Purdue University has no plans to raise the minimum wage for its university employees. The announcement follows Indiana University’s recent decision to increase its pay rates to $8.25 per hour.
Effective July 1, IU’s wage increase puts the university one dollar above the federal minimum wage. IU President Michael A. McRobbie said in a statement that the pay increase is much-deserved, and it’s one way to recognize employees’ important contributions to the success of the university.
But Purdue University President Mitch Daniels said in a statement that changing pay rates might take jobs away from employees at Purdue.
“We are working to expand job prospects and we want to be mindful not to do something that would limit the number of students to whom we could offer opportunities,” Daniels said.
Purdue University assistant economics professor Timothy Bond says both of the universities make decisions based on their best interests, and Purdue would, indeed, have a hard time finding a way to finance the increase.
“If you are going to raise the wages here at Purdue, you have to decrease the number of employees that we have here,” he says. “Looking at it from the community perspective, Purdue is the major employer in the area. From that perspective, he’d be concerned about the loss of jobs counteracting the gains in pay to employees that retain their jobs.”
Indiana University economics professor Gerhard Glomm also warns raising the minimum wage could cause people at the higher end of the pay scale to demand higher wages.
“I think it could be a fairly serious issue to ask how do the workers who have a bachelor’s degree who work for IU at roughly $12 an hour, how do they feel about how their effort to get a college degree is rewarded relative to the people at the bottom end of the wage distribution,” he says.