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March 26, 2004

A Good Use of Pension Funds

In past years, workers pension funds, especially the ones controlled by employers have been raided to fuel corporate takeovers or worse used as a slush fund to support union busting by those corporations.

Now, a bunch of pension funds are lining up to use those funds to attack managements that waste companies resources on destructive union-busting campaigns.

And Safeway is the first target of a new consortium of progressive pension managers, after Safeway's ideological intransience undermined union wages but also undermined profits at the grocery chain:

Stocks of the three supermarket companies in the recent California grocery strike and lockout fell sharply Wednesday, the day after two of them, Kroger Co. and Albertsons Inc., warned that their post-strike costs would contribute to lower profits this year.
The new pension reform group is described in this article as dedicated to improving corporate governance. It includes CALPERS, the giant California public pension system, along with pension funds from a number of other states.

Some are criticizing this pension fund activism for targetting stupid management actions that hurt workers:

some pension specialists, pointing out that pension funds are created for the benefit of the workers and retirees they cover, raise a question: Whatever the motives of the fund officials, is the campaign a proper use of the funds' money and power?
There is little doubt that the heavily unionized members of these pension funds don't want their pension money supporting anti-union actions, so what better use of their money than supporting corporate governance that improves workers lives rather than undermining it?

Watch the rhetoric around pension funds. Conservatives who talk about "shareholder democracy" and other crap will suddenly get apoplectic if that means that those pension funds don't get voted to support their favored anti-worker approaches to running a business.

As Enron, WorldCom and a host of other recent scandals show, letting corporate sharks loose on the world is no guarantee of long-term profits, so the public pension funds have not only morality but good economic sense on their side in cutting back the power of corporate bigwigs to launch covert assaults on workers or consumers.

If critics of the pension fund activism want to argue that promoting worker welfare inherently is at odds with protecting shareholder interests-- well, us socialist types might have sympathy for their views, but that seems like a far more leftwing critique of capitalism then they really want to make, don't you think?

Posted by Nathan at March 26, 2004 07:01 AM