$ 20 million to Toys "R" Us workers

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It was not about being a happy Thanksgiving for 33,000 Toys "R" Us workers laid off this year. More than 700 sites have been closed across the country, leaving people without jobs and severance pay, although many have provided services to the company for several decades (and by extension to its shareholders) .

But today, an important announcement has been made: the creation of a $ 20 million fund to help families in difficulty. This should make holidays more joyful; But that does not solve the more general problem of a difficult retail environment, and the lack of respect for the well-being of workers, which is common in private equity firms. This interview with Carrie Gleason – Director of Policy for United Organization for Respect (OUR) and Campaign Manager for Rise Up Retail – explains why Wall Street takes our toys … and harms working families and communities . It concludes with practical suggestions on how results-oriented investors for workers can change their practices.

Q: What is OUR and how did you engage on this issue?

Jobs in the retail trade are now the most common jobs in America. But across the country, retailers suffer from low wages, unpredictable part-time hours, limited access to benefits and many other barriers to opportunities. This has been fueled by industry leaders and Wall Street energy brokers, who are more anxious to extract every last penny of profit than to invest and empower the hand. 39, the frontline work on which their business depends.

United Organization for Respect (OUR) is a growing network of people from the country's largest retail chains, who have come together to challenge the forces of business – from Wall Street to Main Street – that comprise families of workers who change little. We have made serious progress. At Walmart, the largest private employer in the country, NOS leaders have pushed the company to increase the wages of more than 1.5 million employees, extend paid holidays, and strengthen policies against discrimination related to pregnancy.

But high-risk financial investments have generated a massive financial crisis in the retail sector, destroying viable businesses and hundreds of thousands of jobs. When 33,000 families of Toys "R" Us discovered that the company they loved was closing their doors this year and that they would lose their jobs without a severance pay, they have immediately taken the lead.

For months, brave employees of Toys "R" Us have drawn attention to their desperate situation, vying for nearly $ 75 million in severance pay, activism, and more. one country to the other being steeped in an innovative model of organization "online to offline", which quickly mobilize a large number of people. Across the country, Toys "R" Us workers events organized at the closing of the stores, spoke publicly and called for responsibility.

Just this week, tens of thousands of Toys "R" Us employees made history by creating a Toys "R" Us financial assistance fund created by two of the company's former owners – KKR and Bain Capital . The agreement comes as part of the company's very close liquidation and the closure of more than 700 sites across the country, leaving thousands of employees, often with decades of service, without compensation. dismissal.

For months, former Toys 'R' Us employees and their allies – the United Organization for Respect (OUR) and its Rise Up Retail Campaign, as well as the Private Equity Stakeholder Project and the Center for Popular Democracy – have called for a fair treatment. The Fund is the first important step in ensuring that Toys "R" Us employees who have lost their livelihoods receive the promised and deserved support. And this is an unprecedented initiative to help thousands of families in financial difficulty due to retail closures and bankruptcies in the industry.

NOS and our partner organizations fought for a better retail sector – a sector in which working families can earn a living wage, be respected at work and receive fair treatment from mega-corporations where many have spent their entire career.

Q: Many consumers were left puzzled – what happened to Toys "R" Us?

The fall of Toys "R" Us, one of the most prominent retail brands in our country, is emblematic of the toxic forces of companies that take advantage of the destroyed retail companies to sell their remains.

KKR, Bain Capital and Vornado Realty Trust bought Toys "R" Us in a acquisition of $ 6.6 billion in 2005 take the private business. At that time, Toys "R" Us reported $ 11 billion in sales a year. But once acquired by its new owners, Toys "R" Us became responsible for repaying the massive debt accumulated by the new owners, who had borrowed 80% of the funds that they had used to buy the company. In the end, growing pressure from e-commerce, compounded by debt, forced the company into bankruptcy last year.

