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A New Look At Labor Day
By Robert F. Abbott, Fri Dec 9th
A New Look at Labor Day Robert F. Abbott A day to reflect on the accomplishments of working people:That's been the proud tradition since the first, unofficial,Labor Day back in 1882. But, one of labor's greatest accomplishments has gone largelyunrecognized. Since the end of World War II, working people havebought up a huge chunk of big business. They now own a piece ofjust about everything in business, from multinationalcorporations to small companies that build mini-malls in theirneighborhoods. It may be the greatest economic transformation since theIndustrial Revolution; management guru Peter Drucker calls it"The Pension Fund Revolution." To get a sense of the transformation, consider this: At the endof 2001, America's 242 billionaires had assets totalling about$800 billion. That's a sizable amount, certainly, but workingpeople had assets of $11.8 trillion in pension and mutual funds.That's almost 15 times as much as the billionaires. Most working people contribute only modest amounts to theirretirement plans, but there are simply so many of us that ourcollective nest egg grew very quickly. If you're still not sure,try this on your calculator: Multiply a contribution of $1,000per year by one million working people. Answer: $1 billiondollars per year. Now note there are hundreds of millions ofworking people here and in other countries. And we'recontributing new money every year. Even a relatively small number of working people can build a bigfund. For example, the New York State Common retirement Fund,with 944,000 members in or retired from state public services,had assets of $112 billion at the end of March last year.According to the Fund's annual report for 2002, about $76.6billion of that total was invested in companies. The remainder,about $35 billion, was in bonds, mortgages, and other types ofloans. Look at the private
sector and unions, too. To cite just acouple of examples, Pensions & Investments magazine estimatedthat General Motor's pension fund had assets of $82.5 billionand the pension fund of the Western Conference Teamsters hadassets of $22.6 billion, at September 30, 2001.This ownership of big business by working people is the resultof contributions to pension funds, mutual funds, and lifeinsurance policies with a savings component. What does all this mean? Well, for starters, perhaps an end ofcomplaints about the profits of corporations. After all, most ofthose profits go toward the retirement incomes of workingpeople. More complicated, though, is the relationship between workingpeople who own a big company and other working people employedby it. How to share corporate profits -- through continuingemployment and higher wages, or through higher returns toshareholders -- remains a difficult issue. Especially for thoseworking people who lose their jobs. On the other side of the coin, working people have bought enoughstocks and shares to become the bosses of the bosses. Somepension funds have begun making that clear; CalPERS, theCalifornia Public Employees' retirement System, has led the wayin telling Chief Executive Officers (CEOs) and boards ofdirectors that they'd better manage effectively. And, CEOs anddirectors listen; after all CalPERS runs the country's biggestpension fund, with assets of more than $130 billion.
One other thing: if you're a working person, you're a consumer,as well as
an owner and employee. When you go shopping, there'sa chance you'll buy from
a business owned by yourself, yourfriends, or your neighbors. What's more,
the clerks who takeyour credit card with smiles may work for you. Or, maybe
theclerks own the company for which you work. Smile at them, too,just to be
on the safe side! |
