An Interview with Lawrence Katz,
Professor of Economics at Harvard University

While the other people interviewed here generally support living wage campaigns, Lawrence Katz opposed the living wage policy. However, as an economics professor at Harvard, Dr. Katz chaired the committee formed to investigate employment policies at Harvard, and shares his experiences working with the living wage campaign at Harvard. (The report of that committee is available here: The HCECP (Katz) Report.)

Why did the students launch the Living Wage campaign at Harvard? What were the goals of the campaign, and what do you think of them?

It’s very difficult to define what is a fair or living wage. One of the things you see when you go through it is that every group has a different definition of what it is. I think, in some sense, in situations that we saw at Harvard where wages are sort of determined by collective bargaining inside Harvard, clearly there is no one market wage. There is outside, opportunity market wages, and there’s then some range of indeterminacy.

One can view the Living Wage as an attempt to raise the bargaining power of the unions, but I think there are important differences. We as a society decided that workers have the right to collectively bargain, and there are certain rules of the game in which they have that ability to bargain with an employer. If they are able to get a wage above the outside market level, we consider that legitimate.

The issue here is some of that the United States has introduced, since the passage of the National Labor Relations Acts in 1935, many strategies of keeping out unions, and of getting around unions contracts through the use of out-sourcing. In the case of Harvard, the situation here was unionized house workers, who had traditionally earned wages through bargaining, above or below the common denominator outside.

Harvard was following modern management strategies of being able to use out-sourcing to find, in the case of security guards, non-union workers and, in the case of janitors, essentially a very weak union that had a leadership that is actually in jail now to lower the wages. I think putting pressure on parties to follow the rules of collective bargaining as probably the intent of the law of 1935 was, although not the actual implementation, a very reasonable approach.

I am much more uncomfortable with some of the Living Wage rhetoric that everybody ought to be paid a wage that is required to live in their community. That sounds extremely reasonable from the point of view of a government intervening-- and that’s exactly what the Earned Income Tax Credit (EITC) does, which I think has been the major social policy advance in the U.S. in the last twenty years. It basically says different family structures need different incomes, so we let the labor market pay out and get a reasonable market wage (with a minimum wage holding at the bottom) and then we add additional income to families with greater needs.

You’ve suggested that a blanket Living Wage policy for the Cambridge community should not be the goal of the Living Wage campaign. What should be the goal, in your view, of Living Wage campaigns?

I would focus much more on strengthening collective bargaining, improving the minimum wage at the federal and state level, and expanding the EITC at federal and state level. I think Living Wage campaigns are very good at forcing particular employers to strengthen collective bargaining. They are symbols that unions can take on to say, “If you don’t treat us respectfully and well in collective bargaining, here’s a film of what happened at Harvard. Look what we’re going to do to you in terms of bad publicity.”

But I worry about it at as a stance. We don’t want to chop up the economy and let a few salient, big employers pay higher wages because they are visible and you can have a campaign against them, but everyone else gets left behind because we spend all our energy on Living Wage campaigns. If progressive individuals spend all their energy on that and the national minimum wage erodes and the national EITC erodes, that’s not going to do much good for workers on average. Workers who get a job at Harvard or for a local government will do fine, but the vast majority of workers are not going to be employed there. If those wages grow too far from the rest of the market, you also have the problem that they will change the mix of workers. You’ll think you’re helping disadvantaged minority individuals, but if Harvard pays a wage extremely above the outside market, they’re going to pick and choose and the standard discriminatory preferences.

The extent you view this as a symbol that can transfer to other union settings, it’s good. The extent you that you believe literally “we’re just going to hit up big vulnerable employers who are going to cave to publicity,” it is a worrisome trend. It uses up a lot of energy that would be better used on focusing on issues like the minimum wage and the EITC. Shifts in the EITC affect around twenty million households; hitting up on Harvard and a few other big employers affects a few thousand workers.

In order to end the student sit-in, the university agreed to freeze out-sourcing and form a committee to investigate wages and employment on campus. Many students have told me that committees are simply a way for universities to side-track students. What, if anything did the committee contribute towards the goals of the students?

The stated goal of the activists was for the university to adopt a Living Wage policy. The university certainly didn’t choose to do that. I think the student activist were rightfully concerned with another committee, because there had already been a previous committee, but I think the negotiated settlement between the administration and the students set up a committee that was much broader than the previous one. It also had a number of commitments of the university to re-open collective bargaining agreements.

