They Broke the Workers to Pay the Bankers
While Wall Street cashed in, private equity left workers jobless and communities gutted. Toys R Us kids grew up to find their stores gone and parents out of work, all so Bain, KKR, and the Carlyle Group could get paid first. This is what it costs when bankers win.
“I used to see the same faces every morning, moms dropping off kids on their way to a shift, seniors looking for a place to keep busy. We built this store together. And then, one morning, it was just gone. We got a letter telling us our jobs were over. No warning, no goodbye. Just shut out.”
, Lynette, former Toys ‘R’ Us worker, 2018
The Work That Held Communities Together
Too often, the story of a “business failure” gets told as if numbers stumbled, as if buildings caved in on their own. But beneath every boarded-up storefront and shuttered factory are the hands and hearts that kept it all running, the clerks ringing out our birthdays, the bakers behind every lunchbox Twinkie, nurses holding the night at the brink. These were more than jobs, they were threads in the everyday fabric of American life.
In malls, on corner lots, and in industrial neighborhoods, names like Gymboree, Mervyn’s, and Hostess built little economies around them. Their workers sponsored Little League teams, paid union dues, put kids through college, and bought groceries at the same stores where they welcomed their neighbors. HCR ManorCare’s staff, thousands of them, cared for the nation’s grandmothers and grandfathers, paid out of modest checks, but rich in community trust. Losing these jobs was not just an individual blow; whole blocks felt the freeze.
“I took this job because I wanted stability, something I could depend on,” recalled Tomas, a Payless shoe clerk who had to break the news to his team that their store was closing for good. “They told us we were family. Turns out, we were just numbers in a ledger to someone far away.”
When these companies collapsed, they dragged entire communities into the hole left behind, empty aisles, deserted parking lots, rising desperation. Work, for so many, was the last anchor before the storm.
Debt Dealers and the Disappearing Paycheck
No wrecking ball swung through each city, but a quieter destruction swept over America: private equity, debt dealers in tailored suits, selling the promise of “smarter management” and “efficiencies.” In reality, what they delivered was a gutting.
Here’s the ugly arithmetic: When Bain Capital, KKR, and Vornado bought Toys ‘R’ Us in 2005, they loaded it down with $5 billion in new debt, siphoning off profits as interest payments. Eighty cents of every dollar the workers earned went, not into raises, or new stores, or diaper stations for shoppers, but straight to bankers. By 2018, 33,000 people were out on the sidewalk, no severance, no help.
Payless was hit just as hard. Golden Gate and Blum paid themselves fat dividends while swelling the debt. What followed was two rounds of bankruptcy and the loss of 16,000 jobs. At Mervyn’s, the new “owners” stripped away the real estate that kept the chain stable and doubled their rents, turning employees’ hard-won stability into another spreadsheet asset to be milked dry.
This wasn’t risk. It was extraction. Workers clocked in, but paychecks circled the drain, first to Wall Street, then to history. “They didn’t just close our stores,” said Carla, a former Gymboree manager. “They cashed us out.”
Broken Promises and Lost Pay on the Shop Floor
When companies shutter under the weight of debt, the people who built them too often bear the brunt. Hostess workers gave up pay and pensions for years, promised things would stabilize. But when Ripplewood’s deals fell through, the company liquidated, 18,500 people were left with nothing but headlines about “the end of Twinkies.”
At HCR ManorCare, the buyout’s first act was to sell the ground out from under its caregivers. Staff were told it was good business. In reality, it meant missed rent payments, cuts to care, and a spike in health violations, sick seniors and demoralized workers left scrambling in the name of “unlocked value.” The same story unfolded in the wards of Hahnemann Hospital, where a historic safety net was spooled into real estate speculation; over 2,500 jobs and tens of thousands of patients simply erased.
“This system turned my job caring for people into just another number game,” said Sherri, a ManorCare nurse laid off after years of whispered cutbacks. “Who’s supposed to look out for us, if not the company we built?”
Promises kept workers at the job. Empty promises sent them home, dreams foreclosed alongside their stores and clinics.
When the Walkout Is the Only Option Left
Every labor contract, every handshake, presumes a level playing field. But when private equity arrives, workers learn quickly the field has been tilted, the rules rewritten in invisible ink. Sometimes, the only answer left is to shut it down, to walk.