In March, the creditors of Toys "R" Us – a group of hedge funds including Solus Alternative Asset Management, Angelo, Gordon & Company, Franklin Templeton, Highland Capital Management and Oaktree Capital, among others – decided to liquidate the company, giving up several viable commercial offers that would have saved hundreds of stores and thousands of jobs.

More than 33,000 former Toys "R" Us employees – many of them with decades of service to the company – laid off without any means to support their families. In the course of its history, Toys "R" Us paid severance pay following the dismissal of an employee. Many of those who lost their jobs this year relied on severance pay, estimated at more than $ 75 million, to ease the financial difficulties they face.

KKR and Bain have created a $ 20 million financial assistance fund to provide affected families with essential support. However, many creditors and former owners of the company, including Vornado, Angelo Gordon and Solus Alternative Asset Management, still refuse to contribute to this fund, which will help tens of thousands of people in need.

Q: What investors could have done differently? What is their responsibility vis-à-vis the PE companies themselves?

More than anything, investors in retail businesses and Wall Street businesses that exploit the industry need to be aware of what these companies are doing and hold them responsible for their bad behavior. Investors have incredible power to drive change, but it's essential that they use that power for good.

Leaders with Rise Up Retail have pushed key investors in these companies to do exactly that. Thanks to our efforts, pension funds across the country – including Minnesota, Washington and New York – are expressing concern and support to the Toys "R" Us families.

Q: Who are these investors anyway? At the retail level? Pension funds? Etc?

What may surprise people is how much these Wall Street predatory businesses are embedded in the circles of power that influence our lives. Many state and municipal pension funds are heavily invested in private equity firms and hedge funds that bothered Toys "R" Us with unmanageable debt and forced the company to liquidation. Elected officials also have links to these companies – reports from last month showed that Outgoing Florida governor Rick Scott has invested millions of dollars in Angelo Gordon's funds., including those who benefited from the destruction and widespread financial difficulties in Puerto Rico after Hurricane Maria.

These investors not only have the power to demand greater accountability from Wall Street, but they also have the responsibility to the voters and the communities they serve to do things right. The massive job losses we are seeing are disproportionately affecting women who work in the front line. The fallout from bankruptcies and store closures in retail has created a "rust belt" for retail trade, fueling the erosion of key tax bases and harming the country's vulnerable local economies.

Q: Toys "R" Us is a visible case, but it clearly reflects the general trends of the industry. What are the other cases?

The collapse of Toys "R" Us at the expense of the workers is only part of a larger picture.

Private equity buybacks such as Toys "R" Us have already accounted for 61% of the 219,000 retail jobs lost in 2016 and 2017. In the grocery sector alone, seven major retail chains employing more than 125,000 people were looted and bankrupted by private equity owners.

What is equally disturbing is that the massive wealth extraction of major US employers reveals a huge gap in worker protection: the financial practices used by Wall Street that jeopardize US jobs are actually quite legal.

In the last few months alone, we have witnessed the fall of Sears, which has filed for bankruptcy after more than a decade of ownership by ESL Investments, a hedge fund. While Sears CEO Eddie Lampert was withdrawing hundreds of millions of dollars from his personal bank account, ESL has stripping Sears assets in recent years, spin-off of real estate owned by the company and several brands. More than 200,000 Sears and Kmart workers Eddie Lampert and ESL Financial Engineering ended the job over the years. Tens of thousands of current Sears employees are facing layoffs, the company closing more than one hundred stores.

But it's not just about private equity firms selling their workforce quickly and cheaply. Although hundreds of thousands of Walmart part-time employees still can not make a living, the company has deployed billions of dollars to buy back its own shares.

Q: For investors who care about the well-being of workers, how can they help reverse this trend?

Many investors, including large pension funds and others, have already put in place strong environmental, governance and governance (ESG) policies and practices that ensure their investments are not only sustainable, but also reduce the risks in favor of higher returns. Investors can ensure that their investment managers are held accountable for these ESG standards and should be prepared to put an end to their investments with managers if they do not respond appropriately to ESG concerns.

