Celebrating Labor Day and our "Common Wealth"
On September 5, 1882, 200 blacksmiths, printers, railroad men and other union members took their boots to the streets of New York City to demand "a day of the people." In a show of solidarity, over 10,000 workers and their families joined the march, which ended in a picnic and festive celebration at Wendel’s Elm Park, that grew to 25,000 people. Similar Labor Day events took form in Oregon and Colorado then slowly spread across the country. After two years of appealing to the national government, President Grover Cleveland signed into law a bill proclaiming the “National Labor Day Holiday” in 1894.
As much as most of us enjoy the time off, Labor Day is not just about picnics, vacations, back-to-school specials or finishing some work around the house. Labor Day is about honoring the progress that organized workers struggled for decades to achieve. If you personally benefit from taking off on Labor Day, and enjoy weekends, the 8-hour day, better paychecks and working conditions, Social Security and retirement benefits, you should offer thanks to the people who sacrificed to win it.
Samuel Gompers, founder of the American Federation of Labor, was quoted in The New York Times in 1910 as noting the date "glorifies no armed conflicts or battles of man's prowess over man...no martial glory or warlike pomp signals Labor Day." Rather "of all the days celebrated for one cause or another, there is not one that stands so conspicuously for social advancement of the common people as the first Monday in September."
The celebration of Labor Day was not without a cost. Many employers and political leaders called the Labor movement un-American, using some of the same anti-immigrant slurs that are unfortunately in vogue today among some Presidential candidates. Such tactics did not deter working people, who went on to fight for and foster a broader prosperity and the middle class.
But working people not only helped win these things that many of us take for granted. For over a century, Labor’s capital stewards were the original “crowd-funders”—pioneers of long-term, responsible investments and the savviest architects of good corporate governance. As far back as 1850, Amsterdam’s unions built social housing to address overcrowded slums. In the early 1900’s U.S., Samuel Gompers led Labor's investments in social housing and others invested in banks, credit unions, clinics, co-ops and businesses. These capital stewards later led the way toward responsible pension strategies.
Labor’s financial institutions, pension funds and partner investors not only deployed productive, responsible capital for decades but pushed “the boss” to be fairer, pioneering early corporate governance campaigns epitomized by the work of garment unions to organize JP Stevens (commemorated in the Oscar-winning movie Norma Rae). Today, labor's capital stewards are at the forefront of shareholder actions demanding livable wages and fair benefits, CEO pay disclosure, diversity in the boardroom and the executive suites, etc.
In the 1960s, working with the Civil Rights movement, the AFL-CIO formed new housing investment institutions as a new thrust in the movement for social and economic justice. With the leadership of the construction trades pension funds, these new institutions created affordable and livable workforce housing in dozens of cities.
Since the 1980s, industrial labor leaders have designed shrewd capital strategies, deploying worker-friendly investment banks and new capital vehicles that turned around or expanded critical industries. And, in the new millennium, teachers, public, and service employees have invested their pension funds in energy, transportation and infrastructure innovations to grow the clean economy. These labor leaders have invested in the “real economy” – the part of the economy that is concerned with actually producing goods and services, as opposed to the part of the economy that is concerned with buying and selling on the financial markets.
Global Labor supported and joined strategic alliances like the UN Principles of Responsible Investment (PRI), whose founding board included labor investment aviators. The UN PRI has grown exponentially since its founding in 2006, claiming 1,500 investment, finance, corporate and pension fund signatories, whose assets exceed $60 trillion.
A new generation of responsible investors is mobilizing capital for complex buildings, community infrastructure projects, wind and solar projects, hybrid buses and other inventive solutions. By investing for the long-term, our money—the trillions in workers’ pensions and savings, insurance funds, banks and endowments—can deliver positive social, economic and environmental outcomes, both for beneficiaries and for society at large.
The successes of responsible investment leaders from around the world are examined in The Responsible Investor Handbook: Mobilizing Workers’ Capital for a Sustainable World, co-authored by Thomas Croft and Annie Malhotra. Commissioned by the AFL-CIO and sponsored by a number of progressive investors, the Handbook was published by Greenleaf Publishing in August. Richard Trumka, President of the AFL-CIO, provides one of the forewords.
Despite the progress made toward responsible and sustainable investment, significant barriers remain. The book addresses those by documenting the seven powerful drivers fueling responsible investment, including:
The 2015 Department of Labor (DOL) ruling on ETIs—economically-targeted investing— which annulled a wrong-headed Bush Administration edict and strongly advised investors to consider environmental, social and governance (ESG) factors in investing;
The “Fight for $15” and campaigns across the globe to end income inequality, which is a huge drag on economic growth and an impediment to social harmony;
The 2015 Paris Global Warming Accords, which cemented a commitment from 195 countries, and other new initiatives toward renewables, including a major pastoral letter on the topic issued by Pope Francis;
The incredible growth of the PRI itself, representing an ascending share of global capital markets;
Performance studies from Oxford, Harvard & Mercer, et al, showing that responsible investment and good corporate governance inevitably yields financial out performance.
The Handbook’s starting premise is that great change is possible. It offers a new vision for responsible investment, sharing best practices in areas such as investing in community-scale infrastructure, making housing more affordable and energy efficient, responding to climate change, and creating high-paid and high quality jobs.
Today, the stewards of workers’ capital are banding together to reverse the assault on the middle class and put forward a path toward a sustainable economy. Everyone can work together to grow the responsible investment universe. If you want to be part of something bigger this Labor Day holiday, pick up a copy of The Responsible Investor Handbook and pass it along to your investment advisor, retirement consultant, pastor or priest, and share it with your family, friends and favorite presidential candidate.
Contributions to this article were made by Tom Croft and Annie Malhotra, co-authors of the Responsible Investor Handbook