That is what happened at Hostess in 2012. After years of givebacks, a roll call of slashed benefits and frozen pay, bakers and drivers drew the line. When management, coached by distant financiers, demanded more, workers struck. Ownership called it the final straw, declared bankruptcy, and moved to liquidate. The headlines blamed unions for being “unreasonable.” Rarely did they mention the billions sucked out through debt deals, the “bonuses” paid to executives, the futures paid forward to bankers.
And when the dealmakers simply flee, like at Hahnemann, or when Mervyn’s folded overnight, often no one comes to negotiate at all. Workers are left not just jobless, but voiceless.
“They broke faith with us long before we walked out,” said James, a Hostess driver. “Sometimes standing up, standing together, is all you have left. But it shouldn’t be that way.”
Behind Paperwork: Who Signed Away the Jobs?
Look into bankruptcy filings and buyout documents, and a stark pattern emerges: business decisions made far from the factory floor, hands signing away jobs they’ll never see, for profits they’ll never share.
In the iHeartMedia buyout, over $10 billion in extra debt was stapled to the company in one fell swoop. The same pattern haunted Tribune’s newsroom, where a leveraged buyout choked off investment, sparking mass layoffs and a shattering bankruptcy that even the workers’ legal claims couldn’t fully undo.
Hostess’ collapse, Mervyn’s asset strip, and HCR ManorCare’s sell-off were not accidents. They were the result of real decisions, real signatures, real policy choices, engineered with care in boardrooms hedged by high-rises. Every job lost was an indirect transfer: from the sturdy hands that built our goods, to the briefcase class that floats above the dust.
As the old union banners used to read: “Which Side Are You On?” Policy, after all, is not neutral. The systems signed these futures away, and only pressure, organized and righteous, will force those signatures back into the sunlight.
This Isn’t the First Time They’ve Tried
History buffs know: this story goes back to the first factory closures, the first trusts and monopolies, the first Gilded Age. It happened when railroad barons squeezed workers until they struck for their lives, and when robber barons cornered cities for control. Private equity is just the latest costume for an old act, wealth above work, paper profits over people.
In the Great Depression, thousands watched jobs vanish not for lack of need, but for speculation gone sour. The 1980s brought a tide of leveraged buyouts and asset stripping: companies raided and gutted, communities left to pick up the pieces. Each time, organizers and workers, sometimes beaten, sometimes stubborn, always hopeful, fought to wrench dignity back from the hands that would take it.
“They call it creative destruction,” observed labor organizer and historian Ella Baker, “but it looks an awful lot like plain old destruction to me.”
That struggle, and that memory, should embolden us now. As before, the power is not in the papers shuffled on Wall Street, but in hands joined on Main Street.
What Real Justice for Lost Labor Would Mean
Real justice can’t be measured in bankruptcy filings, or the market price of a reacquired brand. It lives instead in the lives upended and rebuilt, in the communities refusing to disappear. Justice means severance paid, pensions honored, and clawbacks for the speculators who gutted the payroll.
It means new laws, ones with teeth, that keep would-be kings in check, that make mass layoffs and asset strips as legally risky as any street-level theft. It means empowering unions to take a seat at every table, to say enough is enough as soon as the paper-pushers show up with their “efficiencies.”
But justice also asks for more: that work itself be treated with the dignity it deserves, valued for the lives and neighborhoods it sustains, not as a number on a quarterly report, but as the core of what this country means when it talks about prosperity, pride, and the pursuit of happiness.
“Stand up, and speak out loud,” said Dolores, a laid-off Tribune copy editor, echoing an old union tune. “We kept this place alive long after the suits left town. We can build again, each other, if nothing else.”
The buildings may have emptied, the lights flickered out. But memory holds. The lesson, etched in every pay stub and pink slip, is clear: when profits are built upon broken promises and borrowed futures, it is the worker, and the community, who pay the cost. Until real accountability and respect for labor stand at the heart of our economy, not just at its fringes, the story will repeat. But so too will our resistance. We have survived every era of “creative destruction.” Now it is time to demand a future that cannot be sold off, pieced apart, or silently erased.
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