Union Pensions and the Inconsistency of Union Leaders

The following was posted on Facebook by one of my friends. It refers to OMERS

“OMERS, the Ontario Municipal Employees Retirement System, invests on behalf of more than 500,000 public servants, including police officers and firefighters. The fund manager’s largest customer is the Canadian Union of Public Employees. In an interview, CUPE Ontario president Fred Hahn said the union is calling for a review of OMERS investment decision-making processes after “an epic failure for workers.”

“We understand that we are long-term investors, and should not focus on results from just one year. However, OMERS has consistently underperformed versus other, similar plans,” Mr. Hahn said.

OMERS’s annual return of 8.2 per cent for the 10 years prior to 2020 trails the 9.8-per-cent performance in the same period at the Ontario Teachers’ Pension Plan and the 11.4-per-cent return over the past decade at the Healthcare of Ontario Pension Plan.

CUPE is in negotiations on retirement benefits for its members, and is pushing for increased employer contributions to pension plans.”
My reply: 
 
Once again [a similar post was posted on the same day, to which I also replied], references to OMERS’ loss of profits by Mr. Hahn involves silence concerning the source of those profits. The source of those profits is–the exploitation of workers. However, nothing is said at all about that. The concern, rather, is with the loss of profits for the plan–and not at all about the exploitation of the workers who produce profits for employers.
 
Hence, Mr. Hahn’s own statement can be turned against him. He claims:

” In an interview, CUPE Ontario president Fred Hahn said the union is calling for a review of OMERS investment decision-making processes after “an epic failure for workers.”

After Mr. Hahn’s epic failure in criticizing the exploitation of workers–the source for OMERS’ investment profits–we should review CUPE’s own silences concerning the exploitation of workers.

To start with, CUPE’s own idealization of collective agreements as “fair contracts” (fair collective agreements) shows CUPE’s “epic failure for workers.” No collective agreement is fair because working for an employer is unfair–period.

The silence of unions over such issues speaks mountains about “the epic failure for workers.”
I may add that CUPE is the largest union in Canada, and I have provided proof that it claims that collective agreements are somehow fair (see  Fair Contracts (or Fair Collective Agreements): The Ideological Rhetoric of Canadian Unions, Part One). 
 
 
Of course, there was no reply to my criticisms. The union reps do not feel the need to justify their assertions–or perhaps they prefer to keep silent since they cannot justify their assertions. 
 

Socialism, Part Six: What It May Look Like, or Visions of a Better Kind of Society Without Employers

The following is a continuation of previous posts on the possible nature of socialism that excludes the power of employers as a class.

In the following, Tony Smith elaborates on the capital-assets tax, which is the basis for the generation of new investment and the supply of public goods. From Globalisation: A Systematic Marxian Account (2006. Boston: Brill), pages 304-305:

(v) The origin of funds for new investment and public goods is a flat tax
on the non-labour assets of all enterprises.16 In Schweickart’s proposal, the
rate of this tax is initially set by a democratically elected legislature, operating
on the national level. This legislature also decides on the appropriate division
of revenues between funding for national public goods and funds that are
allocated to democratically elected regional and local legislative bodies. Each
of these assemblies, in turn, must also decide upon the level of funding for
public goods to be supplied in the relevant geographical area vis-à-vis the
level of funds set aside for distribution to the level below it. These legislative
bodies can also set aside a percentage of funds for investment in areas of
pressing social needs.


(vi) After all decisions have been made regarding the general level of new
investment and the order of social priorities, and after funds required for
public goods on the national, regional, and local levels have been allocated, the remaining revenues are distributed to local communities on a per capita
basis (at least this should be the presumption in the absence of compelling
reasons to do otherwise, such as the need to temporarily favour historically
disadvantaged regions). Community banks would then undertake the actual
allocation of new investment funds to worker collectives. The boards of
directors of these banks would include representatives of a broad range of
social groups affected by the banks’ decisions. New enterprises would be
formed, and existing ones expanded, through allocations by community banks
rather than private capital markets.

The capital-assets tax assumes that the workers have right of use of most of the means of production of our lives (there may be some room for independent businesses, but they do not form the bulk of economic activity). If they do, then instead of new investment being derived from the private decisions of boards of directors of corporations, it is derived from a democratically-elected national legislature which sets the rate of the capital-assets tax.

There are two general aspects to the tax (like any tax): the flow from a source to the government and the flow of the tax to institutions. The source is the capital assets used by democratic worker cooperatives. It is a flat-rate tax based on the value of the means of production that is applied to capital assets used by workers.

The flow of the revenue generated by the tax to people only arises after deductions from revenue required for investment in projects at the national level. Once this has been deducted, then the revenue is distributed to the regional communities on a perc capita (per person) basis; the regional democratic bodies which in turn allocate investment funds for investment in projects at the regional level. The remainder is then allocated to the local community via public banks, likewise on a per capita (per person) basis.

This principle of distribution of the revenue generated from the capital-assets tax on a per capita basis means that, in areas where there is a concentration of means of production relative to the number of people who live in the area, the outflow of taxes paid will be relatively greater than the inflow of revenue from taxes when compared to areas where the concentration of means of production is relatively smaller.

The capital-assets tax is to replace interest and dividend payments. As noted in the previous post on this topic, since many workers in the more industrialized capitalist countries have at least some investments in the stock market or hold bonds, GICs, and so forth and, furthermore, pension funds are generally linked to investment, a policy that at one sweep sought to abolish interest and dividend payments may well be opposed by the working class, initially. Consequently, some form of transitional program may be necessary, one where interest and dividend payments are gradually phased out, or one where compensation for nationalization occurs. In any case, the ultimate goal is to abolish interest and dividend payments and replace them with a flat capital-assets tax.