Pensions Can Be Labor’s Weapon
Workers’ pensions can help seed the ground for the next generation of union members. It’s time to go on offense.
Hamilton Nolan
Pensions are not considered the sexiest corner of the labor movement. But they are one of the most important.
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, but the total assets held by collectively bargained pension plans stand at trillions of dollars.
Until we shift the perception of pensions from “a delicate resource that we must hoard” into “a weapon,” the working class is leaving a chunk of its power on the table.
There are three concentric circles of thought about what we can — or should — do with workers’ 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’s a big waste. Studies show 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’ retirement helps Wall Street more than workers themselves.
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’s greatest tricks is its sleight-of-hand with workers’ retirement savings. By transforming union members into investors, a private 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 class.
For unions to allow themselves to be seduced into institutionalizing this practice, by claiming it’s necessary, is not just moral malpractice — it is also false. By avoiding exotic “alternative” investments — and instead sticking to simple, index-based portfolios — union pensions can turn the tables on predatory firms, which seek to use labor’s 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 theirs.
The final frontier of thought about the labor movement’s 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 pension’s 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 resources.
Organized labor’s single most pressing need is to create more union members. In 2024, union density fell to its lowest point in a century, at under 10%. If we do not organize millions more workers, we are doing nothing but running out the clock on the very existence of union power.
No, the situation is not as simple as just dipping into pensions to hire more union organizers. But an entire world of possibility opens for unions if they treat the challenges of investing pension funds as political problems to be solved, rather than unshakeable laws of nature. Do you know who wants to ensure that all that union pension money cannot be leveraged to help the broader labor movement? MAGA Republicans! Indeed, the entire Republican crusade against “ESG investing” — short for prioritizing environmental, social and governance criteria — should be understood as terror over the latent power of capital for political progress.
Let’s not forget the central insight of the labor movement: We are all in this together. We need to take care of our retirees. Their resources can also help seed the ground for the next generation of unions. Whether that means starting our own investment firms that channel our pension money into union-friendly companies, or waging war in the courts and in Congress to break free of pretextual chains under the guise of “fiduciary duty” (which purport to tell pension trustees they cannot think holistically about the impact of their own investments), the first step is to change the way we think about what working people’s pension funds are for.
The question is not, “How do we earn 7% a year on these investments to pay out retirement benefits?” That’s the easy part. The real question is, “How do working people use their accumulated material gains to make the world better for all working people?”
The class war looks a lot sunnier with trillions of dollars on your side.
Hamilton Nolan is a labor writer for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. More of his work is on Substack.
