An earlier version of this piece appeared in Public Works Financing, for which Mr. Poole writes a regular column, © Robert W. Poole, Jr., 2008.
Published here September 2008.

Editor's Note | Introduction | An Alternative Source of Funding 
A Shift in Investment Thinking | Tax Implications Overlooked
Pension Funds in Australia and Canada | Construction Trade Unions in the US

Construction Trade Unions in the US

I have no doubt that U.S. construction trade union pension funds, private sector pension funds, and insurance companies will continue to invest in the expanding private-sector infrastructure market (such as toll roads developed via long-term concessions). However, I am not so sure about public-employee union pension funds. Despite the initial step taken by CalPERS, I am made cautious by a previous round of union activism during the 1990s.

When competitive contracting of services like street maintenance, wastewater treatment plants, and prisons become popular last decade, there was a well-organized effort by several major unions to resist. They brought pressure to bear on their pension funds to divest from companies such as Corrections Corporation of America and Waste Management. These were portrayed as enemies of public-sector unions for doing their jobs at lower cost.

Will SEIU, AFSCME, and other major unions really allow their pension funds to invest in privatized toll roads and airports? If they don't, they may be criticized for ignoring the best interests of their retirees. But if they do, they may be criticized for not being in solidarity with their brethren in state and municipal jobs.

It will be interesting to watch.

Pension Funds in Australia and Canada  Pension Funds in Australia and Canada

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