SEIU demanded economic reforms following the 2008 financial collapse. The union protested large Wall Street bonuses paid after taxpayer bailouts. SEIU advocated for policies benefiting working families, including healthcare reform and the Employee Free Choice Act. The union also called for regulation of the private equity industry, citing job losses and debt loads imposed on acquired companies.

1. CHAPTER 30
SEIU Demands Economic Reforms
Need More Jobs, Fewer Bonuses In Aftermath Of 2008 Collapse
L loyd Blankfein, the CEO of Goldman Sachs, pocketed his
bonus of $9 million for 2009 with the typical arrogance of
a Wall Street “Master of the Universe.”
union emerged as a powerful voice on global economic issues.
SEIU members frequently took to the streets in a wide range
of protests and demonstrations—in front of Goldman Sachs
e Goldman Sachs bonus pool of more than $16 billion o ces in Washington, D.C., at the American Bankers Associa-
meant the “average” employee would get a bonus of $500,000 tion convention in Chicago, at Bank of America locations in
and many top execs would get seven- and eight- gure bonuses Charlotte, North Carolina, and elsewhere.
(much of it in stock). e union’s broad opposition to Goldman Sachs and Bank
All this for a company that would have gone bankrupt of America was rooted in the inequities inherent in those busi-
had the hardworking taxpayers not bailed them out when the nesses (and many others) paying their executives huge bonuses
economy collapsed at the end of 2008. and stock options after their own recklessness had plunged the
Further proof of Wall Street’s insensitivity came when economy into the worst downturn since the Great Depression.
Blankfein told the press that he’s just a banker “doing At the same time, rms such as Goldman Sachs and Bank of
God’s work.” America had survived by bene ting from huge taxpayer bail-
Few Americans, and particularly the millions who were outs and then launched vigorous lobbying campaigns against
jobless, believed the titans of nance whose greed helped bring nancial reforms aimed at preventing future collapses.
on the economic collapse deserved their bonuses and self-righ- And the Wall Street banks and hedge funds also began
teousness. Instead, the overpaid Wall Street bankers symbol- lobbying hard against other SEIU-backed legislation, such as
ized how wide the gap between the very rich and regular work- healthcare reform and labor law improvements through the
ing families had become at the end of the 21st century’s rst Employee Free Choice Act.
decade. Incredibly, the top six banks paid their executives and At a taxpayer mobilization against Goldman Sachs in No-
sta $140.5 billion in bonuses and compensation in 2009—an vember 2009, SEIU President Andy Stern told the crowd the
amount that was almost enough to cover every state govern- nancial behemoth, which had just set aside billions to pay bo-
ment de cit for scal year 2010. nuses for its executives, was “out to lunch and out of touch.”
SEIU ramped up its role as a progressive advocate for With one American losing a home to foreclosure every
working families long before the nancial meltdown that nearly 13 seconds at that point in time, Stern called upon Goldman
collapsed the economy at the end of 2008. e union warned Sachs to place its bonus money in a fund to help undo some
against the dangers posed by Wall Street greed, including pri- of the damage its nancial practices had caused. e bonuses
vate equity rms piling huge debts on companies they had “could prevent every single foreclosure in America in 2010,” he
acquired. And following the onset of the nancial crisis, the told workers at the protest.

2. 226 STRONGER TOGETHER: THE STORY OF SEIU
old. With o cial unemployment surging above 10 percent and
the real jobless rate more like 17 percent, SEIU gave voice to
the concerns of those who felt a rising populist anger over huge
nancial institutions that were “too big to fail” and that seemed
to know no shame in heaping rewards upon themselves.
SEIU members during this period participated in pen-
sion funds with more than $1 trillion in assets, some of that
lost to the greed and speculation of the real estate bubble with
its predatory loans and to the broader collapse of 2008-2009.
Stern, who chaired the SEIU Master Trust, which had about
$1.3 billion in assets, wrote to the boards of directors of 29
major companies in the Trust’s investment portfolio demand-
ing a stop to unmerited executive payouts. He also called for
an overhaul of executive compensation practices to better align
them with corporate performance.
“It’s as if these guys got a windfall payo for betting the
family’s savings on the wrong horse,” Stern said in April 2009.
In 2008, when the economy faltered, Goldman Sachs re- “A fundamental duty to shareholders has been violated, and we
ceived $64.6 billion in bailout funds from U.S. taxpayers and, expect immediate action…to put a stop to these unmerited ex-
despite its problems, turned a $2.3 billion pro t. But the Wall ecutive payouts.” From 2005 through 2008, the top ve most
Street rm paid executives $4.8 billion in bonuses. CEO Lloyd highly paid executives at the 29 nancial services rms targeted
Blankfein got $42.9 million that year, far more than the $6.93 by SEIU received a total of more than $3.5 billion in cash and
an hour received by workers at Burger King (partially owned equity pay, and more than $1.5 billion in stock options. ose
by Goldman Sachs). companies included Goldman Sachs, American Express, AIG,
“America is not living up to its promise when one of the JPMorgan Chase & Co., and Citigroup.
architects of the economic crisis gets paid millions in bonuses At the time, AIG—the American International Group—
for his failures, while workers take home wages barely above had received a huge taxpayer bailout: more than $173 billion.
the poverty level,” Stern said. He called for passage of the Em- More than $90 billion of that went toward paying banks,
ployee Free Choice Act as an important step toward restrain- including Bank of America and Citigroup, that were part of
ing the huge disparity between those at the top and work- the huge lobbying e ort against legislation that would bene t
ing Americans. working families, such as the Employee Free Choice Act.
Anger at Wall Street’s excesses remained very high in this Citigroup, which got $341.1 billion in taxpayer bailouts,
period among diverse elements of the public and crossed many hosted a conference call to build opposition to employee free
of the normal fault lines of Democrats and Republicans, blue- choice and invited a top o cial of the anti-worker U.S. Cham-
collar and white-collar Americans, rural and urban, young and ber of Commerce to lead the call on March 11, 2009.

