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Community should be careful not to overreact to layoff estimates

BY DI EDITORIAL BOARD | JUNE 15, 2009 7:26 AM

The announcement of possible layoffs at the UI is a startling reminder that our local economy is not completely immune to recession.

However, there are several reasons not to panic over the possibility of lost jobs on campus.

Is it a wake up call for the community? Yes.

But a death sentence for the Iowa City area? Not at all.

At last week’s state Board of Regents meeting in Ames, UI officials announced that the university could lose up to 130 jobs by this time next year. The potential cuts are part of an effort to trim the school’s budget by $34 million, President Sally Mason said.

While that 130 number is a bit scary, it’s important to remember it’s a preliminary estimate; Mason made it clear that laying off 130 people is a “worse-case scenario.”

The university is offering retirement incentives as a way of facilitating voluntary layoffs. That’s a good route; the more faculty members who retire, the less need there will be to lay off other faculty members.

Still, there will undoubtedly be some layoffs at the university in the next 12 months (in addition to the 200 jobs UI Hospitals and Clinics is expected to cut). That’s a harsh reality, but we must remember that the Iowa City area’s economy is in remarkably good shape relative to the rest of the nation. While we’re not immune to recession, we’re more resilient than most other communities in the United States.

Iowa City has the lowest unemployment rate in the country, according to the most recent unemployment numbers available from the U.S. Bureau of Labor Statistics. The unemployment rate here is hovering just above 3 percent, well below the national average of 9.4 percent. In some parts of the country, unemployment numbers peak above 20 percent.

The rest of the state, as well, is in pretty good shape. Ames and Waterloo-Cedar Falls — homes of Iowa’s other state universities — both have unemployment rates below 5 percent. In fact, seven Iowa metropolitan areas rank in the 25 lowest unemployment rates in the nation.

Actually, there may even be positive consequences of trimming the UI’s employment numbers.
As teaching-assistant positions are cut, it is likely more faculty members will be teaching course sections. While the UI has an outstanding pool of teaching assistants, having faculty members — professors, adjunct instructors, or lecturers — in smaller classroom settings will undoubtedly prove beneficial to students.

UI Provost Wallace Loh told the DI in April that there will likely be a jump in the number of freshman seminars offered next year. Freshman seminar are small classes —18 to 20 students — that aim to spark first-year students’ interest in particular topics. These courses are also an excellent way to give young students one-on-one time with faculty members, rather than just engaging with graduate students who teach course sections.

Salaries and benefits consume 42 percent of the UI’s general fund. That makes cutting positions the most logical choice for trimming big amounts from the budget. Without making those cuts, the UI would eventually have to enforce even higher tuition hikes each year. For years, stagnant support from the state has been remedied with pushing higher prices on to students and their families. Now, dealing with a strained state budget, university administrators are moving to cut operating costs rather than force students to shell out more; that’s a good change.

Next fall, in-state students in the College of Liberal Arts and Sciences will pay $3,412 in tuition and fees. That’s up from $3,272 last fall. While such increases are probably reasonable for most students, bigger increases would likely leave many students’ families scrambling to meet tuition rates.

Ultimately, lost jobs will make the UI a more efficient organization. Universities are notorious for operating inefficiently. A smaller faculty will guarantee that more of the university’s faculty members are operating with an challenging workload; that will benefit students paying tuition as well as Iowa’s taxpayers.

Regent Robert Downer told the DI last week that these changes will stay in effect even after the economy recovers.

We’re glad state officials recognize the need to trim the fat off government-funded operations. Now if only our elected officials in Washington could get that message.


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