Unions are losing members and clout at the bargaining table, but that doesn't mean they aren't still powerful players on the political scene. Now, Big Labor is trying to stop Social Security reform, even if it hurts union members. Unions are supposed to represent their members' interests by negotiating higher pay and better benefits, including pensions. In fact, union pension funds are the single biggest source of investment in the stock market, amounting to an estimated $6 trillion in 2003. Now, the AFL-CIO and individual unions are threatening some investment firms and corporations with pulling out their pension fund investments unless the companies withdraw their support for President Bush's plans to overhaul the ailing Social Security program
In the old days, unions just used the pension funds to back mob casinos. At least the casinos made a profit.
The problem with many of these actions, however, is that they actually hurt the union pension beneficiaries, who get lower returns on their investments because the union is pushing policies that lower profits and stock price. Pension fund managers have a moral -- and legal -- duty to invest retirees' money wisely. Their fiduciary responsibility is to act prudently on behalf of those whose funds they manage. They are supposed to invest funds to ensure a good return, not to promote the political or organizational goals of the unions. When a union pension fund coerces a company to adopt policies that make it less profitable, union retirees lose money. The only thing fiduciaries are supposed to consider is the return to the pension fund on the investment made -- certainly not the unions' desire to sink a key element of the president's domestic agenda.
The unions have been abusing member dues for years. When I was a union member, I used to get a newsletter that often featured stories about the union's efforts to convince Wal Mart employees to form their own union. I could never understand why I was paying to unionize Wal Mart. Not to mention the money spent supporting political candidates I didn't support.
This thing with the pension funds is much worse. These power-mad thugs are playing games with their members' futures. When Wall Street firms do that, self-styled corruption-busters like Eliot Spitzer go after them hammer and tong. Why don't they care about this? Oh yeah, that's right. Eliot Spitzer is a Democrat, and labor unions always give money to Democrats.