Yale won’t be traveling to Italy this time to lure stone-cutters to New Haven. But Rick Levin does see the university playing a central role again in helping the city survive the hardest economic times since the Great Depression.
As New Haven’s last major corporate citizen, $17 billion-endowed Yale University will determine to a large extent how many families will continue to earn wages to pay the bills in the recession that’s underway and expected to last a year.
And as Yale’s president, Rick Levin will be the point man.
He’s mindful of the history. He wants to repeat it, in some form.
“Oh absolutely,” Levin said in an interview at his Woodbridge Hall office when asked if Yale will help New Haven weather the recession better than some similar communities.
“This is pretty scary,” Levin, an economist, said of the brewing global economic downturn. He spoke between sips from a can of the trademark Diet Cokes he has had by his side in interviews since he took office 15 years ago. “It looks deeper in many ways, more central financial institutions, than any time since the Great Depression.”
Yet he hardly looked or sounded like a scared man. Even though one day earlier he’d announced that Yale’s endowment lost $6 billion since July and that the university will undergo belt-tightening aimed at cutting operating expenses by 5 percent.
Click on the play arrow above to watch highlights of the Levin interview.
Levin’s equanimity stemmed from a sense that the recession will likely mean some cost-conscious decision-making, some delays in growth, but no major pain at New Haven’s largest employer.
As Levin noted in an open letter to the Yale community last Tuesday, “$17 billion is still a very large endowment.”
Specifically, Yale will slow down the construction tear that has compensated for some of the region’s job losses. A new School of Management campus and biology building are on hold. But lots of other projects, from new residential colleges and a political science building to two new power plants, are steaming ahead. Until this week, Yale planned to increase the amount of money it spent on construction in coming years. Now it plans to hold steady — at some $500 million a year, Levin said.
“It’s a slowdown on a very big construction program,” he said. “It’ll still be a major source of employment.”
It was construction, funded form huge philanthropic gifts, that kept Yale so busy building new residential colleges, its law school, and other heavily ornamented edifices in the 1930s. So busy it couldn’t find enough skilled stone-cutters.
“Construction employment was huge,” said Levin, reflecting on the historical parallels. “And it was largely ethnic workers. They [Yale] did a lot of recruitment for skilled craftsmen in Italy, bringing families of people who were already in New Haven.”
Similarly, Levin said it’s possible Yale won’t end up laying anybody off in regular, non-construction jobs.
About 12,000 people work at Yale outside of construction jobs. That’s by far the largest workforce in town.
Levin did announce a goal of eliminating 5 percent of the university’s 8,000 – 9,000 full-time non-faculty positions as part of the belt-tightening program. But he hopes to accomplish that through attrition if possible.
Meanwhile, President-Elect Obama has announced an FDR-style economic stimulus program to create jobs in response to the recession. Part of his plan is to boost development of “green” energy sources and medical research. Yale does a lot of that. Levin said he’s optimistic that Yale will obtain plenty of grant money under the stimulus program — and create enough new positions to replace those lost.
“It’s possible our total [$2.7 billion] budget won’t be down at all” as a result, Levin said.
Nor does Levin envision a slowdown in Yale’s program of helping employees buy houses in lower-income New Haven neighborhoods. Sixty to 70 people purchase homes each year under the program, he said. Around 900 have done so since the program’s inception.
Levin sounded bullish even on Yale’s notoriously dysfunctional labor relations.
Yale has enjoyed six years of labor peace since its last strike (the equivalent of 50 – 100 years in the life spans of most institutions), in part because management and unions decided to strike an eight-year deal to improve day-to-day relations and build trust. The two sides have enjoyed continuity at the top: Laura Smith and Bob Proto have remained at the helms of Yale’s pink-collar and blue-collar unions as Levin has remained in the president’s chair.
Union-management efforts on best practices have worked, Levin said. “The relationship has never been better. We have had excellent conversations,” he said. “We have way fewer blowouts.”
He offered an example: Recently the two sides were able to agree on terms for work on Yale’s new West Campus (the old Bayer site in West Haven). Local 35 got the jobs in return for some work rule changes management had sought. The deal was struck out of the public spotlight.
Levin expressed more concern, and sympathy, for the challenges Mayor John DeStefano faces — the continuing layoffs and demands for union concessions — amid declining state revenues.
“We’re going to help him as much as we can” by, in part, trying to bring more state money to New Haven, Levin said.
But he acknowledged that Yale and New Haven haven’t developed the relationship with Gov. M. Jodi Rell that they had with her predecessor, John Rowland. Levin hosted annual “summit” breakfasts with city leaders and the governor and his staff to present a consensus of major building projects New Haven supports. Partly as a result, money flowed to the city for, among other efforts: a new Gateway community college campus, a new Long Wharf Theatre building, and housing at the corner of Church and Chapel streets. Those summits ended when Rowland went to jail.
"As New Haven's last major corporate citizen, $17 billion-endowed Yale University will determine to a large extent how many families will continue to earn wages to pay the bills in the recession that's underway and expected to last a year."
Not true. Yale represents only a fraction of the 250,000 jobs within the New Haven Labor Market Area.