Harvard University may be the gold standard of Ivy League institutions, but its own students have accused it of using unethical and predatory practices to bolster its massive $53.2 billion endowment while threatening to slash jobs and deny workers a living wage.
Harvard Management Company, which oversees the endowment, returned 33.6% on its investments for the fiscal year ending in June 2021. That’s an $11.3 billion increase from the previous year, which catapulted the endowment, already the largest in the world, to its largest sum in history.
Harvard’s subsequent victory lap over the money made during a pandemic and on the backs of consistently underpaid employees isn’t sitting well with students like Sophie Goldman.
“This ostentatious praise for the endowment’s growth (which was already larger than half the world’s economies) is not only in poor taste, but also morally wrong,” she wrote in the Harvard Crimson. “Despite this monumental financial gain of over $11 billion in the past year, the University continues to lower its budget allocated for essential workers, citing ‘continued financial pressure’ due to the pandemic.”
Before the fall 2021 semester began, Harvard proposed new dining schedules that threatened to cut the number of full-time dining employees by 20% and force an 8% reduction in total hours available.
Fearing the worst, UNITE HERE Local 26, the union representing dining employees, solicited support from students through flyers plastered all over campus.
The flyers accuse Harvard of “using austerity politics to marginalize essential workers” after collecting a hefty sum in tuition during the pandemic and growing its endowment.
“At the same time, Harvard is pushing food service workers to the sidelines by slashing full-time jobs and cutting hours – even though more students are on campus than ever,” the flyer claimed.
While the school tried to save face, it was thrust back into the spotlight last week when members of the Harvard Graduate Students Union-United Automobile Workers went on strike after negotiations stalled with the school over a modest pay increase (less than half the rate of inflation), amendments to the Title IX process, and the reorganization of a union shop clause that would require undergrads to pay dues as a condition of employment.
The strike, which started on Wednesday and ended Friday, coincided with the annual freshman parents’ weekend activities.
Harvard University students”I don’t see logic anymore between [Harvard] not only having all this money and resources but being very proud and flaunting it and at the same time saying it wouldn’t be financially prudent to pay anyone a living wage,” union President Brandon Mancilla said.
Harvard President Lawrence S. Bacow has argued in the past that the university has “a legal and moral responsibility to maintain the purchasing power of the endowment so that it sustains future generations,” but critics claim 33.6% gains is much more than the “maintenance” Bacow has cited as a reason to cut costs.
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Harvard’s endowment dates back to 1638, when John Harvard gifted 400 books and half his estate, making him the university’s namesake. Others say the endowment’s true roots can be traced to 1649, when four alumni donated real estate to the university which is now the location of the Widener Library.
From the 1640s to the mid-20th century, the endowment was managed conservatively, and funds were split between bonds, cash, and blue-chip common stocks.
When the Harvard Management Company was founded in 1974, the endowment was valued at $1.1 billion. Managers began shifting assets from their domestic portfolio to a global one, established a trade desk to invest in bonds, and made the move from public securities to private ones.
The money poured in for years, but when the coronavirus pandemic hit, Harvard “invoked austerity measures” that it claimed were fiscally responsible.
And while large chunks of the endowment remain inaccessible, others say the university, which finished the fiscal year with a budget surplus of more than $238 million, has more than enough cash on hand to support workers whose reported wages and benefits decreased by $101 million.
To add fuel to the fire, in fiscal year 2020, the top six officials at HMC made more than $31 million combined.
“Flaunting these exorbitant gains while simultaneously using austerity politics to limit worker compensation isn’t impressive, it’s embarrassing,” Goldman said.
Goldman also takes issue with the “unethical sources” of Harvard’s financial gains.
The endowment includes exchange-traded funds that in the past have profited off private prisons, fossil fuels, and as recently as 2018, a $2 billion investment in a hedge fund that held bonds making money from Puerto Rican debt. In Brazil’s Cerrado region, Harvard owns more than $450 million of farmland found by the Brazilian government and believed to be illegally taken from indigenous communities, Goldman said.
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“Harvard’s use of these illegitimately sequestered lands further contributes to the disenfranchisement of these peoples, as the HMC appears to harass local communities, contribute to deforestation, and heavily use pesticides and other chemicals which pollute local drinking water and have possibly lead to increased numbers of cancer patients,” she added.
The Washington Examiner has reached out multiple times to Harvard University and Harvard Management Company for comment.
Neither has responded.
