Labor & Employment Law

Responsible Investing = Profit and Jobs

By James Parks

Thomas Croft

Global union pension funds and investments are worth $17 trillion and are a major force in the global capital markets. But often those funds are run by Wall Street managers who invest workers’ money in ways that actually destroy jobs.

Thomas Croft, executive director of the Pittsburgh-based Steel Valley Authority, which helps companies in crisis on workplace retention, growth and buyout strategies, says in a new AFL-CIO Point of View guest column that union pension funds can create jobs and profits by investing their assets in responsible projects that respect workers. 

In his new book, Up From Wall Street: The Responsible Investment Alternative, Croft says he has found “worker-friendly” investors who have earned significant profits for the funds they manage. Increasingly, they are investing in green jobs.

In the book, Croft gives examples of projects in which the funds have invested that provided profit and jobs. For example, he cites an investment at the tip of Roosevelt Island [in New York]. The pension fund partnered with a development company to purchase an abandoned hospital and built new housing units that were very environmentally sustainable, and it was built union.

Croft says:

It’s time we begin to take our money back and invest in ways to rebuild our economy, to build up companies and not tear them down, to invest in real housing, real workplaces?and not in ways that are risky. It’s time for a more responsible approach to the stewardship of our retirement assets and all the institutional assets we own.

In the forward to Croft ?s book, AFL-CIO President Richard Trumka says the worker-friendly investment funds “offer an alternative to the Wall Street excesses.” Trumka says they show

we have the capacity to rebuild our economy and infrastructure, reinvigorate our cities, and create those highly anticipated green jobs of the future. 

The Obama administration should emphasize responsible investing as part of its jobs program, Croft says.

We need to go beyond the fiction that if we simply increase our gross domestic product that we’ll create good jobs. We had some of those strategies during the Clinton years, and we saw the effects of free trade and some of the other problems we had in the economy.

To encourage more responsible investing, Croft calls for financial reforms on Wall Street to stop “mega vulture investment funds” from gobbling up and dismantling companies, leaving workers on the street and communities devastated.

He also says union pension fund trustees must act to ensure that funds are being invested to help workers. Click here to read the entire column.

Full post as published by AFL-CIO NOW BLOG on December 07, 2009 (boomark / email).