The prison-to-pension pipeline 

The correlation between low student achievement, failing schools, and youth incarceration is clear, especially for black and Latino males in urban public schools.

"The school-to-prison pipeline is not some abstraction," says education activist Howard Eagle. "It's not something people are making up. The link is direct."

Eagle, a retired teacher for the Rochester City School District, recently found another disturbing link in a story reported by The New York State Teachers' Retirement System, the agency that manages the investment funds for the state's teacher pensions, has investments in privately-operated prisons.

Eagle questions whether this is ethical. Should educators profit from students who leave school with few marketable job skills, become involved in illegal activities such as drug dealing, and wind up in prison?

Adam Urbanski, president of the Rochester Teachers Association, says that he immediately contacted the NYSTRS after Eagle brought the information to his attention.

"Certainly neither teachers nor their unions are interested in investing in prisons," Urbanski says. "No teacher that I know of is in favor of supporting or building more prisons."

John Cardillo, spokesperson for NYSTRS, says that his organization has $7.1 million invested in the GEO Group and $10.7 million invested in Corrections Corporation of America. Both are privately-held companies that operate prisons and detention centers.

Cardillo says that the retirement system's investments are in the form of passively managed index funds.

Rather than trying to outwit the market by buying and selling individual stocks, the passive management approach assumes that investing in large index funds will reduce the risk of financial loss and lead to better returns.

Cardillo says that the investments in GEO and CCA represent a tiny portion of NYSTRS's $108 billion in assets. And given how many pension plans are under-funded, he says, it's worth noting that the NYSTRS is doing its job: NYSTRS is one of the most well-funded pension plans in the US, he says, which means that it has the assets to pay current retirees, as well as to protect the interests of future members.

Eagle questions why educators would have even a small investment in prisons.

"Hopefully, the community will respond in a way that is beyond criticism and demand that those funds be divested," he says.

But Cardillo says that he doesn't know when or if NYSTRS officials will address the concern. There are multiple schools of thought on pension plan investment strategies, he says. For instance, by divesting in a company, some employees could lose their jobs, he says, which can also adversely impact parents and their children.

And the ethics are subjective, Cardillo says. Some members of a pension plan may object to investing in prisons, he says, while others may object to investing in companies that manufacture weapons used in warfare.

Eagle says that's not a problem.

"I would say, 'Wonderful, add them to the list,'" he says.

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