Why Provoke This Strike? Yale and the U. S. Economy

Abstract

est university in the United States and the largest employer located in the fourth poorest large city in the United States. Now it wants to lower what it pays its nonfaculty staff and cut back on their benefits to save money. Yet, in 1995, when the U.S. stock market rose in value by 30 percent, Yale's vast stock and bond holdings rose by between $500 million and $1 billion: this in the year just preceding the strike. In addition, Yale's holdings in land, buildings, art collections, antiques, books, and equipment rose by hundreds of millions more. Its annual budget is approaching $1 billion, and-as in previous years-its incomes exceed expenses by millions, which the university adds to its endowment and other funds.1 Yale University is floating in money as its income and wealth reach historically unprecedented levels. In order to save the money it claims to need, Yale wants to gain the contractual right to replace current unionized workers by outsourcing, hiring temporary labor, or otherwise obtaining lower-paid employees. A Yale victory will do more than damage the replaced workers, their families, and their neighborhoods; it will also lower regional pay standards (set by Yale as the area's largest employer) and thereby further depress the already deeply damaged economy of greater New Haven. A few moments of economic calculation would quickly show that the regional economy's losses would likely far outweigh Yale's gains. Another few calculations would quickly confirm that whatever Yale managed to save would make no significant contribution to Yale's wealth or income. So why then did Yale provoke the strikes? The answer lies in the broader relation of Yale to the U.S. economic