Watching the Occupy Vancouver encampment unfold reminds me of a backstage moment with the late comedian Craig Russell.
When an autograph seeker approached him for a signature he asked her what she did.
?Oh, nothing really,? came the response. ?The problem with doing nothing,? Russell shot back, ?is that you never know when you?re finished.?
What does Occupy Vancouver really want? Nothing and everything, really, so it?s never-ending, even as it can claim some credit for a much wider understanding of the growing inequality in our society.
Identifying that problem is the easy part. Slightly harder is educating people about the insidious impact of growing inequality on every segment of our society (see my earlier columns on this).
Hardest of all is doing something about it: either stopping extreme high-end compensation growth at the source or redistributing income.
Public sector unions have been happy to embrace the Occupy Vancouver cause.
What?s missing in the unions? support for Occupy Vancouver is an admission of the connection between union pension funds and the exorbitant corporate salaries they?re railing against. Control over corporate Canada has shifted from high-net-worth individuals, who controlled 70% of the shares listed on the TSX in 1972, to pension funds that owned 70% of the asset value of the TSX 10 years later.
Aldyen Donnelly, president of WDA Consulting and a long-time student of this topic, makes this point based on data from a recent Tower Perrin report on global pension assets and concludes that public sector unions now own two-thirds of Canadian pension assets ($750 billion worth).
By her calculations, Canadian public sector unions own assets worth 35% of the market cap of the TSX. In theory, that should give them a powerful ?say on pay? – to cite one initiative of the Canadian Coalition for Good Governance that overlaps with Occupy Vancouver concerns.
In 2010, Donnelly writes, ?two B.C. public sector union organizations – representing B.C. government employees and employees of B.C. municipalities – controlled over $44 billion in pension assets and paid a relatively small club of directors, trustees, fund managers, investment counsellors and consultants over $90 million in fund administration and management fees for one year?s worth of moving the unions? assets around.
?These public sector union pension fund advisers and managers did generate a 15% return for the unions in 2010. But the unions paid the money movers almost as well in 2008 and 2009, when they racked up 15% to 20% in pension asset losses.?
Her conclusion: union leaders should get off the Vancouver Art Gallery steps and into the boardrooms of companies they ?own? and scale back the exorbitant executive compensation they?re railing about.
Unfortunately, it?s not that simple. With half of union pension fund assets in bonds, the unions? equity ownership is a lot less than 35% of all TSX companies.
In a challenge also faced by the Occupy movements, the pension funds would have to get together and figure out exactly what they want.
How can they exert real oversight of the many companies they invest in? How will they scale board and management firewalls that fiercely protect the status quo?
None of that is easy or quick. But sliding the majority of Canadians into the inequality trap didn?t happen overnight.
Making real change always involves hard work and overcoming opposition.
It?s not as simple as popping up some tents and expressing endless frustration. ?
