Teachers & Hogs

By: Robert F. Abbott, author of Big Macs & Our Pensions: Who Gets McDonald's Profits? the book that explains the connection between the retirement income of the middle class and the profits of big business

Friday, February 14, 2014

 It's Valentine's Day, and we're celebrating unexpected relationships. Today, we focus on teachers in the province of Ontario (Canada) and the maker of hogs, Harley Davidson.

The 303,000 active and retired members of the Ontario Teachers' Pension Plan own a significant stake in Harley Davidson, 44,153 at the close of trading on December 31, 2013 (figures from nasdaq.com).

And ownership makes heart grow fonder today, because on Monday the stock goes ex-dividend. That means today is the last day in which an owner is eligible to receive the company's quarterly dividend. Each share will receive a 27 and a half cent payment (scheduled for March 7, 2014).

Assuming Ontario teachers still own 44,153 shares, we can multiply that number by $0.275 and see they will receive $12,142 for this quarter. Annualized, that's $12,142 x 4 quarters = $48,568.

According to nasdaq.com, about 83% of this company's shares are owned by institutional investors; think pension funds and mutual funds. 

The Bigger Picture:

Will Profits from Big Macs Add to Your Retirement Income?

In 1948, the McDonald brothers redesigned and remodelled their drive-in restaurant in San Bernardino, California. Taking inspiration from Henry Ford's assembly-line, they created the fast food revolution, with the quick service and low prices we now take for granted.

In that same year, the U.S. National Labor Relations Board ruled unions could include pension issues in contract negotiations. That ignited a massive expansion of pension plans.

In the 1950s, pension funds started buying stocks, rather than just bonds or their equivalents; in addition mutual funds came of age. With these two developments working, middle class people became owners of big business. At first, their stakes were modest, but steadily growing.

And in just a few decades, they gained controlling interests in many large corporations through their funds. Management guru Peter Drucker has called it, "...one of the most startling power shifts in economic history."

Now, working people reap the benefits of those investments, collecting much of the profit distributed by McDonald's and other big corporations.

Discover how the pieces fit together. In Big Macs & Our Pensions: Who Gets McDonald's Profits? - a new booklet -(about 25-pages), you will:

• learn more about the McDonald's transformation and its implications for the future
  
• find out how McDonald's makes its profits (and it involves more than selling Quarter Pounders)
  
• meet some of the working people who get McDonald's profits through their pension and mutual funds
  
• find out how low wages became embedded in the fast food industry
  
• hear accusations from critics of McDonald's wages, and
  
• learn who has the ultimate say on fast food wages (the answer may surprise you).

You may not be among the owners of McDonald's. But if you belong to any pension plan, or contribute to a mutual fund or whole life insurance policy, you likely own pieces of some big corporations.

More importantly, though, your retirement income will be bigger and grow more dependably than you would otherwise expect.

Big Macs & Our Pensions: Who Gets McDonald's Profits? is now available at Amazon.com