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K Marx The Spot

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05 January 2003

Boola Boola Boola Boo

In New Haven, September means that thousands of fresh-scrubbed faces arrive in town to attend classes at Yale University. This September also marks the ninth strike by workers at Yale since 1967.

In 1984, the clerical and technical workers in Local 34 struck for better wages and benefits, and Yale's maintenance workers from Local 35 refused to cross picket lines. Yale could have agreed to the unions' offer of binding arbitration. Yale could have softened its traditional hard line and avoided a long strike. No, instead, Yale tried to break Local 34. After almost 11 weeks of a strike, the workers won on most of their demands.

(Perhaps the administration thought that students like me would get sick and tired of doing their own cooking and cleaning. I, for one, was getting sick and tired all right—sick and tired of one of the richest nonprofits in the world trying to stick it to its manual labor force.)

And now, Yale is up to its same old tricks. It's employing the same old tactics to break the same unions. Many unionized employers generally avoid strikes or lockouts by negotiating and compromising on key issues. Verizon, for example, has just reached agreement with the Communications Workers of America. While Verizon was preparing for a long strike—it spent millions of dollars on a public relations offensive and planned to use management to maintain skeleton crews—it rapidly found common ground with its employees.

Two things make Yale different from a unionized utility or manufacturing concern. First, Yale doesn't make anything that the public or the polity actually needs, other than graduates with the Yale Seal of Approval. Strikes at Yale don't affect tuition. If Verizon goes on strike, at least some of its customers will notice. New customers will not get phone lines or other services that they want, and Verizon won't get paid for those services. If the United Auto Workers go on strike at General Motors, production will cease on several models of cars, and General Motors won't be able to sell them.

Second, Yale's $11 billion wealth is tied up in its endowment. At for-profit companies, cash reserves often serve direct purposes: for capital improvements, for acquisitions, for paying dividends. At most non-profit organizations and foundations, endowments serve as both rainy-day funds and as vehicles for generating income for yaers to come. Most American non-profit organizations face modest taxation on their accumulated holdings, however, if they do not spend substantial portions every year.

But universities and other educational institutions do not face this restriction. The danger is that a large endowment can become an end unto itself: eventually the university serves the endowment, not vice versa. Yale's endowment now boasts 11 figures to the left of the decimal point. Yet Yale is fundraising as much as ever. It expects alumni to contribute to its Annual Fund, or to various Capital Campaigns, and, of course, to make major gifts for the benefit of the endowment. Yale is in the middle of a huge building program that aims to to renovate substantially all of its undergraduate dorms and renovate or replace most of its science buildings. Endowment principal will fund none of this ambitious program. Yale's own website brags that $5.2 billion of its endowment value represents the value of donations and investment returns on those donations. Gifts to the endowment "continue[] in perpetuity," so that they never provide anything like full value for money. They do, however, sustain the endowment, and the endowment is all important. Anything that could endanger its sacrosanct status, like giving workers a fair deal, is therefore anathema. Boola boo!

(For up-to-date information on what's happening at Yale, please check out Yale Insider, the detailed and pithy weblog published by the unions at Yale.)

Posted by Tim W at 1/05/2003 02:47:00 AM

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