Woke Investing

WM: Ensuring that “Woke” Doesn’t Leave Americans Broke: Protecting Seniors and Savers from ESG Activism, November 7, 2023

First, we would like to associate ourselves with the testimony of the AFL-CIO regarding the ability of most Americans to save for retirement. Without adequate income, they simply cannot. This can be changed.  We have proposals to raise wages generally, most especially for the working poor and disadvantaged.

• Raise the minimum wage to its purchasing power in 1965, which is somewhere in the neighborhood of $12 to $13 per hour for a 40 hour work week, or to a dollar more if the work week is shortened to four days at seven hours per day prior to overtime pay.
• Increase the Child Tax Credit, starting at post-pandemic level and increasing it to enough of an extent that Supplemental Aid for Needy Families can be safely abolished.
• Reestablish temporary disability for those who cannot work, including released inmates, alcoholics, addicts and those with mental illness who must focus on their recovery and who face stigma in returning to work. 
• Provide these individuals with educational programs to address any deficits, intensive outpatient services and psychiatric rehabilitation services. Pay participants the minimum wage for doing so - with program administration and health benefits managed by the educational provider, such as the Catholic school system.
• Increase Social Security benefits below the first bend point by 40%, as for most retirees and almost all of the disabled have little or no retirement savings. Starving retirees or forcing them to apply for Food Stamps is not a reasonable incentive to save more.
• For the future, shift the employer contribution to FICA to a credit invoice value added tax, with equal dollar crediting to each worker in any quarter.

Please see our attached tax reform plan, which will show how each item on this list would be funded.

Secondly, we entirely agree that pension funds should not be “woke.” Instead, they should allow for the active participation of fund management for the benefit of retired or soon to be retired investors. This would necessitate changes to law, including abandoning the concept of a unitary board of directors, abandon the prudent expert rule under ERISA and adjusting the thresholds in the Taft-Hartley to allow organized labor to invest more aggressively for the benefit of their members, as follows:

• Allow up to one third of pension assets to be invested in the firms that employ members.
• Allow up to one third to be invested in companies which provide goods and services to members, including in the banking, homebuilding, medical and retail sectors with adequate board representation in line with amounts invested, rather than simply serving as an oversight mechanism which allows Chief Executive Officers to line their pockets.
• Allow up to one third to be invested for merger and acquisition purposes, including investment in non-union owned firms with the specific goal of changing these arrangements.

It seems we have run out of thirds, which leaves no room for ESG investment.

Attachment - Tax Reform