By J. W. Mason
On Oct. 1, union construction workers broke ground on the Residential Resorts International of Vernon Hills, a 287-unit retirement community in suburban Chicago.
For the area's growing number of seniors, the project creates more housing opportunities.
For union members, the undertaking represents a strategic move to create good union jobs and build stronger communities. The AFL-CIO Building Investment Trust, which lends only to 100 percent union-built projects on behalf of its public and multiemployer pension-plan investors, is financing the project. So, not only can unions with pension-plan money in the BIT look forward to solid returns, Chicago-area building trades unions—including Teamsters Local 705, Bricklayers Local 21 and Plumbers and Pipe Fitters Local 130—are creating work for their members and reinforcing good employment standards for all workers.
According to the Bureau of Labor Statistics, $1 million invested in multifamily residential construction produces 6.8 construction jobs and nine jobs in other industries. By that standard, the Vernon Hills project will generate approximately 450 jobs—200 union construction jobs and 250 jobs in other industries.
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| | | The new workforce: Poultry workers and their allies testified before a bipartisan group of congressional lawmakers who traveled to Maryland in March to hear how the chicken catchers lost all benefits, overtime and vacation after Perdue reclassified them as "independent contractors." |
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Making a union difference with pension funds
Building trades unions' pension plans have been investing in union-built real estate projects for decades—and their funds get superior returns because union labor results in high-quality jobs completed reliably and on time.
"When we're getting a good return on our investment, and we're building union homes, it's a win-win situation," says Terry Nelson, trustee of the Carpenters Pension Trust Fund of St. Louis, which invests in mortgages of union-built single-family homes.
In recent years, other union-fund managers have begun following the building trades' example, taking a more active role in shaping their investments to ensure their money ends up at union-friendly companies. They are channeling union members' savings to companies where management's main goal is not lining its pockets but looking out for the company's long-term viability. At the same time, union-fund managers are using the power of workers' pension savings—some $5 trillion—to create changes at companies that don't meet those tests.
Investing in the future
| |  | |  | | | A New Voice in the Boardroom: Working Families In March, 85 percent of Oregon Steel's voting shareholders opposed company management in a special consent solicitation—a move backed by a coalition that included UNITE's Amalgamated Bank's LongView Fund and the AFL-CIO. Across the nation, similar union-backed proposals are seeking to advance high-road corporate policies that create long-term value for worker-owners. Last year, union-affiliated funds submitted and won more shareholder proposals than any other investor class. At Oregon Steel, management permanently replaced striking Steelworkers, resulting in a $30 million potential back-pay liability. As the company's share price plummeted, top executives sought to save their own jobs by preventing the board of directors from exercising independent oversight. The coalition's proxy vote proposals argued that Oregon Steel managers had put their own interests ahead of the company's—and most voting shareholders agreed. Corporate managers are recognizing that working families own one-quarter of the country's publicly traded companies through their pension funds—and working families intend to be owners in fact as well as in name. | |  | |  |
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One of the leading union-friendly investors in the United States is the Union Labor Life Insurance Company. ULLICO's Separate Account J, with more than $1.7 billion in assets, invests exclusively in union-built real estate projects. ULLICO's Separate Account P, a private capital account, invests in smaller, nonpublicly traded companies that have pledged to partner with their workforces.
As part of ULLICO's $5 million investment in RSI Inc., the company agreed that its nursing home facilities would be constructed with 100 percent union labor and its workforce covered by neutrality and card-check agreements. By ULLICO estimates, the agreements with RSI will result in 2.5 million hours of work for building trades union members and 2,400 union service jobs.
ULLICO and all union-fund investors focused on the future are guided by the same principle: Working families' pension fund assets must be invested for the long term in ways that respect those to whom it ultimately belongs.
"The first priority for our funds should always be a good return for our members, so that their retirement is secure," says UA President Martin Maddaloni. "But there's no reason their money can't be working on their behalf in the meantime, too."
