Paul Bass Photo
Overflow crowd at Wednesday evening’s event.
Yale’s three-week-old student protest movement joined forces with the university’s labor unions, promising to push together for a more diverse campus that treats students and workers better and improves its mental health care.
Organizers with Next Yale, the organizing group behind recent student protests over the campus’s racial climate, presented that united front at a “teach-in” and rally that filled both floors of the lecture at Sheffield-Sterling-Strathcona Hall on Prospect Street, then spilled onto Cross Campus.
The stated theme of the event was to oppose Yale’s “endowment hoarding.” The argument: Yale could cover more student financial aid, hire more ethnic studies professors, bolster its mental-health services, and hire more New Haveners for living-wage jobs if it annually spent 8 percent, not 5 percent, of its $25.6 billion endowment (which was described variously during the event as a $23 billion and a $24 billion endowment).
The event featured a speech about that subject by a visiting expert from the University of San Diego. The rest of the event focused on a broader argument: However you parse it, Yale can spend more to do right.
A corollary argument advanced at the event: Hundreds of activist students can help make that happen by working alongside UNITE HERE Locals 34 and 35, which represent the university’s pink- and blue-collar workers, and the Graduate Employees & Students Organization (GESO), which seeks to unionize grad students.
Since UNITE HERE-backed alders — some of whom spoke at or attended the Wednesday event — control the Board of Alders, that effort has citywide political implications as well.
A Yale spokesman responded that Yale’s fast-growing endowment has provided more money for academic expenses. He noted that some half of the undergraduates receives financial aid, some of it covering the entire cost. PhD students study tuition-free while receiving stipends and health care, the spokesman noted; and the university has been hiring hundreds of local people this year. He said the university cannot solve the city’s unemployemnt problem on its own: the university has more than 100 applicants for every open job.
In speeches before the crowd at the Wednesday student/union event, representatives from each group sought to link their demands as part of a common agenda. They also previewed some arguments that are poised to emerge in public view in 2016, the final year of UNITE HERE’s current contracts. Conflicts about outsourcing, local hiring, and a shrinkage of unionized ranks have the potential of fraying Yale’s recent period of labor peace.
LiLi Johnson of GESO spoke of how the presence of professors of color in the American Studies departments has made a difference in her ethnic studies research. Three of those professors with whom she studies left Yale this year, she said. She said the loss points to broader problem Yale is having attracting and hiring professors of color. Hiring and retaining more professors of color was among the demands issued by Next Yale demonstrators during a march to university President Peter Salovey’s house last week, and addressed by Salovey in a response issued Tuesday. Click here to read about the march and the demands; click here to read about Salovey’s response.
Local 34 steward Lisa Stevens spoke of a recent incident in which a colleague with a history of racial insensitivity called a medical school employee the n‑word, then faced what the union considered insufficient discipline. The Next Yale demands included a call for a system for reporting racial bias incidents and having them seriously investigated, with an annual report issued on the results. “We’re disrespected, people of color, on the job,” Stevens said. “We will fight Yale tooth and nail because we belong here.”
Local 35’s Brian Wingate, who’s also a Beaver Hills alder, spoke of how custodians used to clean Yale offices five times a week. Those same offices now get cleaned once a week, he said. Meanwhile, he said, Yale has been thinning the ranks of custodians, including not replacing those who get promoted. “We are all standing to make Yale a better place,” Wingate declared.
“Yale has the money. Solve the job crisis! We want Yale to solve the job crisis,” declared Jill Marks of the labor-affiliated activist group New Haven Rising. Marks this month won election to a Board of Alders seat from Beaver Hills.
Undergraduate Jesús Gutierrez spoke of how students on financial aid, like himself, are required to work enough to make a $6,400 annual “student income contribution.” That requirement narrows the academic and extracurricular options for students from poorer backgrounds, who are disproportionately minority students, he argued. He called for eliminating that required contribution.
Four undergraduate Next Yale organizers, including Katie McCleary and Brea Baker (pictured), closed the SSS event by repeating the demands presented to Salovey last week. Already, in Salovey’s initial response, “we got some promises that have never been made to students of color before,” McCleary said. The speakers stressed that extended negotiations and pressure loom. “This campaign is by no means over,” several said.
Then a good chunk of the hundreds present poured out of the building, up Prospect Street (with the help of cops stopping traffic), and onto Cross Campus. To the blare of recorded hip-hop music, they used Sharpies to fill out post-it notes with answers to the question: “What would you do with $24 billion?” They stuck the answers — which included “I would hire more black female professors across all departments” and “eliminate student income contribution” — onto two display boards.
