the Books and the Community Can Help Answer