FAQ on the economic crisis
and its impact on Harvard and our jobs
Updated December 22, 2008
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Q: Is Harvard in serious financial trouble?
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A: Harvard officials have announced that the value
of the Harvard endowment has declined by at least 22% (and probably a good bit more)
since July. The losses will lead to lower-than-expected endowment payouts for operations
next year. Because endowment income is a large portion (34 percent last year) of
Harvard’s annual revenues, that decrease in revenue will have a significant effect
in the short term. It also stands to reason that income from donations and tuition
will be reduced in the near future, as donors and students’ families feel the economic
pinch. At the same time, it is not obvious that deep cuts in operating budgets are
absolutely necessary. There are a number of measures the University could undertake
to minimize the impact of endowment losses. Those measures could include distributing
a higher percentage of endowment earnings, slowing down the construction of the new
Allston campus, and investing in cost-saving initiatives, such as efforts to conserve
energy and improve employee wellness.
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Q: Are Harvard staff members in danger of losing their jobs?
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A: It is too early to know for certain, but we hope there
will not be a large number of layoffs. Losses in the value of the endowment will have a
differing impact in the separate Harvard units. In some of the schools and departments
more seriously affected, there may be budget-cutting measures. But HUCTW leaders are
engaging local management leaders to call for a focus on cutting consulting, travel and
catering budgets before people, and slowing down construction projects rather than making
cuts which would affect our job security. Our Agreement also states that we “encourage
the use of attrition and voluntary layoffs in place of job elimination.” If any of our
co-workers does end up facing layoff, she or he will get a great deal of help from our
Work Security program (for more information, please visit our
Work Security page). As has been said in a few recent HUCTW
meetings, “it’s a good time to be in a union.”
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Q: Will we get our negotiated increases in July?
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A: Yes. Those raises are provided for in a contract which
is binding on the University and HUCTW. Effective July 1, 2009, the typical HUCTW member
with at least a year of service will receive an increase of 4.5% to 5% (a 2.2% structural
increase plus a progression increase). HUCTW members can use a
“salary increase calculator” on the Union’s website
to estimate the July 1 increase more precisely. (To complete this worksheet, you will need
your current salary, your job grade, your hours per week, and your length of service on
July 1, 2009.)
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Q: Has the University proposed any benefit reductions or other
cost-cutting changes in our contract?
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A: No. Harvard administrative leaders have not communicated
any concerns to HUCTW leaders about any of our benefits. Our hope is that cost reduction
strategies will not focus primarily on staff compensation or benefits (see first question,
above).
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