In the process, the committee learned a lot of facts. I think the student activism was quite good at pointing out issues that were not getting attention, and I think the students on the committee learned a lot and were quite constructive. The students were very good at being intermediaries for the concerns of the workers.

I think the settlement is well above what the students were actually demanding in their initial sit-in. They were asking for a $10.25 Cambridge Living Wage level, and the university just settled for $11.35 to $13 (estimate), and that’s going to go up to $15.00. In fact, the big problem wasn’t going to be solved by a Living Wage per se-- those wages are actually pretty low. The parity wage policy we came up with really got at the core of the problem: out-sourcing and using out-sourcing to drive down wages. In contrast, functioning collective bargaining is seen in the latest agreement.

What do you think about the tactics used by the Living Wage campaign at Harvard? Were the tactics effective from your point of view?

I think the students were quite good at using civil disobedience to get attention, and quite good at setting forth a set of issues that a more deliberative process dealt with.

I think some of them have gotten a little out of hand. It’s a good rallying cry to demonize the opposition, but it doesn’t lead to necessarily the best substantive policy choices. They had good ideals and good instincts about what was wrong, but it’s quite understandable that it was often hard to turn that into practical suggestions. That is not a big criticism.

I think the biggest problem is if you’ve had a successful campaign, how do you transition to being a constructive party for an ongoing relation? How do you move on to another issue, rather than just move the goal posts?

I think, in fact, the students who were most successful in having influence in the committee, as in all these processes, are not the ones who shout slogans the loudest, but were actually the ones who could engage in what the data were. There were a lot of different students: some of them were quite serious and quite thoughtful on those issues, and some spent too much time demonizing the opposition. I thought those students had much less influence, because whatever you think of the Harvard administration, you can only say these people are evil so many times. If they make a concession, taking nothing on trust is going too far-- so that part lost credibility. Students need to keep their sights on the moral issues, but also be willing to talk about the practical analysis.

It’s difficult to sift through the economic data about minimum wages and living wages, especially when so much research is funded by commercial enterprises interested in keeping wages low. [For more information, see: A Warning: PR "Non-profits".] How can interested students or activists separate the good research from the bad?

There’s a bunch of junk out there. I think one of the really important aspects, for example, of the committee was that there was an attempt to seriously look at the evidence and not just have slogans or pull up a think tank. In fact, even many of the student Living Wage activists saw that some of the stuff coming out of the supposed leading characters of the Living Wage movement didn’t have a lot of substance behind it. Someone like Alan Krueger, who does very rigorous work, had a lot more influence on the process. He’s done very serious work on these process, versus people from advocacy groups, who you just went into the logic of what they were doing and a lot of it didn’t hold up.

If you want to be a serious activist who is taken seriously and thinks objectively, I think there is a case for seriously learning some statistics. To be an active citizen, there are some fundamental things one has to know about statistical inference, about data, understanding how the data’s put together, and a little bit of economic and other social science theory. I think having more training, better knowledge, and not being afraid of numbers and getting dirty with the data is quite important-- otherwise you will be driven by popular press interpretations. I think this is true whether you are an activist or a journalist: you can say all economists are evil and that statistics can lie, you’re never going to be able to do a good job unless you can actually understand and think about the data.

Do you have any other advice for the students working on Living Wage campaigns elsewhere?

Advice number one is do your homework. The more knowledgeable one is about the actual facts of what happened the better. How do wages at this institution compare to other places? What are the trends in the labor market? What’s the history? In the initial stages, you can do a bit of sort of chanting. There are different roles. But I think it's important to do one’s homework, be engaged in the hard work of coming up with a constructive solution, and, importantly, to know when to declare victory.

If you make progress, there’s a part where you need to move on to other issues, or you need to set up some institutional way of dealing with more collaborative activity. And it may not be that the same people are good at all these things: it is not clear that the best rabble-rousers are going to be the best at implementing plans, and that’s important. Once one has a victory at one place, think about how to channel it to others. Fighting the last war continuously is probably not the right strategy.

Wow, great interview. How can I read them all?

All the interviews from this project have been collected into a report on campus labor rights campaigns. It is available below for easy reading, printing, and sharing.

The Campus Living Wage Project:
Interviews with Student Activists, Organizers, and Researchers