To learn more about investing with impact, see Morgan's book.

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It was not about being a happy Thanksgiving for 33,000 Toys "R" Us workers laid off this year. More than 700 sites have been closed across the country, leaving people without jobs and severance pay, although many have provided services to the company for several decades (and by extension to its shareholders) .

But today, an important announcement has been made: the creation of a $ 20 million fund to help families in difficulty. This should make holidays more joyful; But that does not solve the more general problem of a difficult retail environment, and the lack of respect for the well-being of workers, which is common in private equity firms. This interview with Carrie Gleason – Director of Policy for United Organization for Respect (OUR) and Campaign Manager for Rise Up Retail – explains why Wall Street takes our toys … and harms working families and communities . It concludes with practical suggestions on how results-oriented investors for workers can change their practices.

Q: What is OUR and how did you engage on this issue?

Jobs in the retail trade are now the most common jobs in America. But across the country, retailers suffer from low wages, unpredictable part-time hours, limited access to benefits and many other barriers to opportunities. This has been fueled by industry leaders and Wall Street energy brokers, who are more anxious to extract every last penny of profit than to invest and empower the hand. 39, the frontline work on which their business depends.

United Organization for Respect (OUR) is a growing network of people from the country's largest retail chains, who have come together to challenge the forces of business – from Wall Street to Main Street – that comprise families of workers who change little. We have made serious progress. At Walmart, the largest private employer in the country, NOS leaders have pushed the company to increase the wages of more than 1.5 million employees, extend paid holidays, and strengthen policies against discrimination related to pregnancy.

But high-risk financial investments have generated a massive financial crisis in the retail sector, destroying viable businesses and hundreds of thousands of jobs. When 33,000 families of Toys "R" Us discovered that the company they loved was closing their doors this year and that they would lose their jobs without a severance pay, they have immediately taken the lead.

For months, brave employees of Toys "R" Us have drawn attention to their desperate situation, vying for nearly $ 75 million in severance pay, activism, and more. one country to the other being steeped in an innovative model of organization "online to offline", which quickly mobilize a large number of people. Across the country, Toys "R" Us workers events organized at the closing of the stores, spoke publicly and called for responsibility.

Just this week, tens of thousands of Toys "R" Us employees made history by creating a Toys "R" Us financial assistance fund created by two of the company's former owners – KKR and Bain Capital . The agreement comes as part of the company's very close liquidation and the closure of more than 700 sites across the country, leaving thousands of employees, often with decades of service, without compensation. dismissal.

For months, former Toys 'R' Us employees and their allies – the United Organization for Respect (OUR) and its Rise Up Retail Campaign, as well as the Private Equity Stakeholder Project and the Center for Popular Democracy – have called for a fair treatment. The Fund is the first important step in ensuring that Toys "R" Us employees who have lost their livelihoods receive the promised and deserved support. And this is an unprecedented initiative to help thousands of families in financial difficulty due to retail closures and bankruptcies in the industry.

NOS and our partner organizations fought for a better retail sector – a sector in which working families can earn a living wage, be respected at work and receive fair treatment from mega-corporations where many have spent their entire career.

Q: Many consumers were left puzzled – what happened to Toys "R" Us?

The fall of Toys "R" Us, one of the most prominent retail brands in our country, is emblematic of the toxic forces of companies that take advantage of the destroyed retail companies to sell their remains.

KKR, Bain Capital and Vornado Realty Trust bought Toys "R" Us in a acquisition of $ 6.6 billion in 2005 take the private business. At that time, Toys "R" Us reported $ 11 billion in sales a year. But once acquired by its new owners, Toys "R" Us became responsible for repaying the massive debt accumulated by the new owners, who had borrowed 80% of the funds that they had used to buy the company. In the end, growing pressure from e-commerce, compounded by debt, forced the company into bankruptcy last year.

