PART II:

The Problems With Harvard’s "Solution"

 

Background on Harvard’s Reforms

In April, 1999, President Rudenstine responded to pressure created by the Living Wage Campaign by appointing the Ad Hoc Committee on Employment Policies. The committee was composed of three administrators and five faculty members, all chosen by Rudenstine, and charged with the task of researching the conditions of the university’s "contingent workforce" and making non-binding recommendations to the President. The Ad Hoc Committee met 17 times, and ultimately released its report on May 4, 2000. The report’s recommendations were immediately adopted by Rudenstine and the Harvard Corporation.

As is explained below, the proposals contained in the report do not adequately address the problem of poverty at Harvard. Nevertheless, since adopting the report, administrators have maintained that they will consider no future changes. According to Provost Harvey Fineberg, "strenuous effort" was expended to produce this report, and with its adoption, Harvard administrators have no intent to look any further into the issues raised by the Living Wage Campaign. Both Fineberg and Rudenstine have told the Living Wage Campaign that they think this is fair because, in their view, the committee’s report represented the views of our entire community; this is in spite of the fact that the committee was selected by Rudenstine alone, and included no students, workers, or union representatives. Students spoke once to the committee, and once additionally to the Chair of the committee. The only worker with whom the committee spoke was brought by a member of the Living Wage Campaign; the committee itself made no effort to speak with workers. And, so far as we know, the committee did not speak with a single union representative.

The complete text of the Ad Hoc Committee’s report can be found at <http://www.provost.harvard.edu/adhoc/index.html>. The committee was composed of:

    1. D. Quinn Mills (Chair), Albert J. Weatherhead Jr. Professor of Business Administration, Harvard Business School
    2. David M. Cutler, Professor of Economics, Faculty of Arts of Sciences
    3. Paul F. Levy, Executive Dean for Administration, Executive Vice President, Harvard Medical School
    4. Nancy L. Maull, Administrative Dean, Faculty of Arts and Sciences
    5. Barbara J. McNeil, Ridley Watts Professor of Health Care Policy, Member of the Faculty of the Harvard-M.I.T. Division of Health Sciences and Technology, Professor of Radiology, Harvard Medical School
    6. Frank E.A. Sander, Bussey Professor of Law, Associate Dean of the Law School
    7. James H. Stock, Roy E. Larsen Professor of Political Economy, Kennedy School of Government
    8. Sally H. Zeckhauser, Vice President for Administration

Four administrators additionally served as staff to the committee:

    1. A. Clayton Spencer, Associate Vice President for Higher Education Policy
    2. Polly Price, Associate Vice President for Human Resources, Office of Human Resources
    3. Kim A. Roberts, Director of Labor and Employee Relations, Office of Labor and Employee Relations
    4. Robert W. Iuliano, University Attorney, Office of the General Counsel

 

 

Summary of Harvard’s Reforms

The Ad Hoc Committee on Employment Policies rejected the implementation of any base wage and benefit standard for Harvard workers, arguing that workers do not need higher wages with benefits so much as supplemental benefits and programs alone. It proposed five reforms:

  1. Expansion of the Bridge Program. The Bridge Program is a literacy education program; the committee recommended that it be made available to all entry-level service employees, whether directly employed or hired through outside contractors. The program was to be free and able to accommodate 500 to 1,000 participants.
  2. Health benefits. The committee recommended that Harvard provide health benefits to all directly-hired employees who work at Harvard for at least 16 hours per week. It additionally suggested a requirement for subcontractors with contracts for at least 20 employees, at least $50,000, and at least nine months: these contractors should provide the same benefits to employees who work at Harvard for at least 16 hours per week as they provide for full-time workers. If the subcontractor’s full-time workers receive no benefits, the Harvard-based employees working at least 16 hours per week should receive the same benefits as managers in the subcontracting firm.
  3. Extended benefits and perquisites. The committee suggested that part-time unionized employees, and casual workers who have worked at Harvard for at least one year, be made eligible for the following benefits and perquisites: ID cards; eligibility for annual raises, bonuses, and paid time off; subsidized T passes, eligibility for group home and auto insurance rates; access to libraries and museums; inclusion in work-related training; eligibility for Harvard’s Tuition Assistance Program and workplace education programs; and access to Outings and Innings, Harvard’s program of discounted purchases for employees. The committee acknowledged that part-time unionized employees are already eligible for a number of these benefits and perquisites. These benefits and perquisites are not to be offered to subcontracted workers, regardless of their length of service at Harvard.
  4. Guidelines for contracting. The committee recommended that Harvard develop and adopt guidelines for firms with which it makes contracts for at least nine months and $50,000. It suggested that the guidelines address the following concerns: the bidding process; the contractor’s compliance with applicable laws; health insurance (as explained in #2); factors to be considered in selecting outside companies in lieu of University workers; and the availability of training programs.
  5. Fringe benefit rates. The committee recommended that Harvard study its fringe benefit rates and consider creating a single rate for all employees. Currently, Harvard has five different rates for (1) faculty, (2) administrative and professional staff, (3) unionized staff, (4) casual workers, and (5) post-doctoral fellows. The committee acknowledged that this five-tiered system creates incentives to use workers who receive fewer subsidized benefits.

