Harvard’s endowment, however, like those of many other academic institutions, has been hit hard by the financial crisis, and it must make significant cuts in order to maintain the quality of its academics. The city council’s request that the university keep unnecessary employees while cutting back on the salaries of faculty, whose presence is more central to the educational mission of the university, is unreasonable. Harvard is first and foremost an educational institution; while providing jobs for people in the community is a worthy goal, its primary mission is education and research.
According to the most recent figures, Harvard’s endowment fell by 22 percent this year, which is forcing it to make large cuts in its budget. In recent months, the university has instituted numerous measures to tighten its budget, including a hiring freeze and a slowdown of its construction projects in Allston. It is clear from cuts such as these that Harvard needs to decrease costs across the board. As an educational institution, Harvard’s first priority is to maintain its academic standards through the recession as much as possible. This means that some workers who are not critical at the moment will need to be laid off.
The layoffs are likely to have detrimental effects: given the current economic state, it will be much more difficult for laid-off workers to find new jobs, and those who will be unemployed as a result of the layoffs may further burden the city’s homeless shelters and food-assistance programs. Since Harvard has a stake in the community, it should be mindful of these effects when it decides on what budget cuts to make. But Harvard is still one of the largest employers in the state, and, even in spite of necessary layoffs, it will continue to provide economic benefits for Cambridge.
If the city council decides to give Harvard a “mini-stimulus package” in order to reinstate some of the workers who have already been laid off, as some have suggested, this might induce Harvard to scale back some of its layoffs. Harvard is under no obligation to keep employees it does not need, however, and it should accept such a package only if it will not work against the budget cuts Harvard is trying to make.
The city council has also suggested that Harvard make cuts in the wages of higher-paid academic staff and professors instead of laying off lower wage workers. This would not only hurt the university’s academic programs, but in many cases also would not even be possible. Many professorships are endowed, so the university cannot simply take away part of a professor’s salary and use the money to maintain another employee. The City Council’s apparent refusal to recognize this point suggests a larger misunderstanding of the way universities allocate their funds, since endowments and grants often cannot be moved from one place to another.
The city council’s request is unrealistic and, since the council is offering few suggestions that can actually be implemented, seems to be based purely on political concerns. The council needs to recognize that Harvard’s mission lies in education and research, not in job generation, and to stop wasting its time with meaningless theatrics.