Pensions are not considered the sexiest corner of the labor movement. But they are one of the most\u00a0important.<\/p>\n
Pensions are where all the money that workers fought so hard to earn is going. Union researcher Chris Bohner has calculated the combined financial assets of American unions at about $35 billion<\/a>, but the total assets held by collectively bargained pension plans stand at trillions<\/a> of\u00a0dollars.<\/p>\n Until we shift the perception of pensions from \u200b\u201ca delicate resource that we must hoard\u201d into \u200b\u201ca weapon,\u201d the working class is leaving a\u00a0chunk of its power on the\u00a0table.<\/p>\n There are three concentric circles of thought about what we can\u2009\u2014\u2009or should\u2009\u2014\u2009do with workers\u2019 pensions. The first is the mandate to grow the funds enough to support retirees. Pensions spend gobs of money on sophisticated advisors and hedge funds and private equity to hit annual returns; in aggregate, it\u2019s a\u00a0big waste. Studies show<\/a> that, in the long run, pensions could put their money into simple, low-cost portfolios and make about the same returns. The majority of the brainpower dedicated to workers\u2019 retirement helps Wall Street more than workers\u00a0themselves.<\/p>\n The second way to look at pensions is: How do we ensure working-class money is not invested in companies that oppress the working class? One of capitalism\u2019s greatest tricks is its sleight-of-hand with workers\u2019 retirement savings. By transforming union members into investors, a\u00a0private equity firm can say that layoffs and wage cuts actually benefit workers, through pension investments. This act of playing retirement fears off between groups of workers is poisonous to solidarity and the collective interest of the working\u00a0class.<\/p>\n For unions to allow themselves to be seduced into institutionalizing this practice, by claiming it\u2019s necessary, is not just moral malpractice\u2009\u2014\u2009it is also false. By avoiding exotic \u200b\u201calternative\u201d investments\u2009\u2014\u2009and instead sticking to simple, index-based portfolios\u2009\u2014\u2009union pensions can turn the tables on predatory firms, which seek to use labor\u2019s capital to undermine labor power. These firms need our money to operate. We can make demands of them. Private equity firms and others that treat workers badly should simply be cut off from pension funds. The loss is\u00a0theirs.<\/p>\n The final frontier of thought about the labor movement\u2019s pension money is the realization that it can be used for more than just dreary investments and retirement checks. Unions must think creatively about the staggering pool of capital they command. If a\u00a0pension\u2019s financial returns are high enough, many unions think its job is done. In fact, such large pools of capital have much more potential. When negotiating all sorts of priorities, that capital represents leverage. When facing hostile forces, it represents power. And when organizing the unions of the future, it represents\u00a0resources.<\/p>\n