The Fictional Living Wage

An unfortunate consequence of the constantly changing expectations of the Progressive Student Labor Movement (PSLM) and The Crimson is that they have downplayed the magnitude of the changes advocated by the Harvard Committee on Employment and Contracting Policies (HCECP) in its report on Harvard’s employment practices.

Foremost among the changes suggested by the report is an immediate wage increase, one that would put Harvard’s wages higher than the Cambridge “living wage” so strenuously demanded last spring. Also significant is the proposed “parity” wage system that would give outsourced workers and Harvard-employed workers equivalent wages. The parity system, advocated by the AFL-CIO, is a strong inducement to Harvard for good faith collective bargaining and is an exciting measure in its own right. However, in expressing its disappointment at not receiving the empty chalice of a living wage tied to a measure of need, a Crimson staff editorial downplays the call for parity as merely “sound.”

Many proponents of a living wage, including The Crimson, see it as obvious that Harvard should go beyond the committee’s recommendations and guarantee employees a reasonable standard of living by adopting a living wage. But this position is meaningless, because one cannot insist upon safeguarding living standards without defining what those standards are. How noble it is to cry gallantly for a “living wage” without ever defining what such a wage would be. It seems so easy to support something called a “living wage,” but unless one has a number based upon principled calculations (which the HCECP was unable to find), then the term “living wage” means nothing.

During the past year, high-minded words like “justice,” “morality” and “right” have been marshaled behind the living wage cause. People who have second thoughts about whether a minimum wage floor is the correct labor policy for Harvard are shunted aside as unprincipled reactionaries. I would like to propose several principles that may run contrary to a living wage by examining the actual ramifications of support for a living wage.

If one supports a living wage, one must believe that the government’s minimum wage and benefits, like the earned income tax credit, are not enough for many working families. This claim is inherently reasonable given the high cost of living in the Boston area. For those of us who believe in stronger national solutions for fighting poverty, such an argument is no great leap at all.

In supporting the living wage, one must also believe that government is not the proper forum to address these issues. Instead, one should single out Harvard as a private employer and argue that this single employer has some extra responsibility to allocate more of its resources to its employees than other private employers. The irony of the PSLM-led protests is that Harvard is a rather good employer when wages and benefits are compared to those offered on a regional or national level. Unfortunately, PSLM rhetoric continues to demonize the Harvard administration. In their imagery, every administrator picks up his hotline to Lucifer before making labor decisions. (Hello, dark lord, your command? Cut wages? Right away.) For PSLM, perhaps the closest analogs to the members of the Harvard Corporation are ringwraiths.

Continuing on the pro-living wage line of argument, one has to believe that Harvard has a responsibility to decide what wage level is necessary to guarantee a certain living standard for workers in a wide variety of family situations. Let’s say that the average Harvard service worker has 1.3 workers in his family and 2.2 children. What’s the appropriate wage? Should Harvard pay as if there were one worker or two? How does the family with seven children or the single worker with no family affect this wage calculation? Do both parents have a right to spend any given number of hours with their children?

These questions are good examples of why good faith collective bargaining is the best method of determining wages and benefits; Harvard does not have the ability or the right to answer them on its own.

Here is where the reasoning gets really tricky. To continue supporting a living wage, one has to believe that real wages should never decline regardless of economic conditions, the University’s financial condition or technological changes.

Though there are some exceptions, most supporters of the living wage seem to believe that the university’s large endowment requires it, in some moral sense, to pay higher wages. This “piggy bank theory” of the endowment ignores the reality that 85 percent of the University’s endowment is restricted. The theory ignores the fact that the payout ratio is calculated for the long-term financial health of the school and that the Harvard Corporation is not changing its philosophy anytime soon. Owing to these faults, the “piggy bank theory” ignores the fact that increasing wages will force the University to either raise more money (higher tuition) or cut services (less money devoted to the human or physical capital). There is something extraordinarily arrogant about some undergraduates demanding long-term changes that will lead to either higher tuition or fewer services for future students, because current students would largely not be around to experience the changes.

One can only admire the energy thrown into the fight and the motivations of our activist friends. But significant pitfalls lurk in their constant pursuit of the “living wage” mirage.

In documenting the demise of the English Liberal party, the historian George Dangerfield wrote that it “was the child of Progress, which is not only an illusion, but an athletic illusion, and which insists that it is better to hurl oneself backwards than to stand still.” It may be wishful thinking, but I sincerely hope that our PSLM friends think hard before raising the banner and again hurling themselves onto the barricades. Give the HCECP recommendations a chance to work before describing them as inadequate simply because they do not include a “living wage.”

Matthew Milikowsky ‘02 is a history concentrator in Mather House. He was a member of the Harvard Committee on Employment and Contracting Policies.