***Livestream starting at 11:30AM ET at facebook.com/unitedforrespect***
RETAIL WORKERS JOIN SENATORS, MEMBERS OF CONGRESS TO ANNOUNCE BILL TO STOP JOB-DESTROYING PRIVATE EQUITY
They were devoted employees of Toys ‘R’ Us, Sears, Kmart, Shopko, and Payless; now they are leaders of a movement to protect jobs and the economy from Wall Street profiteers
More to come, as workers and their allies take to the streets, the Halls of Congress, and further press briefings
Washington, D.C. — Today, 42 leaders of a growing movement to hold predatory Wall Street firms accountable for the damage they inflict to the American economy stood next to Senators and Members of Congress as they introduced The Stop Wall Street Looting Act. Those movement leaders, who have come together with the organization United for Respect, are all laid-off employees of retailers that were destroyed when private equity firms bought the companies they worked for and systematically stripped them of value.
Madelyn Garcia, a United for Respect leader who spent her entire career with Toys ‘R’ Us and was a store manager in Boynton, Beach, Florida when her store was shuttered, said, “I put 30 years of my life into Toys ‘R’ Us and built my store into a beloved part of my community. Wall Street profiteers threw that love and value away when they bled Toys ‘R’ Us dry for profit. If we hadn’t spoken out, they would have left tens of thousands of us on the street without the severance and respect we had earned. This bill is about giving working people a better chance to stand up to billionaire predators and fight for our jobs, our livelihoods, and our dignity. This bill is what standing up for working people looks like.”
Hundreds of thousands of retail workers have lost their jobs — and some of America’s most storied retail brands have disappeared — because of the actions of private equity firms. Ten of the 14 largest retail bankruptcies since 2012 have been at chains that were acquired by private equity.
However the retail sector is not the only one suffering under unfettered private equity profiteering. Hospitals, newspapers, manufactured and affordable housing, talent agencies, and nursing homes and home healthcare are all reeling because of the private equity industry’s demonstrated tendency to focus on wealth extraction rather than building and improving the businesses it acquires. The Stop Wall Street Looting Act is the first major initiative in Washington to limit the havoc being unleashed on working communities across the country by private Wall Street firms.
The Stop Wall Street Looting Act was introduced by United States Senator Elizabeth Warren (D-Mass.), Senator Tammy Baldwin (D-Wis.), Sherrod Brown (D-Ohio), Ranking Member of the Senate Banking Committee, and Representatives Mark Pocan (D-Wis.) and Pramila Jayapal (D-Wash.). Joining the lawmakers in introducing the legislation are Senator Kirsten Gillibrand (D-N.Y.), and Representatives Barbara Lee (D-Calif.), Ayanna Pressley (D-Mass.), Ro Khanna (D-Calif.), Jan Schakowsky (D-Ill.), Rashida Tlaib (D-Mich.), Jesús “Chuy” García (D-Ill.), and Raúl Grijalva (D-Ariz.).
Retail Workers Helped Bring this Bill into Existence
33,000 working people lost their livelihoods after beloved retailer Toys ‘R’ Us went bankrupt because of the massive amount of debt piled onto it by the private equity firms who acquired it in a leveraged buyout. Left without their livelihoods, healthcare, retirement security, and any severance pay, former Toys ‘R’ Us employees came together with United for Respect to organize across the country, winning an unprecedented severance fund with KKR and Bain Capital. Shortly after that, people who work at Sears/Kmart, concerned over nationwide store closures, joined their ranks to hold Sears’ owner Eddie Lampert accountable as the company faltered. Lampert and his own hedge fund, ESL, enriched themselves and their investors by selling off Sears’ most valuable brands and real estate, while making little investment in modernizing operations to stay competitive.
Because of the campaigning of the leaders of United for Respect, the world became aware that private equity was the main cause of the crisis in retail. Senator Elizabeth Warren has been meeting with stranded former employees organizing through United for Respect since 2018. Most recently, Senator Tammy Baldwin has stood with former employees of Midwestern retail institution Shopko, which shuttered its last stores last month after private equity firm Sun Capital looted the brand, acquired its real estate, and forced branches to rent stores back at inflated costs.
The damage to working communities done by private equity has been worse for groups who historically have held the least power: women and people of color, who make up a majority of the retail sector workforce and are the invisible majority of American labor. And workers aren’t the only ones hurt by Wall-Street-induced bankruptcies. Pension funds that invest in major companies and the people who depend on those funds for their own economic security have all lost out when those companies go under.
How Private Equity Firms Do Their Damage and How the Bill Curtails It
Private equity firms raise money from large institutional investors, including union and public pension funds, sometimes with misleading promises of high returns. They combine those funds their own cash and then often saddle their acquired companies with the debt, “forcing” the sale of assets like real estate and sub-brands, dumping retirement obligations, and cutting workers’ hours, benefits, and positions. Meanwhile, loopholes and tax and regulatory games allow private equity fund executives to avoid paying their fair share of taxes, as well as incentivizing their destructive behaviors. It is typically no surprise that those companies eventually go bankrupt. Workers are usually left with nothing, and suppliers and investors like pension funds suffer huge losses.
The Stop Wall Street Looting Act would limit the tools and incentives for financial predators to destroy American jobs for profit, protect pensions from reckless and deceptive fund managers, and provide more compensation for workers when their employer enters bankruptcy. It would also hold predatory, billionaire profiteers accountable for the damage they do to our communities by making them more liable for losses and allowing courts to go after their wealth if they destroy companies. Full text of bill can be found here.
Retail workers with United for Respect are partnering with Americans for Financial Reform and The Center for Popular Democracy to bring their stories and analysis to Washington and beyond.
More to come:
- Workers continued to rally after the press conference and were preparing to move to a new location;
- A press briefing on the Stop Wall Street Looting Act of 2019 is scheduled for 3:00pm ET today. A former Toys ‘R’ Us employee and member of United for Respect will be joined by experts and industry insiders from Americans for Financial Reform. Please RSVP to Kyra Sandovi ([email protected]). To join, dial (800) 230-1096 and ask for the “Private Equity Legislation” conference call.
- Retail workers will continue their campaign tomorrow with a series of lobby visits;
- More analysis and continued in-district visits will occur nationwide.
IF YOU WOULD LIKE TO SPEAK TO A FORMER EMPLOYEE OF TOYS ‘R’ US, SEARS/KMART, SHOPKO, PAYLESS, OR GYMBOREE ORGANIZING UNDER UNITED FOR RESPECT, WHETHER ON THE GROUND OR BY PHONE, PLEASE REACH OUT TO TAYLOR CAMPBELL OR JASON SCHWARTZ WITH UNITED FOR RESPECT.