A New Look at Labor Day
Robert F. Abbott
A day to reflect on accomplishments of working people: That's been proud tradition since first, unofficial, Labor Day back in 1882.
But, one of labor's greatest accomplishments has gone largely unrecognized. Since end of World War II, working people have bought up a huge chunk of big business. They now own a piece of just about everything in business, from multinational corporations to small companies that build mini-malls in their neighborhoods.
It may be greatest economic transformation since Industrial Revolution; management guru Peter Drucker calls it "The Pension Fund Revolution."
To get a sense of transformation, consider this: At end of 2001, America's 242 billionaires had assets totalling about $800 billion. That's a sizable amount, certainly, but working people had assets of $11.8 trillion in pension and mutual funds. That's almost 15 times as much as billionaires.
Most working people contribute only modest amounts to their retirement plans, but there are simply so many of us that our collective nest egg grew very quickly. If you're still not sure, try this on your calculator: Multiply a contribution of $1,000 per year by one million working people. Answer: $1 billion dollars per year. Now note there are hundreds of millions of working people here and in other countries. And we're contributing new money every year.
Even a relatively small number of working people can build a big fund. For example, New York State Common Retirement Fund, with 944,000 members in or retired from state public services, had assets of $112 billion at end of March last year. According to Fund's annual report for 2002, about $76.6 billion of that total was invested in companies. The remainder, about $35 billion, was in bonds, mortgages, and other types of loans.
Look at private sector and unions, too. To cite just a couple of examples, Pensions & Investments magazine estimated that General Motor's pension fund had assets of $82.5 billion and pension fund of Western Conference Teamsters had assets of $22.6 billion, at September 30, 2001.