The rent is too high, and the pay is too low.
Few phrases better illustrate the dynamics of today’s labor market. The wage/housing imbalance and income inequality that were already problematic before COVID—have exploded in its aftermath.
For workers, this means either leaving a job they’ve had for years, or moving further and further away from where they work. For employers it’s meant historic labor shortages.
At our state’s third largest employer–the University of California—it’s meant both.
Earlier this year, UC’s Chief Financial Officer Nathan Brostrom lamented that UC has seen its staff vacancy rate triple since the COVID 19 pandemic. “That’s not good for staff experience, faculty experience, or student experience,” he added.
Recent research has detailed the depth of the problem. Using US Department of Housing and Urban Development data, it found the statewide housing wage in California—the average hourly wage needed to spend less than a third of one’s income on a one bedroom rental—stands at $33.84 per hour. Yet nearly a quarter of UC’s total workforce currently earns less than $25 per hour. Most of these employees are low-wage service workers, hospital technicians, and students. Fully eighty percent are people of color.
Each segment has seen their inflation adjusted “real” wages decrease by at least 5% since 2021, even as the price of everything else (and especially housing) has skyrocketed.
The study goes on to detail how the share of UC service and patient care workers—the frontline professionals routinely lauded as “heroes” during the pandemic—who are spending more than a third of their income on rent has grown from 50% to 70% since 2017. The share spending more than half their income on rent has more than doubled over the same period.
Subsequent media reports have gone on to detail what this looks like for the workers caught in the crosshairs. Hospital technicians are commuting to UCSF from as far away as Placerville. Custodians are commuting to under-staffed departments at UCLA from as far away as San Bernardino. Workers are spending $600/month on gas and another $300 per month just to park their cars at work.
The situation for students, 44% of whom experience food insecurity each year according to UC’s own surveys, is even more dire. They get paid significantly less than career UC employees, even though they often perform similar jobs. UC only houses about 38% of students, and the deficit is growing. And the cost of living in UC campus communities is as much as 30% higher than other campus communities in the US.
You might think that the UC Board of Regents would have tapped the “cash surpluses” CFO Brostrom acknowledged carrying due to growing staff vacancies, or its billions in unrestricted cash reserves to take corrective action. You’d be wrong.
Instead, the Regents voted to boost the pay of UC’s highest paid employees, including an eye-popping $500,000 annual pay bump for the chancellor at UC San Diego. This is especially eye-popping considering that many of these employees already receive housing allowances in addition to six and seven figure base pay rates.
Worse, instead of investing in more affordable student or workforce housing over the past year, UC has invested billions in speculative private equity instruments that rely on raising rents and constrained housing supply in order to generate returns for shareholders.
Now, with each passing day, the wage/housing imbalance at UC only continues to grow. Its workers are demanding a $25/hour minimum wage, and a 5% pay bump for frontline workers who currently earn over $25 an hour. Not to get ahead, but to recoup some of the ground that’s been lost so that we can begin to restore a public service workforce that’s been hollowed out by years of neglect. The total cost of this proposal would be less than 1% of UC’s $47 billion dollar annual operating budget.
Ultimately, Labor Day can’t just be another day for barbecues. It’s a time to recommit ourselves to supporting the huge swaths of our workforce that have been left behind.
Frontline UC workers are a clear case in point.