In March, the creditors of Toys "R" Us – a group of hedge funds including Solus Alternative Asset Management, Angelo, Gordon & Company, Franklin Templeton, Highland Capital Management and Oaktree Capital, among others – decided to liquidate the company, giving up several viable commercial offers that would have saved hundreds of stores and thousands of jobs.

More than 33,000 former Toys "R" Us employees – many of them with decades of service to the company – laid off without any means to support their families. In the course of its history, Toys "R" Us paid severance pay following the dismissal of an employee. Many of those who lost their jobs this year relied on severance pay, estimated at more than $ 75 million, to ease the financial difficulties they face.

KKR and Bain have created a $ 20 million financial assistance fund to provide affected families with essential support. However, many creditors and former owners of the company, including Vornado, Angelo Gordon and Solus Alternative Asset Management, still refuse to contribute to this fund, which will help tens of thousands of people in need.

Q: What investors could have done differently? What is their responsibility vis-à-vis the PE companies themselves?

More than anything, investors in retail businesses and Wall Street businesses that exploit the industry need to be aware of what these companies are doing and hold them responsible for their bad behavior. Investors have incredible power to drive change, but it's essential that they use that power for good.

Leaders with Rise Up Retail have pushed key investors in these companies to do exactly that. Thanks to our efforts, pension funds across the country – including Minnesota, Washington and New York – are expressing concern and support to the Toys "R" Us families.

Q: Who are these investors anyway? At the retail level? Pension funds? Etc?

What may surprise people is how much these Wall Street predatory businesses are embedded in the circles of power that influence our lives. Many state and municipal pension funds are heavily invested in private equity firms and hedge funds that bothered Toys "R" Us with unmanageable debt and forced the company to liquidation. Elected officials also have links to these companies – reports from last month showed that Outgoing Florida governor Rick Scott has invested millions of dollars in Angelo Gordon's funds., including those who benefited from the destruction and widespread financial difficulties in Puerto Rico after Hurricane Maria.

These investors not only have the power to demand greater accountability from Wall Street, but they also have the responsibility to the voters and the communities they serve to do things right. The massive job losses we are seeing are disproportionately affecting women who work in the front line. The fallout from bankruptcies and store closures in retail has created a "rust belt" for retail trade, fueling the erosion of key tax bases and harming the country's vulnerable local economies.

Q: Toys "R" Us is a visible case, but it clearly reflects the general trends of the industry. What are the other cases?

The collapse of Toys "R" Us at the expense of the workers is only part of a larger picture.

Private equity buybacks such as Toys "R" Us have already accounted for 61% of the 219,000 retail jobs lost in 2016 and 2017. In the grocery sector alone, seven major retail chains employing more than 125,000 people were looted and bankrupted by private equity owners.

What is equally disturbing is that the massive wealth extraction of major US employers reveals a huge gap in worker protection: the financial practices used by Wall Street that jeopardize US jobs are actually quite legal.

In recent months alone, we have witnessed the fall of Sears, which has filed for bankruptcy after more than a decade of ownership by ESL Investments, a hedge fund. While Sears CEO Eddie Lampert was withdrawing hundreds of millions of dollars from his personal bank account, ESL has stripping Sears assets in recent years, spin-off of real estate owned by the company and several brands. More than 200,000 Sears and Kmart workers Eddie Lampert and ESL Financial Engineering ended the job over the years. Tens of thousands of current Sears employees are facing layoffs, the company closing more than one hundred stores.

But it's not just about private equity firms selling their workforce quickly and cheaply. Although hundreds of thousands of Walmart part-time employees still can not make a living, the company has deployed billions of dollars to buy back its own shares.

Q: For investors who care about the well-being of workers, how can they help reverse this trend?

Many investors, including large pension funds and others, have already put in place strong environmental, governance and governance (ESG) policies and practices that ensure their investments are not only sustainable, but also reduce the risks in favor of higher returns. Investors can ensure that their investment managers are held accountable for these ESG standards and should be prepared to put an end to their investments with managers if they do not respond appropriately to ESG concerns.

To learn more about investing with impact, see Morgan's book.