As endowment returns contract, workers continue to deserve a living wage

On Monday, University President Christopher Eisgruber ’83 sent his 10th annual “State of the University” letter to the University community, outlining the University’s new direction of “focus” rather than “growth.” In practical terms, this means tempering endowment spending to ensure its long-term durability.

Eisgruber’s response may seem sensible: we must make some sacrifices now so that future generations can enjoy Princeton as we have. But too often, austerity is used as an excuse to sideline workers’ concerns, disarming negotiations for better wages and benefits.

We cannot let this happen at Princeton. Regardless of the endowment’s growth rate, Princeton is capable of giving its workers a living wage of $25.85 per hour — with little negative effect for the University.

Eisgruber attributes the decline in endowment returns to “changing market fundamentals." This is partially true — many universities have seen decreases in their 20-year rolling returns. However, the urgency of Princeton’s decreases has been exacerbated by recent underperformances compared to other Ivies. For example, the Princeton University Investment Company (PRINCO) delivered a mere 3.9 percent endowment return in the year ended June 30, 2024, compared to 11.5 percent at Columbia and 9.6 percent at Harvard. In the year ended June 30, 2023, Princeton’s endowment had a 1.7 percent investment loss, while all other Ivies saw minor gains from investment. In both years, Princeton’s endowment had the lowest return in the entire Ivy League.

The University's endowment has not always struggled, but these two years were especially rough — and probably contributed to the University’s shift in focus. In the year ended June 30, 2025, the University appeared to do well, with a return of 11 percent — but this was still the second-lowest return out of the Ivy League, just above Dartmouth.

While long-term decreases are inevitable, the scale of these decreases depends on PRINCO’s performance. Luckily, the wages of workers are not correlated endowment’s performance: service workers at Princeton are represented by the Service Employees International Union (SEIU), meaning that the University is at least beholden to the terms outlined in the union contract. Barring extreme circumstances, the University must respect its contractual obligations until 2029, when the contract expires.

Ultimately, the issue is not that the wages of service workers might drop. Rather, the issue is that they are already too low — and Princeton’s endowment struggles could be used as an excuse not to raise them, either before or during union contract negotiations. I’ve defended the need for wage increases before as a response to Trump’s tariffs, but more fundamentally, a living wage is humane. In exchange for their indispensable work, Princeton’s workers deserve to be able to afford their basic needs.

Naturally, detractors will point to the slowing growth of the endowment, claiming that Princeton simply does not have the money. Here’s the problem: even a pessimistic estimate of a living wage’s impact shows a minuscule effect on Princeton’s spending as a university.

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According to the University’s contract with the SEIU, custodians are among the least-paid workers at the University, being in the lowest “grade” listed in the contract. Imagine if the lowest salary grade in the SEIU contract were instead fixed to the cost of supporting a single-adult household — the cheapest possible household configuration in MIT’s living wage calculator. Based on the MIT calculator, the hourly living wage for someone in the Princeton-Trenton area would be $25.85 — a $3.70 increase from the current starting rate for custodians.

Because we want to steel-man the argument against a living wage, let’s assume that all of Princeton’s service workers are going to receive a wage increase of $3.70 per hour, regardless of their original salaries. Assuming that someone works for all 52 weeks of the year, for 40 hours a week, this would translate to an annual income increase of $7696 before taxes, a substantial sum for a single, lower-income household. For part-time workers, assuming that they work 20 hours a week, this would be an annual income increase of $3848.

In 2024, the University employed 944 full-time workers in “Service Occupations,” as well as 65 part-time workers. If the wages of all service workers increased by $3.70, then the University would need to spend an additional $7.5 million in service wages. On the surface, this may seem like a hefty sum.

However, $7.5 million is less than 0.3 percent of Princeton’s annual operating budget. If then-president Andrew Golden and the five managing directors of PRINCO — who make around $2 million to $4 million dollars each — surrendered just over a third of their income each from FY23, they’d be able to support a living wage for the thousand or so service workers at Princeton.

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When I’ve spoken to friends about a living wage in the past, many of them have assumed that it would be a significant burden to the University — somewhere in the range of tens of millions of dollars. But even without shifting around funds in the budget, the University can easily implement a living wage. It would need to increase its total spending by only $7.5 million, translating to a tiny increase of 0.02 percent in Princeton’s endowment spend rate.

$7.5 million is practically peanuts for the University compared to its total budget, and it has almost nothing to lose. We need to implement a living wage at Princeton, now. It is a common-sense, low-cost policy that we should all get behind.

Raf Basas ’28 (he/him/his) is an assistant Opinion editor from Elk Grove, Calif. You can reach him at raf.basas[at]princeton.edu or @raf.basas on Instagram.