SEIU has long called for public infrastructure investments that could help create jobs and stimulate local economies, including using public pension assets to fund such projects. Now California, home of the nation’s largest public pension fund, is seeking greater opportunities to spur economic growth by doing just that.
This week the California Public Employees’ Retirement System (CalPERS) has earmarked up to $800 million for investments in California infrastructure such as transportation, energy, utilities and natural resources.
“We know that we need jobs to get our city and state back on track and infrastructure projects are the way to creating good paying jobs,” said SEIU 721 President Bob Schoonover.
“Infrastructure drives economic development. Whether it’s a massive project like a dam or power plant, or simply retrofitting schools or fixing roads, these projects pay dividends for decades.”
“Infrastructure is an integral part of the CalPERS investment portfolio,” said George Diehr, Chair of the CalPERS Investment Committee. “We’re looking for long-term economic value by providing safe, reliable, efficient and high quality services that are vital to California that not only meet our risk-return objectives but that we believe have the extra benefit of creating jobs and ultimately improving the economic climate.”
According to The Sacramento Bee, the money is part of a $5 billion worldwide infrastructure effort that CalPERS is creating as it joins the growing list of big investors leaping into that field. The move reflects big investors’ growing appetite for public infrastructure, says the paper.
In a recent op-ed published in the San Jose Mercury News, Dave Cortese, president of the Santa Clara County Board of Supervisors, urged for pension funds to be invested in projects that create local jobs while generating good investment returns. Cortese says California’s infrastructure desperately needs an overhaul – and he has a vested interest in making sure CalPERS makes smart investments that will also help his county.
“The Wall Street-fueled bubbles and busts of the last decade collapsed our national economy and left millions languishing in unemployment lines,” he writes. “While California corporations are raking in record profits, they are expanding their foreign work forces at a faster rate than California’s. Unlike the corporations, domestic pension funds are motivated to invest in American jobs. By doing this, CalPERS would have a golden opportunity to play a significant role in improving the state’s economy.”
Other states may be following California’s lead in order to address infrastructure needs while increasing returns on investments of their public pension funds. As Cortese says, the idea is a “win-win” for California.
By Ashley Wood