Deadlocked over proposed pay cuts, the University of Hawaii and the faculty union appear headed for a legal showdown that could result instead in significant layoffs of UH personnel, including teachers and administrators. The unusual circumstances caused by the recession call for an extra effort to resolve the dispute out of court.

Wages during labor negotiations normally are extended beyond the expiration date of the past contract, the assumption being that future pay will increase or, at worst, stay the same. But these are not normal times, and the UH Professional Assembly—the professors' union—has rejected what the administration called its final offer.

The faculty contract that expired at the end of last June contains what is called an “;evergreen clause,”; which states that the contract “;shall continue in force”; beyond its expiration date. It means that faculty salaries—the median is $79,671 throughout the UH system, $91,200 at Manoa—will remain the same until a new pact is signed, even though the money needed to sustain that level comes up short and the state Constitution requires a balanced budget.

Despite the evergreen clause, the university announced it would implement a 6.7 percent faculty pay cut for 18 months beginning Jan. 1. The faculty union threatened to go to state Circuit Court to enforce arbitrator Mario Ramil's ruling in July that wages should remain the same because of the contract clause.

The administration may seek relief from the Hawaii Labor Relations Board or federal court.

Following raises of 7 percent and 11 percent in 2007 and 2008, respectively, the union actually agreed to a 5 percent pay cut over two years—as long as UH would promise 7.5 percent paybacks in each of the next two years, regardless of the economic atmosphere.

Dream again.

None of the other state-county unions' contracts contain an evergreen clause. That means their members, already experiencing pay cuts and furloughs, may be required to take another hit in adhering to the unfunded state mandate to keep UH faculty salaries at their present level.

The faculty union recognizes that “;a significant number”; of its members are not protected from layoffs by tenure. Those potential sacrificial lambs fill spots funded from the state general appropriations, special or revolving funds and other government and private grants or contracts.

As Hawaii's economic doldrums persist, the financial crisis emanating from UH will worsen with each paycheck.

Time to return to Economics 101.