- A private equity firm bought and bankrupted Shopko, a popular retail chain store.
- I was one of thousands of Shopko employees who faced the wrath of Wall Street flippancy.
- If Democrats don’t stand up to these big banks, this behavior will continue to cost regular people their jobs.
- Kristi Lynn Van Bucken was an employee at Shopko for 14 years.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Business Insider’s homepage for more stories.
The November election will determine whether our economy for the next four years will benefit working people like me or continue to enrich Wall Street millionaires.
We already know what four more years of a Trump presidency and Republican agenda will mean: more deregulation and tax breaks for the wealthy, which only make it harder for working families like mine to put food on the table.
So I was eager to hear from Joe Biden and his campaign when the Democratic National Convention came to my home state of Wisconsin last month. Hearing Democrats talk about building a fair economy for all, including for essential workers like myself, was a stark contrast to what we’ve seen and heard from President Trump and his fellow Republicans. But while the Biden campaign introduced a number of platforms to put working people first, it became clear to me that there are not yet enough concrete and permanent solutions to fight back against Wall Street’s rampant greed, which is only growing during this pandemic.
Democrats, be a party that actually stands up to Wall Street.
During the Trump Administration, I was one of thousands of Shopko employees throughout the Midwest who were left unemployed, uninsured and struggling to make ends meet when Shopko was purchased by a private equity firm and bankrupted last year.
As the New York Times revealed , wealthy investors like Carl Icahn are exploiting the coronavirus crisis to literally make money off of the demise of people’s jobs and livelihoods. They’re calling it the “Big Short 2.0.” Instead of betting on the housing crash, as they did in 2008, Wall Street executives are betting on the demise of malls.
It’s clear Republicans will give a pass to the Big Short 2.0. The ball is now in the Democratic Party’s court to demonstrate that it will chart a different course.
However, Democrats must go beyond lip service, and offer real solutions and policies that will rein in Wall Street. Unfortunately, that was all but missing in last month’s convention.
And yet, in the Democratic party’s national 2020 policy platform, Wall Street was mentioned just four times — including once in the table of contents. There is not a single mention of the pain that private equity firms inflict on our communities, as Sun Capital did with Shopko in Wisconsin, or a plan to relieve that pain and rein these firms in. The Wall Street Journal even noted corporate America’s “sigh of relief” when Senator Kamala Harris was added to the Democratic presidential ticket.
The demise of Shopko, where I worked and found community for 14 years, is a classic example of why Wall Street is the enemy of working people.
For more than a decade, Shopko offered me and my coworkers not just a paycheck, but a family. We were proud to work at a company that was founded in Green Bay and served Wisconsin families.
But when Sun Capital Partners, a Florida-headquartered private equity firm, bought out Shopko in 2005, that community and my financial security were ripped away. No matter how successfully we ran the business, Sun Capital’s apparent intention was not growth but profit, and they made that profit by ruining people’s lives.
Over the next decade, Sun Capital executives drowned Shopko in nearly $1 billion in debt. They pushed the store into bankruptcy, leaving more than 14,000 employees desperately searching for a lifeline. Even during Shopko’s liquidation, Sun Capital executives continued to collect: In total, Shopko executives paid themselves nearly $67 million in dividends and fees. My coworkers and I were offered nothing.
When Sun Capital finally shuttered Shopko’s doors, they also broke commitments to Shopko workers by failing to distribute once-promised severance payments, leaving many in utter financial distress. Sun Capital pulled the same move on the state of Wisconsin, when it skipped out on $8 million in sales tax payments.
Astonishingly, Sun Capital isn’t the only culprit in destroying the lives of working families and crippling our economy. Since 2009, private equity firms have destroyed over 1.3 million jobs by bankrupting retail companies and stripping them for parts. Many of the brands you used to shop at — from Toys ‘R’ Us, to Payless ShoeSource, Sears, and ArtVan — were destroyed the same way. In nearly all cases, workers were left with nothing.
Even our hospitals and nursing homes are being taken over by Wall Street, leading to major staffing cuts and unsafe conditions during the ongoing COVID-19 pandemic.
As the Big Short 2.0 shows, action is urgently required, and that’s why former retail employees have come together with United for Respect, a multiracial national nonprofit organization fighting for bold policy changes that improve the lives of people who work in retail, to fight for and win severance pay and demand legislators establish common sense rules for private equity firms.
Without a specific plan to combat Wall Street’s excesses and greed, the Democrats’ vision for a just and fair economic recovery — and their outreach to working people like me in this election — needs improvement. They can start by adopting the Stop Wall Street Looting Act (SWSLA) in their party platform, which was introduced by Sen. Elizabeth Warren and Rep. Mark Pocan last year, and would rein in the most harmful private equity tactics.
SWSLA would accomplish this by ending Wall Street’s immunity from the debts, legal liabilities, and legal violations they pile on companies after they buy them out and gut them. SWSLA would also end the federal tax benefits for private equity firms which encourage their excessive use of leveraged buyouts. And in the event of company bankruptcy, like what we experienced at Shopko, SWSLA would ensure that private equity firms like Sun Capital Partners cannot just cut and run on their paycheck, severance, and pension obligations to employees.
It bears repeating: Democrats, be a party that actually stands up to Wall Street, and offer concrete and permanent solutions to fight back against Wall Street greed, because the strongest economic recovery — one that provides paid family leave, affordable health care and financial security — will be the one led by working people, not Wall Street.
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