Living Wage: Next Stage

On the last day of January, President Lawrence H. Summers announced that the University would adopt the "living wage" recommendations of the Harvard Committee on Employment and Contracting Policies. (The text of the president's statement is available at HCECP delivered its final report in mid December; the document (available at climaxed months of intensive work on the issue by the committee that former president Neil L. Rudenstine created as part of the agreement ending the lengthy occupation of Massachusetts Hall last spring (see "Airing Out the Living Wage," January-February, page 66). The recommendations represent a substantial victory for the living-wage campaigners, even though Harvard does not plan to enact any of their demands literally. "All of the individual demands were rejected in their specificity," says professor of economics Lawrence F. Katz, HCECP's chairman.

After a month-long "comment period" that subsumed the Christmas vacation, Summers was expected to announce his decision on the report's recommendations on January 18. Instead, he waited almost two more weeks to "distill what he has heard from a wide variety of people inside and outside the University," according to Harvard spokesman Joseph Wrinn. In the meantime, activists kept up their pressure on the University with rallies, including one on Martin Luther King Day that drew several hundred people to Harvard Square.

The living-wage campaigners have sought improved pay scales for lower-paid Harvard workers like security guards, custodians, dining-services employees, and parking attendants--rates that would at least match the floor of $10.68 per hour adopted by the city of Cambridge. As of September 2001, Harvard directly employed 392 workers--all unionized--earning less than this figure; these low-paid workers represented 2.7 percent of the University's 14,506 employees. An additional 579 on-campus contract workers (mostly nonunion), accounting for 63 percent of 919 such employees, also earned under $10.68.

HCECP unanimously concluded that Harvard's "wage and contracting practices for lower-paid workers fall short of meeting the University's goal of being a good employer." To remedy this, the report proposed a two-pronged attack: first, that Harvard raise pay immediately for low-paid employees by renegotiating wages covered in existing collective bargaining agreements--specifically, lifting hourly wages to a minimum range of $10.83 to $11.30; second, that Harvard enact a wage-and-benefits policy that ensures parity between the University's in-house pay scales and rates paid to those working in comparable jobs at Harvard under the aegis of outside contractors.

The committee rejected the demand put forward by the Progressive Student Labor Movement (PSLM), the group that spearheaded the Massachusetts Hall occupation, that Harvard ban all outsourcing of labor. Instead, the report says that "the University must ensure that outsourcing is used to increase quality and spark innovation, not to depress the wages of Harvard's own service employees."

This statement goes to the core of the committee's analysis. Outsourcing has been the central mechanism that has driven down mean real hourly wages for Harvard's in-house service workers by 7.5 percent between 1994 and 2001 (from $12.47 to $11.54 per hour as of last September). Meanwhile, the demographic characteristics of these workers have shifted: immigrants, Hispanics, and those lacking a high-school diploma now constitute a much larger fraction of Harvard's service workers. (As of last September, 76 percent of the lowest-paid workers were nonwhite and 43 percent had not completed high school.) As the University moved toward hiring outside contractors to provide services formerly performed by Harvard staff (markedly so in custodial and uniformed-guard services), "outsourcing competition put pressure on Harvard's unions to bring wages down to the rates paid by outside contractors in several service sectors," says the HCECP report.

In the case of custodians, for example, Harvard staff and contract workers were represented by the same labor union, Service Employees International Union (SEIU) Local 254. In 1996, that union and Harvard agreed to lower the pay of nearly all Harvard's in-house custodians to levels specified in SEIU's area-wide master agreement. "[T]he committee is troubled by allegations that the previous leadership of SEIU Local 254 failed to adequately represent the interests and preferences of its members both within and outside of Harvard," says the report. Overall, HCECP concluded that the decline in real wages for low-paid Harvard service workers during the past decade "to a large extent represents the effects of wage pressure created by outside contracting in combination with weakness on the part of at least one critical local union (SEIU Local 254)." The University has reopened negotiations with the union and expects to address the wage portions of other contracts after the SEIU talks conclude. The plan is to have all such bargaining finished or in progress by May 2002.

HCECP rejected the idea of adjusting wages annually to reflect the Boston-area cost of living, a policy that PSLM advocated. Furthermore, the report intentionally avoided fixing any permanent, specific minimum wage for Harvard. (But the committee acknowledged that "we are sympathetic to the intended goals of such a policy.") Many HCECP members felt that to define a wage floor would address the symptoms, but not the causes, of declining pay. And if unions tried to push pay above the specified minimum, "contractors could still undercut them by paying the minimum Harvard wage," the report asserts. "Thus the wage floor could also become a kind of wage ceiling." According to the report, the proposed parity-wage-and-benefit scheme would avoid this problem. "The parity-wage system has advantages," says Katz. "It uses collective bargaining--the most effective mechanism in the United States for improving the living conditions of workers. Historically, it has led to higher wages." Harvard plans to draw up a parity-wage-and-benefits policy by the end of March.

HCECP's rough estimate of the annual cost to Harvard and its contractors of paying those higher wages is $2.4 million to $3.7 million. Assuming that security workers' pay would rise in any case, especially given the fallout from September 11, the adjusted overall cost of the committee's proposals would fall in the $1.9 million to $2.9 million range, according to the report.

The HCECP recommendations addressed the quality of work life as well as compensation, and Summers also endorsed the suggestions in this area. "The University is in the process of developing a statement of workplace values and norms that will include a commitment to dignity and respect for on-campus workers at all levels and a statement of rights and responsibilities in University employment," his statement declared. Harvard will take several steps to improve the work environment, including a training program for those who manage service workers and enriched education and training opportunities.

Although the entire committee backed the recommendations presented, the report did include three "concurring statements" signed by a total of eight committee members who wished to voice views that diverged from the consensual document. The lengthiest of these by far was a seven-page addendum signed by three students and two union workers, who advocated, among other things, a total ban on outsourcing, an explicit wage floor, and protection of workers' capacity to organize labor unions. (A twentieth member, professor of economics Caroline Hoxby, resigned from the committee in October, claiming that its data-gathering process was biased in favor of the living-wage position.)

PSLM activists have consistently emphasized the moral aspect of the issue, contrasting the size of the University's $18-billion endowment with the penury of its service workers, some of whom, the PSLM claims, qualify for food stamps. For its part, HCECP "considered moral and ethical issues as well as economic issues," says Katz. The report itself, however, generally couched such concerns in more neutral language, such as: "Harvard has an obligation to be a good employer to fulfill its teaching and research missions. A good employer provides the wages, benefits, and other conditions of employment necessary to attract, retain, and motivate employees."

Not all members of the University community endorsed even this analysis. In a Crimson column, Jason L. Steorts '01 wrote that "HCECP essentially wants you to believe that Harvard's academic aims are compromised because cashiers at the Greenhouse [the Science Center cafeteria] make less than $10.83 per hour. Please. I suppose, then, that once Harvard's least skilled and (forgive my frankness) most replaceable workers get raises, we'll see Nobel Prizes and research grants rain down like manna from heaven?...HCECP doesn't offer one shred of evidence demonstrating a relationship between the wages of Harvard's lowest earners and the University's academic output...."

On occasion, HCECP's reasoning leaned toward a more explicitly ethical grounding. The report argued, for example, in favor of "compensation levels that significantly contribute to ensuring that Harvard's workers and their families enjoy at least a minimally decent standard of living....A good employer should work to ensure that its lowest-paid and most vulnerable workers share in economic prosperity and do not disproportionately and inappropriately bear the brunt of adjustments to economic and financial hardship."


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