Jaeger said that HUCTW’s 2010 negotiations immediately following the recession were fairly straightforward. “At that point I think everybody was struggling in the most basic ways of how are we going to cope with the huge loss of value in the endowment,” he said.

Last year’s negotiations, however, “turned out to be much harder,” Jaeger said. He attributed the difficulty in part to what he called “a mixed economic picture.”

This uncertainty lay at the heart of the negotiations as the administration and unions disputed the extent to which Harvard is still recovering from the recession.

Jaeger recalled one of the more difficult meetings of the year, in which he said the phrases “terrified” and “scared to death” were used in descriptions of the University’s economic future.

“We just thought that was hyperbolic,” Jaeger said. “Yes it’s a more complex time and more volatile than six or seven years ago but the University is making bold confident plans with regard to a number of key challenging areas and the University can make a confident plan with regard to the employee part of the model also.”

According to John T. Trumpbour, research director at the Harvard Law School’s Labor and Worklife Program, although Harvard lost money during the recession, the University has since recovered.

On the other hand, S. Paul Reville, former Massachusetts Secretary of Education and a professor at the Graduate School of Education, said that Harvard is not alone among universities in striving to keep costs down in the current economic climate.

“Higher education continues to struggle against rising costs and an inflation for the cost of education that tends to exceed the cost of living generally,” he said. “The institutions are number one, coping with the recession still and, number two, trying to control costs and not trying to pass along burden to students.”

Murphy said that not only has the endowment suffered under a volatile market, but other revenue sources have shrunk as well, including tuition, for-profit executive education program revenues, and government funding.

“It felt like we were unconstrained financially [before the recession] and then the bottom fell out around the world,” Hausammann said. “That has made us alert to the fact that we have to make choices, make investments, and make trade offs.”

Yet despite the more complicated financial picture, Murphy maintained that Harvard is a “very progressive employer.” According to Murphy, the typical wage increase in the area in the current economic environment is 2.5 percent, and the University has consistently negotiated raises of between 2.5 to three percent.

HUCTW’s recently negotiated contract includes a first year 3.4 percent retroactive wage increase for the typical HUCTW employee with at least one year of service.

MAXIMIZING THE MISSION

But even with Harvard’s above-market compensation, some argue that Harvard’s status as a tax-exempt non-profit requires that it be held to a higher labor standard.

“When an institution does get a tax break...they do have a little bit more of a community obligation than a corporation,” Trumpbour said. “The danger is when a university becomes dismissive of its community obligations.”