Moody's: Grad student unionization will negatively impact credit
- Moody's says a recent decision from the U.S. National Labor Relations Board to authorize graduate students to unionize as employees will impact the credit rating for many elite private institutions.
- The investors service says that graduate assistants account for 10% of the total faculty workforce, and with increased benefits, would cost the nation's top research institution an additional $7-11 million annually, out of their operating revenues which exceed $29 billion.
- The increases in costs, combined with losses in endowment investment, limits on tuition increases and increasing costs for research.
For the nation's best high research colleges and universities, there will be no credit rating that would adversely impact their ability to issue bonds or to secure private investing. Their institutional brands and outcomes are too strong to be undone by less than 1% of their total revenue stream.
But, for smaller institutions with moderate research activity, the new collective bargaining power may very well create a culture where some research must be scaled back in order to account for increases in benefit and salary pay for graduate assistants. Colleges should begin assessing their research priorities and funding resources in preparation for grad assistants making their case for increased compensation, and for the increased burden it will place on human resources to adjust to the new demand.
- Moody's Investors Service Private university graduate students' ability to unionize is credit negative