Financialized Fiscal Politics: New York State Public-Sector Pensions and the Transit Workers' Union

• In Event: 40860 - Section on Economic Sociology Roundtables
  In Refereed Roundtable (60 minute): Table 5. Finance

Abstract

Public-sector pension funds in the United States own over $10 trillion in assets. They are many of the largest institutional investors, owning approximately 33% of all capital in private equity and 15% of the U.S. stock market. Public pension funds use taxpayer dollars to invest in financial markets as way to fetch investment returns that will provide retirement income to approximately 34 million public-sector workers. Such pension funds have been identified by political economists as actors that “fuel financialization” by investing for high-yield returns to compensate for underfunding problems in state fiscal policy. How have contentious politics between unions, taxpayers, and politicians directed public pension funds toward financialization? To answer this question, we focus on unionized public-sector transit workers with the Transportation Workers Union Local 100 in New York City from the 1980s to 2000s. We examine their contentious politics over funding, fiscal, and investment decisions by drawing upon meeting minutes from board meetings with the New York City Retirement System and its annual reports between the 1980s to 2000s, archival sources from the Tamiment Archives housed at NYU, and the Straphangers Campaign records housed in the New York Public Library. Public pensions funds in the United States have been a significantly understudied, despite their size as institutional investors and centrality to financialization. We examine the contentious politics over public-sector pensions as a way to understand the mechanisms and coalitions that underlie the investment and fiscal decisions of these funds and the larger contours of financialized politics. This examination sheds light on the decision-making of central actors to financialized political economies, help theorize the policy preferences of taxpayers, and identify new, underrecognized coalitions of organized labor. By attending to the public-sector labor movement, we also answer many calls in the field and develop a new promising area of research.

Authors

• Youbin Kang, Cornell University

• Devin Wiggs, Cornell University