Abstract

"The Financial Turn in Union Pensions: The Pension Fund of Retail, Wholesale, and Department Store Workers Local 65 "

Jeffrey Sklansky, University of Illinois, Chicago (sklanskj@uic.edu)

Local 65 of the Retail, Wholesale, and Department Store Workers Union arose in the 1930s and 1940s organizing low-paid workers in the small warehouses and shops tied to the garment industry and other light manufacturing in New York City. The union mobilized its dispersed service-sector members with a “catch-all” organizing strategy and strong ideological affinities to the Communist Party. Banned from the CIO for six years amid the anti-communist reaction of the postwar years, the union won a pension plan in 1952. As in other multi-employer pensions in the construction, transportation, and garment industries, the union effectively ran the pension fund. But as Local 65 (renamed District 65) distanced itself from its Communist-influenced past, it also distinguished itself from other union-run pensions.

While other union funds invested largely in conservative, fixed-income securities such as government bonds, District 65 invested avidly in the stock market, hitching its aging members’ fortunes to Wall Street long before most of its peers. Even as the union’s militant organizing and successful strikes, along with its civil rights and antiwar advocacy, earned it a reputation as “the ideological core of left-wing labor,” its pension became known as a trailblazing, “performance”-oriented fund investing in “go-go” growth stocks. The union-appointed chair of the fund’s board of trustees, Jack Paley, had gone to jail in the McCarthyite purge of the labor movement. Yet in consultation with other veterans of the union’s earlier struggles, Paley became an enthusiastic exponent of institutional investment in pursuit of maximum returns on workers’ savings.

This paper will explore the complex relationship between the pension fund’s investment strategy and District 65’s radical roots. It will also reflect on the lessons to be learned for our own era, when a scattered service-based workforce is central to organized labor and aggressive investment in the stock market has become the norm for retirement funds.