{"id":1644,"date":"2026-08-24T07:36:39","date_gmt":"2026-08-24T07:36:39","guid":{"rendered":"https:\/\/urbaneconomynews.com\/?p=1644"},"modified":"2026-08-24T07:36:39","modified_gmt":"2026-08-24T07:36:39","slug":"a-teachers-union-hits-the-wrong-target","status":"publish","type":"post","link":"https:\/\/urbaneconomynews.com\/?p=1644","title":{"rendered":"A Teachers\u2019 Union Hits the Wrong Target"},"content":{"rendered":"
\n

The California State Teachers Retirement System (CalSTRS) is the largest teachers-only public pension system in the country, with more than $400 billion in assets under management. As of December 31, 2024, CalSTRS directly<\/em> held three-quarters of a million shares of Target Corporation, worth more than $100 million. If one were to add in the Target holdings of the Teacher Retirement System of Texas and the New York State Teachers\u2019 Retirement System (the second and third-largest teachers-only plans in the country, respectively), then the total value of shares owned would jump by another $60-plus million. Add in the remaining state teacher retirement systems, plus the city systems of Chicago, Denver, Kansas City (Missouri), New York City, St. Louis, and St. Paul, and the total value of Target shares directly<\/em> held by teacher pensions is well into the multiple hundreds of millions, at the very least. Add in the value of indirect<\/em> shares held through various index funds and ETFs, and teacher retirement plans hold literally billions of dollars\u2019 worth of Target stock. Given all this, it\u2019s more than fair to say that Target is a key component of teachers\u2019 pension portfolios and, as a result, the company\u2019s long-term success is directly linked to American teachers\u2019 retirement security.<\/p>\n

Read more Conspiracy Theories Are an Exercise in Flawed Thinking<\/a><\/p>\n

And yet\u2026<\/p>\n

This past weekend, the American Federation of Teachers, the second-largest teachers\u2019 union in the country and likely the most prominent, launched a new campaign urging parents and students to boycott Target for back-to-school supplies and clothes. Randi Weingarten, the politically active and politically connected president of the AFT, released a video detailing the boycott and explaining why it is, in her eyes, an absolute moral imperative to teach Target a lesson. According to an AFT press release, \u201cThe \u2018Shop Smart, Support Working Families\u2019\u00a0campaign was created in response to Target\u2019s refusal to condemn the unlawful Immigration and Customs Enforcement activity that continues to roil communities around the country.\u201d Weingarten herself complained that \u201cWe gave Target ample time to stand with the communities in which they operate and help their neighbors, but its silence about federal immigration abuses has been deafening.\u201d<\/p>\n

The AFT is angry at Target because Target and its executives didn\u2019t do what the union wanted: make its political<\/em> fight their fight. And it\u2019s actively trying to damage the company because of that refusal.<\/p>\n

Taken together, these two facts\u2014teachers\u2019 pensions hold considerable equity in Target, while teachers\u2019 unions are purposefully trying to harm the company\u2014say quite a bit about the state of markets and politics in the country at the moment and suggest a handful of lessons that can and should be learned by outside observers.<\/p>\n

The first thing this strange confluence of circumstances tells us is that people, in general, neither understand what a publicly traded corporation is nor fully grasp its purpose. Corporations are, as a rule, portrayed in our popular media and perceived by most average Americans as far-off, distant, heartless organizations run by and for rich people. In truth, publicly traded corporations like Target are owned by their shareholders, the overwhelming majority of whom are just ordinary folks\u2014like teachers\u2014who are trying to save for their retirement. Public pension plans, 401(k)s, IRAs, etc., are the primary savings vehicles for most \u201cinvestors.\u201d The perception of investors as a bunch of \u201cfat cats\u201d on Wall Street who own everything <\/em>and manipulate everything<\/em> for their benefit is largely a myth, and it has been for decades. You, your spouse, your kids, your mom and pop, and their small business are the majority of investors and, by extension, the majority of owners of most corporations.<\/p>\n

There is no doubt that a significant disconnect exists between the owners of corporations (principals) and those who run them on the owners\u2019 behalf (agents). This is a longstanding concern that has prompted much discussion, consternation, and even confrontation over the decades. Moreover, with so many owners\u2014literally millions<\/em> of people\u2014many opinions on how best to run the company exist, and those opinions often and passionately conflict with one another. Given this, basic rules governing the conduct of the agents exist and are updated constantly. This is what\u2019s known as \u201cgovernance.\u201d The most famous description of foundational principles of governance, designed to secure the interests of all shareholders, was provided by the economist Milton Friedman:<\/p>\n

In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibil\u00adity to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.<\/p>\n

