Union Urges New Global Trade Rules, Better Pension Management

Talk of the all-but-done endorsement of Vice President Al Gore nearly overshadowed two significant developments at the AFL-CIO national convention here Tuesday: a call for new rules on global trade and a plan for more judicious use of union-controlled pension funds.

At a private meeting of labor fund trustees, the federation’s Center for Working Capital unveiled a new rating system for mutual funds that market themselves as “worker friendly” and urged the trustees to incorporate the ratings when making investment decisions.

The so-called Investment Product Review--which found some funds didn’t measure up to their own marketing--is part of a larger effort to use union pension funds to create jobs and narrow the income gap between workers and executives.

“Often, this money is being used by money managers to make a quick buck in ways that destroy jobs and undermine communities,” said Ron Blackwell, director of corporate affairs for the 13-million-member federation.

The AFL-CIO estimates $6 trillion is invested in defined-Benefit funds, with the largest portion in funds managed by private employers. About $2 trillion is in public-employee pension funds, and another $400 billion is invested in Taft-Hartley funds, which are controlled jointly by union members and employers. Most of those funds--including a surprisingly large share of the Taft-Hartley funds--are not now invested in ways that benefit workers, Blackwell said.

The rating system is part of the labor federation’s Capital Stewardship Program, launched in 1997, which also has begun examining the proxy votes of all mutual fund managers, and rating those funds on the effect of those votes on workers.

In separate action, the 700 delegates at the convention unanimously called for an overhaul of rules governing global trade and urged the World Trade Organization to take into account workers’ rights and environmental concerns as well as free capital flows.

“What we’re saying is there are serious problems with the neoliberal model of free trade. The idea that it will lift all boats isn’t happening,” said Ron Judd, executive secretary of the King County Labor Council.

Judd said he expects 30,000 union members to protest at the WTO meeting in Seattle in late November.

The convention, which opened Monday, closes today with a focus on political action. Gore is expected to address the delegates following a virtually certain vote to endorse him.