Have-nots Shouldn't Need to Fight the Haves for Wages and Respect

It makes sense on Thanksgiving to consider the kinds of dramatic differences in wealth that plague this country and are the subject of much current protest. The story I want to tell comes from my alma mater, Harvard University, and includes both troubling information and some reason for hope. This is a story of the fabulously wealthy Harvard employees and the lowest-paid, the janitorial staff.

As a member of the Radcliffe/Harvard class of '69, I have for many years been one of the signatories on a series of letters to the presidents of Harvard about the appalling financial inequities within the institution. Our classmate William Strauss started these letters, and since his death, David Kaiser has taken over the drafting of them and efforts to get the information in the letters out to the public through the media. (I have also been an adjunct on the Harvard faculty and director of a major research project there, and I currently have two unpaid Harvard appointments, both of which I value, because much excellent work happens at this institution.)

Our primary target has long been the whopping payments that the university pays to the managers of its financial endowment. These payments are out of place, to say the least, for an institution that is supposedly a non-profit, and as we have noted, every Harvard student could receive a full scholarship, enabling many graduates to go into nonprofits and other work for the public good rather than having to take on high-paying jobs they don't care about, in order to repay college loans. The response from those at the top of the university has consistently been to claim that they must pay the fund managers enormous amounts of money, because through their expertise, they make so much money for Harvard. They made these claims despite the fact that not even at Yale were exorbitant payments made to people managing their endowment. Let us look at the numbers.

In fiscal year 2008, the year before the current financial crisis, Harvard paid $70.5 million to its fund managers, and the top employees received $25.7 of that amount. According to a Harvard Management Company report in late 2009, the endowment lost 27.2% of its value during the fiscal year that ended in June of 2009. They pointed out that three of their five major categories of investment had fallen far more than their benchmarks, and the other two had done only slightly better. As we wrote in one of our letters, "Under the circumstances one would have expected fund manager compensation to have fallen substantially-indeed, one would not have been surprised to see bonuses eliminated altogether, at least in some cases."

However, during the financial catastrophe, when the university laid off thousands of personnel and halted a major construction project, it paid the top five fund managers $25.2 million in salaries and bonuses (bonuses at a time like that!), which was only 2% less than what it paid them the previous year. Our letter included the following description of one of the implications of this:
"The bonuses paid merely to the top five mangers could have saved the jobs of several thousand Harvard employees that the University was forced to lay off."

When the information from fiscal year 2010 came out, it turned out that although total compensation for the fund managers fell 18% (far less than the decrease in the endowment), unbelievable though it may seem, compensation for the top five managers again increased, this time by a total of $2.4 million.

In light of all of this, it was perhaps not surprising but nevertheless shocking to learn that this fall, when the janitorial staff asked for, among other things, a fair wage and fair distribution of promotions, job assignments, and overtime, Harvard first said it was too poor to grant the requests, according to Leslie Cohen, speaking for SEIU Local 615, which represents the nearly 700 custodians at Harvard. Said Cohen in an email message, "To date, Harvard astoundingly appears to be pleading poverty, even though it simultaneously announced a 21.4% increase in last year's endowment." The union and its supporters fought hard, and this story has a happy ending. The janitors overwhelmingly ratified a five-year contract that, according to their press release, "raises wages, keeps health care affordable, increases opportunity for full-time work, institutes a seniority system (instead of favoritism) in filling job vacancies, and provides ALL contracted-out workers at Harvard with the same benefits as direct employees." It also included a childcare allowance fund to help employees pay for the cost of day care. Quite a victory.

But the victory should not have been so hard to achieve. Harvard janitor Jean-Claude Mondesir said, "It was not easy. It was a fight. My coworkers who came to meetings and showed they were ready to strike played a big role in winning this contract, along with support from the students." And Mr. Mondesir noted that gains were achieved for security guards and kitchen crews as well.

In the future, let us hope that institutions that pay some employees stratospheric sums, even when they seriously fall down on the job, will not force their lowest-paid and worst-treated to fight for better wages, more reasonable working conditions, and dignity. Harvard and other institutions should compete with each other to model the right way to treat their workers.

©2011 by Paula J. Caplan All rights reserved

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