 

Analysis and Critique of Harvard’s Reforms

The committee's recommendations are inadequate to address the problems of low-wage labor on our campus, and they are no substitute for a living wage with benefits. Although the university administration has attempted to frame the committee’s reforms as generous, they in fact range from minor improvements to policies that actually threaten to hurt hundreds of workers. Ultimately, the report represents a very small concession that is designed to deflect attention away from the primary cause of poverty at Harvard: poverty wages and the ongoing denial of benefits.

The Committee report seeks to obscure the problems with Harvard workers' wages by claiming that workers need everything except take-home pay. Notably, the report stresses the importance of benefits at the expense of wages. The Living Wage Campaign fully agrees that benefits are an integral part of fair compensation; indeed, we have always taken the position that workers at Harvard deserve a living wage with benefits. Yet we reject the committee's implication that benefits can substitute for wages. In particular, we reject the claim that workers who are paid less than a living wage of $10.25 per hour can afford to live in our community even with benefits: this is because the city's living wage standard was designed for workers who received benefits in addition to their wages. Our demand, which calls for a living wage, adjustable for inflation, as well as benefits, addresses the real costs of living near Harvard much more responsibly than the Ad Hoc Committee's proposal for increased benefits alone does. And our position is supported by every study we have seen on the local cost of living, all of which indicate that "total compensation"—wages and benefits combined—of $10.25 per hour is not enough to support a family in this area.

Not only is the proposal to extend benefits without a wage increase flawed, but the committee’s method of extending benefits is itself fraught with problems. In fact, it threatens to hurt precisely the workers it is supposedly designed to help. The committee recommends the extension of health benefits and other perquisites for directly-hired employees who work on average more than 16 hours per week. It additionally recommends that long-term subcontractors unify benefit packages for all their Harvard-based employees who work at least 16 hours per week: part-time workers who meet this hourly standard are to be given the same benefits as the contractor’s full-time workers, or its managers, if the firm’s full-time workers receive no benefits. The Harvard Living Wage Campaign fully supports both Harvard's recognition of its responsibility to subcontracted workers and its professed interest in providing health care benefits and other perquisites. However, there is good reason to believe that the hours requirements established in the report will actually be used to deny workers the benefits promised them. The hours requirements offer a powerful incentive for the university to reduce the hours of work for current as well as future Harvard employees and subcontracted employees, and to employ them for shorter periods of time. To take an example, all janitors at the Divinity School are currently hired directly by Harvard. They all work fewer than 20 hours per week precisely because if they worked more than 20 hours per week, the university would be forced to provide benefits and higher wages. Under the committee’s plan, it is very likely that every part-time Harvard worker who currently works at least 16 hours per week without benefits will see his or her hours reduced to 15 hours per week. The ultimate effect would be to decrease the hours of work provided for workers, reduce their job stability, and increase the number of jobs they have to work—all without increasing their access to benefits. Thus, the committee's recommendation actually threatens to worsen rather than improve working conditions at Harvard.

The report’s benefits provisions present an additional problem for subcontracted workers. The report requires subcontractors to provide the same benefits for all Harvard-based employees who work at least 16 hours per week that they provide for full-time workers. However, it specifies no minimum benefit requirements, and does not require that subcontractors’ benefits be comparable to those which the university provides to directly-hired employees. As written, this policy actually provides contractors with an incentive to reduce benefits packages for all employees. There is a provision stating that firms which provide no benefits to full-time employees should match Harvard-based workers’ benefits to the firm managers’ benefits, and this clause makes it unlikely that firms would eliminate benefits for all their full-time workers. However, it provides an incentive to offer very small and inadequate benefits packages to workers as a way of complying with Harvard’s rule and maintaining generous managerial packages without increasing costs. Like the wording of the hours requirements, this guideline threatens to hurt hundreds of campus workers, as well as all the employees of Harvard’s subcontractors who work elsewhere. It is not at all what the Living Wage Campaign has in mind when we demand benefits for workers.

The committee went on to write that workers need literacy training more than they need adequate wages. While the proposal to extend literacy programs is laudable, it is not true that merely being literate in English guarantees a worker a living-wage job. Indeed, Harvard proposes to continue offering these employees compensation as low as $6.50 per hour without benefits, whether they are literate or not. Even if some workers are able to use literacy education to find higher-paying jobs, no amount of education will eliminate the posts of janitor, security guard, and cook at Harvard; and as long as the administration refuses to establish a living wage standard for these workers, it will continue to create poverty.

