More than 1.3 million retail workers lost their jobs at the hands of private equity firms over the past decade, according to a report published Wednesday by the non-profit organization United For Respect.
The report found that 597,000 total people lost their jobs at companies owned by private equity firms and hedge funds in the past decade, including brands like Sears, Toys R Us, and Shopko. Further, an estimated 728,000 workers experienced indirect job loss as a result of these cuts — when 100 jobs are directly eliminated, 122 indirect positions are subsequently cut, the findings showed.
“Wall Street executives exploit gaps in laws and regulations, and lucrative loopholes, to amass huge profits at the expense of working people and local communities,” the authors of the study wrote in their report.”These massive profits pay for luxurious lifestyles for fund managers and their families, while workers and their families and communities face real hardship.”
Of the 14 largest, high-profile bankruptcies since 2012, 10 occurred under the ownership of private equity firms, the report found, warning that 80 major retail companies are currently owned by private equity firms and at risk of imminent layoffs.
“Wall Street has become the new boss for an ever-growing number of workers across the country and that’s meant lay-offs, shrinking pay-checks, and benefit cuts for millions of people,” Charles Khan, organizing director of the Strong Economy For All Coalition, wrote in a statement. “Wall Street’s relentless pursuit of profits by any means necessary has been especially devastating in the retail industry, resulting in a frightening number of bankruptcies.”
In an effort to rein in Wall Street’s power over retail workers, last week a group of federal legislators that includes presidential hopeful Sen. Elizabeth Warren introduced the Stop Wall Street Looting Act of 2019. The policy is intended to restructure incentives for private equity companies and prevent them from profiting off bankruptcy and job loss.
“The truth is that Washington has it backwards,” Warren wrote in a Medium post about the proposed policy. “For a long time now, Wall Street’s success hasn’t helped the broader economy — it’s come at the expense of the rest of the economy. Wall Street is looting the economy and Washington is helping them do it.”
Source: Business Insider