Abstract

"'We Want the Chase Manhattan': Control and Responsibility in the Management of the ILGWU’s First Retirement Fund"

Natalia Shevin, New York University (nds408@nyu.edu)

In 1943, the International Ladies’ Garment Workers’ Union established the first retirement fund in the garment industry. It covered 35,000 workers in the locals of the Cloak and Suit division after they turned 65 years old. The fund promised an entirely new type of benefit to workers, who led precarious lives in their old age despite the expansion of Social Security in 1935. The fund also created an entirely new type of capital for organized labor: unlike general treasuries, staff payrolls, and strike funds kept in cash for ready disbursement, “pension funds can plan for the long run; they have time on their side,” as economist Nathan Belfer noted in 1953. With such a timetable, the labor leaders, employers, and public officials on the Board of Trustees of the Cloak and Suit Retirement Fund managed and invested the garment industry’s capital for the first time. It did not happen seamlessly: in fact, the Board fired its first manager, Herbert Zame, in 1950. This incident, as well as related discussions about labor-controlled retirement funds, created a spirited conversation about the purpose, investment, and integrity of retirement funds controlled by labor leaders in the immediate postwar period. This paper addresses the stakes of Zame’s firing as the ILGWU confronted the imperatives of honesty, potential for mismanagement, and requirement of internal oversight when controlling its own capital.