{"id":607575,"date":"2022-04-15T15:02:16","date_gmt":"2022-04-15T15:02:16","guid":{"rendered":"https:\/\/jacobinmag.com\/2022\/04\/starbucks-board-chair-mellody-hobson-profit-union-pension-retirement-funds\/"},"modified":"2022-04-15T15:02:16","modified_gmt":"2022-04-15T15:02:16","slug":"starbucks-board-chair-is-making-millions-off-union-pension-funds","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2022\/04\/15\/starbucks-board-chair-is-making-millions-off-union-pension-funds\/","title":{"rendered":"Starbucks\u2019 Board Chair Is Making Millions Off Union Pension Funds"},"content":{"rendered":"\n \n\n\n\n

Starbucks chairwoman Mellody Hobson runs an investment firm that\u2019s raking in millions in fees from unionized workers\u2019 pension funds \u2014 all while Starbucks wages an aggressive anti-union campaign against its workers.<\/h3>\n\n\n
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\n Mellody Hobson, Starbucks chairwoman and president of Ariel Investments, speaks at the Fortune Most Powerful Women Summit in Washington, DC, 2017. (Paul Morigi \/ Getty Images for Fortune)\n <\/figcaption> \n<\/figure>\n\n\n\n\n \n

As Starbucks wages an aggressive anti-union campaign resulting in the firing of sixteen pro-union workers<\/a>, the company\u2019s chairwoman has been running an investment firm raking in millions in fees from unionized workers\u2019 pension funds while delivering subpar returns to retirees.<\/p>\n

Starbucks chairwoman Mellody Hobson has been publicly defending the coffee giant\u2019s union-busting activities. She recently told<\/a> Starbucks shareholders that while \u201cwe absolutely understand and recognize the right of our partners to organize,\u201d the company will refuse to stay neutral in union elections because that \u201climits our ability to speak to our partners in certain ways, and that goes directly against the DNA of the company.\u201d<\/p>\n

At the same time, Hobson is leading Ariel Investments, which manages more than $640 million in assets for Chicago-area pension funds, earning the firm more than $3 million annually in fees. The members and retirees of those pension funds are overwhelmingly represented by unions \u2014 including the same one, Service Employees International Union (SEIU), that is seeking to organize Starbucks workers.<\/p>\n

In effect, Chicago-area union members are financing \u2014 with fees and poor returns \u2014 Hobson\u2019s career, all while she helps lead a Fortune 500 company working to block a union drive and prevent a landmark victory for the larger labor movement.<\/p>\n

\u201cDecades of underfunding of public pension funds has effectively held working people and retirees hostage to asset managers that actively work against the interests of working people, while not delivering what they\u2019ve promised,\u201d Samir Sonti, a professor of labor and urban studies at the City University of New York, told the\u00a0Lever<\/em>.<\/p>\n\n \n\n \n \n \n

An Evangelist for “Active Management”<\/h2>\n \n

Hobson is well-known for her friendship with the Obamas, her marriage to Star Wars billionaire George Lucas, and her deep ties to Chicago\u2019s political machine. Less known is her success convincing pension overseers to funnel unionized workers\u2019 retirement savings to her investment management firm, all while she leads a publicly traded company that is hostile to the labor movement.<\/p>\n

Hobson\u2019s balancing act between finance, anti-union capital, and labor has been predicated on her sales pitch to pension officials about \u201cactive management\u201d \u2014 which seeks to beat the market by actively picking stocks \u2014 that proponents insist deliver better results than low-fee stock index funds. Hobson\u00a0told<\/a>\u00a0an audience in 2019 that investors \u201cwill understand that it is worthwhile to pay for an active return.\u201d<\/p>\n

If that was true, Hobson and pension officials might be able to insist that big returns for union workers\u2019 retirement funds justifies funneling money to a top official of Starbucks even as the company now tries to block a union.<\/p>\n

But the investment results tell a different story:<\/p>\n