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University Grapples With New Wage Mandates

For larger schools, the impact is not as straightforward. Harvard Business School, for example, has 123 outsourced dining workers. But the Business School also has more financial resources to draw upon if it needs to.

“We don’t expect [implementing the HCECP report] will have an effect we won’t be able to absorb,” says Business School Chief Financial Officer Donella M. Rapier.

The Kennedy School of Government, already facing a $3 million shortfall for the current fiscal year, lacks the Business School’s leeway.

The Kennedy School, which was cited specifically in the HCECP report for employing a large number of low-paid outsourced dining services workers, is waiting to hear back from Sodhexo, its major outside contractor, on what implementing a parity wage plan would cost.

But without knowing what in-house employees are going to be paid, it is impossible to get exact information from outside contractors.

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“Until you know what parity wages are going to be, you’re not going to have precise numbers,” Newman says.

Paying the Piper

Like the costs of increased wages, the actual impacts on each school’s programs and tuition remain uncertain.

At the Law School and the Kennedy School, tuition will increase at a higher rate than usual next year—a result of the ongoing recession and other increased costs, as well as the costs of implementing the HCECP report. Tuition hikes at the Business and Medical School, however, will be in line with those of previous years.

Dental School Associate Dean for Administration and Finance Mary Cassesso says she worried that higher outsourcing costs would necessitate cost cutting.

“There’s been a suggestion that the assessment we pay [for outsourced labor] will increase sharply over the next few years,” she says. “That is a huge concern to us.”

And that the wage decision comes in the midst of a recession, as Upson puts it, “doesn’t help.”

One of the most significant impacts will likely come from Harvard’s various food services.

Whereas the College’s dining service workers are largely paid wages above the HCECP level, the Law, Business and Kennedy Schools were cited in the report for outsourcing large numbers of dining workers, and all three will have to make changes to keep food services afloat.

“We hardly keep it going [as it is],” Newman says of the Kennedy School’s cafeteria.

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