The Ad Hoc Committee's other proposals are peripherally-relevant improvements at best. We certainly agree that Harvard workers should have access to all the privileges associated with Harvard: ID cards, tuition assistance, access to libraries and work-related training, and so on; in fact, we think these perquisites should be extended to even more workers than the committee recommended. But these perquisites are essentially limited remedies for many years of broadly inadequate labor policies: it is ridiculous that part-time and long-term casual workers were not already eligible for annual raises or access to museums. The proposals begin to fix some of these egregious holes in Harvard’s labor policies, and might make appropriate complements to a living wage policy. But they do not substitute for a living wage and benefits. In fact, as many people have noted, for the administration to present them as substitutes is insensitive and insulting. Many of Harvard's employees must work second and even third jobs to make ends meet, given Harvard's poverty-level wages. That the administration would offer these people discounted museum admission at the end of their sixteen-hour days indicates how far out of touch they are with economic reality.

Ultimately, Harvard's failure to produce an acceptable plan to ameliorate poverty conditions on campus stems from a fundamental misconception that poverty is due to lack of skills. Lack of skills can not explain why a janitor who used to receive $12.85 per hour plus benefits saw his compensation drop overnight to $8.50 per hour without decent benefits when his job was outsourced. Lack of skills can not explain why a worker who used to work one job and live in Cambridge today works two and commutes from a less expensive suburb. The problem is not any lack of skills on our campus, but Harvard's erosion of wages and use of outsourcing to underpay its workers.

Although we are proud that the Living Wage Campaign has forced the Harvard administration begin to recognize its responsibility to workers on this campus, the proposals offered by the Ad Hoc Committee do not meet that responsibility. The report acknowledges that Harvard is responsible for the working conditions of its directly-hired and subcontracted workers, but its proposed guidelines are peripherally relevant at best and damaging at worst.

The Living Wage Campaign has a vision of Harvard that differs fundamentally from that of the administration and its committee. Contrary to the claim of the committee, we do not agree with them that compensation should be "fair and competitive." We believe instead that compensation should simply be fair. Wages must meet basic human needs, and can not be determined solely by the market, for wage markets as they now operate are blind to justice. Wages should be set so that workers in our community are able to live in our community. Wages should be set so that workers can comfortably support their families without working two and three jobs. These are simple ideas, and we find it morally shameful for the richest university in the world to dance around them. We demand more of Harvard than the proposals put forth by the Ad Hoc Committee, and we will continue to work for a living wage and benefits until they are guaranteed for every Harvard worker.

 

Current Implementation Problems

Perhaps more surprising than the inadequacy of the Ad Hoc Committee's report is the failure of the administration to implement it in a timely manner. Six months after the report's plan was approved by the Harvard Corporation, the Living Wage Campaign had spoken with workers from all areas of the university, and had yet to find a single worker who had heard of the increased access to benefits which the report promises. Workers who were eligible for benefits were still not receiving them, and didn't even know that they should be receiving them. In fact, we spoke with workers who had been eligible for benefits before the implementation of the report, who didn't receive them, and didn't know that they should. Apparently management didn't have to cut workers' hours to deny them benefits: by not informing employees of the content or adoption of the report, they found an even easier way to deny them the benefits they were due.

In October 2000, we brought this problem to the attention of President Neil Rudenstine, Provost Harvey Fineberg, and Associate Vice President For Human Resources Polly Price. Rudenstine and Fineberg explained to us that implementation takes time. Price told us that she had sent notice to the unions representing dining hall workers, janitors, and security guards on Friday, October 20, three days before our conversation and roughly five months after the adoption of the report. Strangely enough, when we spoke with Price again on November 21, 2000, she told us the same thing—that she had just sent notification to those unions during the week before our conversation.

Moreover, Price admitted in our November conversation that Harvard had made no moves at all toward implementing the benefits now owed to subcontracted workers. Price said that she would not begin meeting with the deans in charge of subcontracting until January, 2001, which was some eight months after these changes were approved. What's more, the changes will only apply when contracts are renewed. In other words, many workers who should be receiving benefits under this plan cannot expect to receive them until several years from now. This is wholly unnecessary; it is possible to modify the existing contracts right now. But because of a crippling lack of interest or enthusiasm at the administrative level, hundreds of workers will remain without benefits for the foreseeable future. At this point, not only are subcontracted workers ignorant of their new benefits, but so are their managers. Subcontracting firms have not even been notified of the code of conduct by which they must now abide.

Although Price claimed in November that she will personally monitor workers’ hours to ensure that managers do not cut hours to avoid paying benefits, report implementation continues to be much worse than we anticipated. The Bridge Program served only 143 workers during the fall 2000 semester—hundreds fewer than anticipated. This is not for lack of interest: some of our members have spoken with eligible workers who signed up for the program, but, months later, still had not heard back from management. According to Price, attendance was not projected to increase during the spring semester. Beyond the Bridge Program, in the process of extending perks like museum attendance to long-term casuals, it became clear that 450 casual employees—who still are not eligible for health benefits—had served Harvard for more than a year. We believe that many of these workers in fact work more than 16 hours and should be eligible for benefits. In fact, one member of the Living Wage Campaign is in just such a position: he is employed as a casual through one branch of Harvard and as a part-time worker through another. Although his total weekly hours far exceed 16, he receives no benefits. This is a problem which is currently being monitored only by the outreach efforts of the Living Wage Campaign; Harvard is making no effort to look into it.