What are SLAM's demands?
Aren’t layoffs necessary because of the drop in the endowment?
How does Harvard's non-profit status affect its commitment to workers?
What are examples of concrete financial steps Harvard can take prevent layoffs?
What have other universities done to take on the burden of the crisis collectively?

What are SLAM's demands?

We demand a Harvard that is just. We demand a meeting with the President, the Corporation, relevant University administrators, students, and staff in order to begin working together on creative and alternative solutions to layoffs; we demand that Harvard suspends layoffs and recall all workers, full-time and temporary, laid off due to budget cuts since October 2008; we demand that Harvard not reduce the hours of its workers putting them below a living wage; we demand that Harvard not ask its remaining workers to do an unsafe amount of additional work due to the hiring freeze; we demand that Harvard treat its workers with dignity and respect.

Aren’t layoffs necessary because of the drop in the endowment?

No, they are not. Although Harvard is currently looking at a budget deficit of $220 million through 2010, there are more responsible ways of saving money besides laying off Harvard’s lowest paid workers. We believe sacrifice should be spread across all income levels, with layoffs as the last resort. Our alternate proposals, which amount to $79 million in savings for Harvard University per year, are listed in the “What are examples of concrete financial steps Harvard can take to preserve Harvard jobs?” section later in this FAQ. Assuming that the cost of employing the average full-time Harvard janitor is $45,000 a year including benefits, Harvard could save 1,755 janitorial jobs, far more than Harvard would lay off.

How does Harvard's non-profit status affect its commitment to workers?

As a nonprofit, Harvard does not pay sales tax, property taxes, and can issue tax-exempt bonds. Boston officials estimate that if Harvard paid property taxes, the city would collect ten times this amount Harvard currently pays in lieu of taxes.

Harvard students rely on federal Pell grants to pay for tuition, decreasing Harvard's financial aid expenses. Parents of children at colleges also receive tax credits and deductions for higher education expenses. There is a federal tax exemption for scholarship and fellowship income.

82% of the research done at Harvard is directly funded by the federal government, most notably from the National Institutes of Health (54% of Harvard's total) while the non-federally funded research is made possible because of the tax deductions enjoyed by corporate donors and foundations. In Fiscal Year 2008, Harvard received $535 million in federal research dollars.

Harvard was able to build an impressive endowment because gifts received to the university are tax deductible, and because earning from the university's investments are exempt from income and capital gains taxes.

Harvard enjoys the financial benefits of a nonprofit, but with these benefits come responsibility. If tax-payers are to commit so much to Harvard, then Harvard has a commitment to tax-payers and must provide secure jobs that support the economy in times of uncertainty.

What are examples of concrete financial steps Harvard can take to prevent layoffs?

If Harvard’s costs are 50% personnel, and must cut expenses in this field, we propose that Harvard make cuts into all Harvard employees, instead of just laying off and cutting hours for the lowest paid staff.

We offer these concrete proposals—based on assumptions drawn from public information about number of workers and average wages at Harvard. Other universities have enacted similar measures. Furthermore, we emphasize that these are only examples—many more creative solutions, focusing upon shared sacrifice, should be considered, formulated, and enacted. We also stress that these are short term solutions that should be phased out as Harvard’s economic pressure decreases. Together, these three proposals would produce about $79 million in savings for the University per year.

1. A Graduated Paycut for More Highly Paid Employees

$100,000-$200,000: 5% cut
$200,000-$300,000: 10% cut
$300,000 to $1 million +: 15% cut

If we assume the average cut would be 8.5%, FAS would save $15-16 million., and Harvard University would save about $50 million.

2. Slight Reduction in Retirement Benefits for Employees Making More than $100,000

Right now Harvard matches up to 10% of the annual salary of employees making over $100,000 and puts it into a 403b retirement account. This contribution is relatively high compared to other institutions’ retirement benefit packages, with some doing away with the program entirely. While we do not recommend such extreme measures,, Harvard could cut this to 7%, saving $2 million.

3. Reducing Paid Vacation Days for Employees Making More than $100,000

For many companies, the period between Christmas and New Years is an unpaid vacation. For Harvard employees, this time is paid vacation. If Harvard stopped paying for this vacation time for its $18,000 employees, this cut would save the University $27 million.

What have other universities done to take on the burden of the crisis collectively?

Brandeis University is giving faculty until December 19th to sign onto an effort to take 1% pay cuts; when 30% are in agreement, the plan will go into effect. The Chair of the Faculty Senate has explained this effort as in line with Brandeis’ “traditional, historical commitment to social justice.” Other professors are considering putting money into a charitable fund to secure jobs.

At Arizona State University, top administrators will have 15 days of their vacation go unpaid.

The University of Tennessee President and his executive staff will all take a voluntary pay cut of 5%.

The chancellor of Washington University in St. Louis will take a voluntary pay cut of 10% for the next academic year.

The Stanford president and top administrators have taken a voluntary 10% pay cut for the next two academic years.