For several years, the issue of a "living wage" for employees and contract workers at Hopkins has been a concern of a number of our faculty and students. I personally share their concerns--those concerns are consistent with the values that lie at the core of Hopkins as a university fundamentally committed to improving people's lives through education, research and patient care. About two years ago, I instituted increases in the wages of Hopkins' lower paid employees to bring them up to comparability with the "living wage" principle.
For the last several months we have been considering the matter again. I have concluded that we need to make some additional increases in compensation for our lower paid employees and contract workers, and I have therefore committed to raise the wages of our employees and contract workers to a minimum hourly wage of $7.75 within the next three years, beginning right away for some employee groups. This commitment includes employees of our sister institution, the Johns Hopkins Health System and, in addition, will be extended to cover all contract workers.
In fact, all full-time university employees now are paid at least $7.75 per hour, but, once again, I have asked that we extend this minimum to cover our part-time employees and the workers with whom Hopkins contracts for services. Because of the budgetary impact, the details of the timing and annual amount of the increases are still being worked out with the nine university divisions and with the Johns Hopkins Health System.
Committing to the principle of providing compensation to all our workers above the "living wage" is not a simple task. Although The Johns Hopkins University across all its components receives and spends a great deal of money, many of our revenues and our endowment are restricted by the donors and granting agencies for very specific purposes. At the same time, tuition increases have undergone tremendous public scrutiny, and we must place greater emphasis on cost reduction (as well as increased financial aid) to assure that a Hopkins education remains affordable to all. And the Johns Hopkins Health System is not only under severe competitive pressures to hold costs down but the amount the hospital can charge patients is set by the state of Maryland. The state regulatory agency is proposing that rates not be increased at all next year and, in fact, is even considering decreases.
Hopkins has the quality it enjoys today because our predecessors made excellent investments in its faculty and in the facilities in which they work. Hopkins today cannot fail to make the investments needed so that our successors will have an equally strong base upon which to work. We have a dedicated and loyal work force, and we recognize that treating all our employees fairly and equitably is the right thing to do. We have a comprehensive benefits package for full-time and for part-time university and health system employees. We know that many of our contractors also have comprehensive benefits for their full-time employees. Although the number of part-time contract employees is relatively small, we have begun work to identify ways to improve benefits for this group of workers.
Hopkins values the contribution made by all members of our community to the success of the institutions. Further, we believe that members of the Johns Hopkins community should enjoy at least a basic quality of life and should live free of poverty. We are in a strong position to set an example in the city by ensuring that its workers are paid a living wage. Johns Hopkins further encourages all employers in Baltimore to follow its example.
Over the next few weeks we will be putting our wage increase plan into motion. We will keep you informed of our progress.