A Strategy to Stop the Flow of Our Money to Billionaires
The trillions of dollars in our retirement savings are enriching the ultra wealthy while they ravage our communities. A mass movement led by workers and pensioners can turn off the tap.
Sare Myklebust and Saqib Bhatti
In the United States, we are living through a time of crisis. We’re witnessing a U.S.-backed genocide as Palestinian children are being starved. Our government is disappearing immigrants and U.S. citizens alike because of the color of their skin and their willingness to speak truth to power. Millions lack basic healthcare, companies are kicking families out of their homes and most of us are paid barely enough to survive.
We’re living on the edge, terrified and traumatized.
Meanwhile, the perpetrators of this unbearable status quo — billionaires, their companies and the government structures they now control — are using our money to fund these injustices while building their fortunes.
Pension funds — totaling $6.1 trillion in state and local defined-benefit funds alone, as of March — are among the largest pots of our money that private equity firms and other financial players use to make themselves richer while ravaging our communities. These funds are workers’ hard-earned cash — their deferred compensation that is supposed to ensure they can retire with dignity. Instead, pension funds are being harnessed by the ultrawealthy to line their pockets while making our lives worse.
These financial players and institutions rely on financial jargon and evolving corporate structures — such as hedge funds, private equity and venture capital — to rig our economic system and squeeze out more profits. They execute their extractive investment strategies using large pots of money they acquire access to, including pension funds and endowments. Now, these same forces are setting their sights on our 401(k)s and will continue attempting to gain control of all workers’ capital to swell their fortunes. In August, President Donald Trump issued an executive order opening the door for “alternative assets,” like private equity and cryptocurrency, to be offered as part of 401(k)s. Private equity titans like Blackstone CEO Stephen Schwarzman have long dreamed of accessing these types of accounts, collectively valued at over $12 trillion.
What does it look like when our retirement money is controlled by ultrawealthy financial players like Apollo Global Management, TPG and Valor Equity Partners? In 2024, the Los Angeles Times reported that public pensions in California had been invested in funds, managed by private equity behemoth Blackstone, that were responsible for gouging rents in San Diego. Some of the very same public workers whose pensions were invested in private equity funds were being overburdened by those funds’ rent-gouging. While firms such as Blackstone report short-term profits from tactics like aggressively raising rents in buildings they own, they are simultaneously harming workers and their ability to find stable housing. Meanwhile, these companies charge pension funds a variety of fees for managing their money, raking in even more cash.
These firms are using workers’ money to damage our communities while lining the pockets of some of the richest people in the country, who have also supported Trump and his campaign of cruelty: Blackstone CEO Stephen Schwarzman is worth more than $50 billion and has endorsed and fundraised for Trump. Apollo CEO Marc Rowan is worth more than $7.8 billion and Trump considered him for Treasury secretary. Valor Equity Partners CEO Antonio Gracias’ estimated net worth is $2.3 billion, and, until recently, he worked with DOGE, first around Social Security misinformation and then heading an immigration task force. The list goes on.
As the Trump administration continues to destroy consumer protections, regulations and our already meager labor laws, private equity firms, hedge funds, banks and the billionaires who run them have gained more power than ever. What we’re witnessing will lead to the largest wealth transfer we’ve ever seen from our communities to the super rich.
A huge portion of the money these financial players are using to exploit our communities is union members’ hard-earned retirement dollars. With millions of members and a tradition of organizing, the labor movement is well positioned to stop this looting. Yet, despite the movement’s long history of engagement with workers’ capital, traditional tools won’t suffice.
What should our new strategies look like? Three key approaches that labor should pursue:
1. Activate local union membership by sharing information on how their money is being invested and identifying alternative investment opportunities.
2. Identify when investment decisions are being made and mobilize members to ensure workers’ retirement money is not channeled to these billionaires.
3. Use existing infrastructure to invest in alternative vehicles that will benefit our own communities.
We must build a mass movement — led by workers and pensioners across the labor, environmental and racial justice communities — to stop the flow of money from working people to these billionaires. It won’t be easy, but some pension holders and their unions are already fighting to change this system.
In 2022 and 2023, the Oregon Investment Council’s investment in a fund that owned NSO Group — an Israeli spyware company that developed Pegasus, which “can hack into any phone, intercept calls and messages and can turn the phone into a remote listening device” — came under fire by multiple Oregon labor movement organizations. The Portland Association of Teachers passed a resolution calling for the “immediate and complete divestment of state pension funds from Novalpina Capital,” which owned NSO Group. A resolution supported by the Oregon AFL-CIO and the Oregon AFSCME called for the “immediate and complete” divestment of state pension funds from the fund that owns NSO once “suitable alternatives” are identified.
As part of its 2024 contract fight, AFSCME 3299, which represents service workers across the University of California system, called for pension disinvestment from bad corporate actors and proposals benefitting the common good. The union’s demands are excerpted below:
“The University shall divest the University Retirement Plan and General Endowment Pool from Blackstone and other housing corporations failing to commit to responsible landlord standards of: freezing of rental rates, no ‘no fault’ evictions, and safe and health[y] properties. … The University shall invest the billions currently invested in Blackstone in truly affordable, social housing for students, employees, and community … Such housing shall include substantial allocations for individuals who fall into the ‘Extremely Low,’ ‘Very Low,’ ‘Low’ and ‘Moderate’ income categories.”
In July 2024, members of SEIU 1021, which represents more than 60,000 employees in local governments, nonprofit agencies, healthcare programs and schools throughout Northern California, passed a resolution calling for divestment from weapons manufacturers and “companies that build technology such as artificial intelligence (AI) and surveillance technology for military use,” private prison companies, immigrant detention companies and border patrol contractors, “companies that profit from apartheid, colonization and ethnic cleansing,” and the fossil fuel industry.
In August 2024, International Union of Painters and Allied Trades President Jimmy Williams Jr. announced his union’s pension fund is divesting from the Gaza genocide.
Though the movement to change the pension system is growing, billionaires, their companies and their allies have spent decades building infrastructure to control the money workers spent a lifetime earning. They’ve convinced many of us, including most trustees who make investment decisions, that the current system is necessary, beneficial and the best or only pathway. But it clearly isn’t working for workers and their families.
Retaking control of our collective financial investment is an essential part of the fight against fascism and the destruction of our communities — this fight is the bedrock of creating the world we want to leave for future generations to come.
Sara Myklebust is the Bargaining for the Common Good research director at the Action Center on Race & the Economy (ACRE).
Saqib Bhatti is the Executive Director of the Action Center on Race & The Economy.