That\u2019s it. That\u2019s what corporate executives are supposed to do. That\u2019s how they are meant to treat their shareholders\u2014by providing them a return on their investment. That\u2019s the fundamental principle of governance: produce returns for all<\/em> investors.<\/p>\n

Read more Federal Prosecutors Charge Chinese National With Voter Fraud in 2024 U.S. Election<\/a><\/p>\n

Unfortunately, some people think that their opinions, wants, and desires are more important than other people\u2019s right<\/em> to earn a return on their investment. They think that corporations exist to serve their ends and to accommodate their political beliefs and ambitions. Even more unfortunately, many of these people have been encouraged to think this by the very corporate \u201cagents\u201d who know better and who have moral and legal obligations to the contrary.<\/p>\n

In August 2019, for example, the Business Roundtable (BRT)\u2014a nonprofit organization whose members are the CEOs of the largest corporations in the United States\u2014issued a declaration called a \u201cStatement on the Purpose of a Corporation.\u201d In it, the 181 signatories proclaimed that they and their corporations were dedicated to being less focused on shareholders and more focused on stakeholders. The chairman of the Roundtable at the time was Jamie Dimon, the CEO and chairman of the largest bank in the world (by market cap). \u201cThe American dream is alive,\u201d Dimon lamented, \u201cbut fraying.\u201d He implied that only the executives of the world\u2019s biggest companies (the agents to their tens of millions of principals) could save the American Dream. More to the point, he implied that they could only do so by redefining the purpose of a corporation. \u201cThese modernized principles reflect the business community\u2019s unwavering commitment to continue to push for an economy that serves all Americans.\u201d<\/p>\n

Every CEO who signed that document alongside Dimon (and Larry Fink from BlackRock, Tim Buckley from Vanguard, Brian Moynihan from Bank of America, Michael Corbat from Citigroup, Jeff Bezos from Amazon, etc., etc., ad nauseam<\/em>) is responsible for sowing confusion among the people, for encouraging people like Randi Weingarten to think of Target as a tool to accomplish her goals. These CEOs may not fully agree with this declaration they issued seven years ago, and they may wish they hadn\u2019t signed the BRT\u2019s now-infamous statement, but that doesn\u2019t change the fact that they did sign it and that by doing so they gave Weingarten and countless others the impression that corporations were the appropriate vehicle for their political aspirations.<\/p>\n

Ironically, one of the signatories of that document was a man named Brian Cornell, who was then the CEO of Target. Cornell retired from the CEO role earlier this year but remains the company\u2019s executive chair. Even more ironically, Cornell was hardly the first of Target\u2019s executives to play politics with the company\u2019s resources and reputation. As I have noted elsewhere, Target has a long history of getting involved in matters that are beyond its business purview. Indeed, Target has a well-earned reputation as a social-justice-compliant company\u2014which is probably why Weingarten is so upset that it has resisted her entreaties. The lesson here is that \u201cno good deed goes unpunished\u201d (no matter how broadly one defines the word \u201cgood\u201d). Once you decide to ride the social-justice wave, it can be nigh on impossible to bail on that wave before wiping out. The folks at Target are undoubtedly learning this lesson the hard way.<\/p>\n

The nation\u2019s teachers are learning that lesson the hard way as well, whether they realize it or not. They are part-owners of the company that Weingarten and the AFT are trying to damage over politics. Indeed, it\u2019s almost certainly the case that Weingarten herself is a part-owner of Target and, as such, is damaging her own pension returns. Of course, the catch here is that as an individual shareholder, Weingarten is free to make her own investment decision for whatever reasons she sees fit. As the president of a teachers\u2019 union, however, she has certain obligations. She is not legally a fiduciary steward of her constituents\u2019 pension funds, but she does have tremendous influence over those who are fiduciaries. The AFT\u2019s Trustee Council openly concedes that it has more than 50 members on 27 different pension boards. Additionally, the union produces a variety of materials meant to influence fiduciaries on their responsibilities to union members and beneficiaries. Randi Weingarten\u2019s hands may be legally clean, but her house is a mess. She\u2019s harnessed the power of her union and of teachers more generally to fight against a company of which they are all part-owners. That is the very definition of self-defeating.<\/p>\n

In the end, this is what happens when people forget\u2014or ignore\u2014the nature of capital markets and publicly traded corporations. No one, it seems\u2014not the AFT, not the BRT, not the massive asset management firms that control more than $25 trillion in other people\u2019s money\u2014thinks of corporations as what they really are: the collected savings of tens of millions of ordinary people. They think of corporations as the means to their ends, not the ends of their true owners.<\/p>\n

Read more The Cowardice of Dobbs<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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