Long Term Vs. Short Term
The “endowment hoarding” argument was presented during the SSS session by University of San Diego Professor Victor Fleischer, who wrote this New York Times article in August accusing universities like Yale of “hoarding” their endowments at the expense of the primary academic mission of “advancing knowledge.” (The article sparked 787 comments as of 10:32 p.m. Wednesday.)
Yes, a bigger endowment ultimately produces larger returns to spend each year on academic life in the long run, Fleischer acknowledged. But primarily seeking to build the endowment rather than increasing the percentage of dollars spent on current academic life benefits fund managers more than students, he argued. He noted that the fund managers receive 2 percent fees based on the size of endowment.
Fleischer also argued that society at large subsidies endowment returns because they’re tax-exempt; a $3 billion endowment return would produce $1 billion in taxes, if it weren’t tax-exempt, he said. Therefore, he argued, the public has a right to demand more of an immediate return int he support for undergraduate and faculty academics.
He called for universities to be pressured to spend 8 percent of their endowments each year to produce a better balance between long-term needs and current needs; Yale spends 5 percent. He said that Yale spent $480 million on private equity fees last year while spending only $170 million on tuition assistance. That fact led organizers of Wednesday’s student-labor event to accuse Yale of “racist spending” that benefits hedge-fund managers over needy students.
This recent op-ed in the Yale Daily News — co-written by members of a recruiting firm for chief investment officers — blasted Fleischer’s hoarding argument as a “hoax.”
The fees paid to fund managers do not come out of the same pot of money — endowment returns — that covers student aid or all other annual university operating expenses, they wrote. And universities take decades, or centuries, to build up endowments; they called spending too much in a given year penny-wise and pound foolish because of all the long-term operating revenue lost in future returns on smaller endowments.
They also argued that those fees help Yale to outperform the market in building up the endowment, and distribute more annual revenues for operating expenses.
“In the ten years ending in 2014 Yale earned an annual 19 percent on private equity after those fees were deducted, while their domestic stocks returned only 12 percent on the same basis,” they wrote. And overall, Yale’s endowment has consistently grown far faster than most university endowments.
In his speech at SSS Wednesday, Fleischer acknowledged that under investment guru David Swensen, Yale’s endowment has produced industry-leading results. He said he worries more about smaller universities whose smaller endowments produce lower rates of return but still require the same 2 percent payouts to private equity fund managers.
Yale’s Response
Yale spokesman Tom Conroy emailed the following response to the event’s criticisms:
“Yale spends substantially from the endowment. Thanks to the generosity of alumni and other donors, and the superb management by Yale’s investment team, the endowment provides $1.2 billion a year for Yale, an amount equal to 34 percent of the budget. Endowment contributions to the operating budget have nearly doubled in the last decade, with an annualized increase in endowment spending of 6.4 percent. The endowment is the largest source of revenue for the University, far exceeding student tuition and other individual sources of funding.
“The endowment helps pay for faculty, programs, and other resources that benefit all students. And Yale College spends generously on financial aid, so it is affordable for everyone who is admitted. More than half the students in Yale College receive financial aid from Yale, and the median annual cost for students receiving aid from Yale and other sources is less than $12,000. Families with incomes under $65,000 pay nothing for their child’s Yale education.
“In the graduate school, all Ph.D. students receive generous fellowships of about $30,000 a year to cover expenses, pay no tuition, and receive free health care for themselves and their families. Only a handful of graduate schools in the country match this support.
“Yale’s endowment spending provides substantial income to the operating budget now and protects the value of the endowment over time, so that future generations of students will receive the same extraordinary support as today’s.
“As you know, Yale recently announced a $50 million initiative to diversify the faculty further and yesterday President Salovey announced a plan to
enhance the already generous financial aid for undergraduates and to substantially increase funding for the four cultural centers.
“On hiring: In the past year, the University hired nearly 250 New Haven residents for permanent administrative staff jobs. We have set up an employment group to focus on stepping up New Haven hiring for our staff positions. We are working closely with New Haven Works and are one of its
main funders.
“We have committed to hiring a minimum of 500 staff members from the New Haven community over the next 24 months and will exceed this
commitment. Yale¹s staffing needs will never be large enough to solve the unemployment problem in New Haven, but the University is certainly doing
its share. And the jobs Yale is able to offer are exceptional in terms of compensation and security, which is why so many people seek them. Yale hasbeen receiving more than 100 applicants for each open staff position.”