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Beware of the union label

January 3, 2003 | Page 2

MORGAN STANLEY, the big Wall Street investment bank, has some advice for investors: Workers' rights are bad for business.

Late last year, Morgan Stanley told clients to pull their money out of heavily unionized industries. "Look for the union label--and run the other way," analysts said in a research note circulated November 14.

Why? Union companies are more likely to provide health care and retirement benefits to their workers. And that cuts into profits. The memo described pension plans as "toxic" for shareholders.

In an angry letter to Morgan Stanley, AFL-CIO President John Sweeney listed a few companies that used to be Wall Street favorites--Enron, WorldCom and Tyco. All fervently anti-union and anti-worker. And all gone.

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