3. SEIU DEMANDS ECONOMIC REFORMS 227
When Citigroup bankers and others in the American ic chaos, funnel money from families and small businesses into
Banking Association held their convention in Chicago in late their own pockets, then leave all of us to clean up their mess.
2009, SEIU Secretary-Treasurer Anna Burger led thousands of “And not only do they get away with it, they pay them-
workers and taxpayers in protest. Writing on e Hu ngton selves billion-dollar bonuses and throw lavish parties to cel-
Post blog, Burger called the bankers’ meeting “a four-day cel- ebrate their conquest,” Burger continued. “But this isn’t a
ebration of wealth and opulence. movie. It’s really happening. Wall Street bankers have taken
“ e nancial section of the newspaper is starting to read $17.8 trillion of our tax dollars through bailouts and turned
like the script for a far-fetched crime movie,” Burger said. “A them into massive pay and bonuses for themselves.”196
group of villains hatch a plot to steal trillions of dollars from e Chicago protest led by Burger and Tom Balano , an
unsuspecting Americans. ey drive the country into econom- SEIU vice president and long-time leader of Local 1, called
upon the big banks to stop lobbying against nancial reform
legislation that was pending in Congress.
President Obama recognized SEIU’s important role in ad-
vocating for pro-worker economic policies by naming Burger
to the President’s Economic Recovery Advisory Board.
S EIU’s prominent and outspoken role on behalf of econom-
ic fairness during the collapse of 2008-2009 grew in part
out of work the union had been doing to urge reforms to halt
abuses engineered by the multibillion-dollar “private equity”
buyout nanciers. ose rms invest in industrial and service
companies whose common stock then ceases to trade on public
stock exchanges.
e private equity buyout rms operate virtually free of
oversight and accountability, yet their decisions a ect large
numbers of American workers and communities. Unlike pub-
licly traded companies that are subject to federal securities laws
and regulations, private equity rms often legally can keep their
practices and pro ts largely hidden from public view. In addi-
tion, private equity rms, which get substantial capital from
public employee pension funds, often pay very little in taxes.
eir business model thus undercuts government’s ability to
SEIU workers demanded that Congress pass nancial reforms that would stop
nance public services.
big banks, hedge funds, mortgage companies, and credit card rms among Major brand names in the United States, such as Burger
others from greedy and dangerous nancial practices like those that led to eco-
nomic collapse in 2008-2009. King, Dunkin’ Donuts, Hertz, Hilton Hotels, and Toys“R”Us,

4. 228 STRONGER TOGETHER: THE STORY OF SEIU
their portfolio companies would give private equity four
of the top 25 spots in the Fortune 500. ese private
equity rms have more annual revenue than companies
such as Bank of America, JPMorgan Chase, and Berkshire
Hathaway.
that employ nearly 4 million workers.
Change to Win Chair Anna Burger, SEIU President Andy Stern, and AFL-
E ven in a slow economy, the private equity partnerships
receive hefty fees and the top executives get lavish salaries,
perks, and other riches. Many leading partners at private eq-
CIO President Richard Trumka joined the Rev. Jesse Jackson at a protest dur-
ing the American Bankers Association meeting in Chicago in 2009. uity rms are billionaires at a time when inequality has widened
to historic levels.
have been taken over by corporate buyout rms. SEIU’s con- Stern, Burger, Mary Kay Henry, and other SEIU leaders
cerns heightened when one of the nation’s hospital chains was repeatedly raised the wealth gap issue in the debate over the
involved in a private equity buyout. And a leading multiservice need for much tighter regulation of the nancial sector gen-
company SEIU had been organizing, Aramark, was acquired by erally and private equity in particular. ey found a strange
private equity, as was the nation’s largest o ce building land- bedfellow seeming to agree with them in Alan Greenspan, the
lord, Equity O ce Properties. former Federal Reserve chairman, who warned that growing
e union estimated that, of the $1 trillion in assets held inequality “is not the type of thing which a democratic society
in trust by pension funds of SEIU members, about 5 percent to can really accept without addressing.”198
10 percent of those assets are invested in private equity. While millions of Americans are unemployed or working
Often, union experts say, corporate buyout deals end up harder for less money and eroding bene ts, the top 300,000
costing workers their jobs as the new ownership borrows to Americans enjoyed almost as much income as the bottom 150
the hilt and then cuts costs in order to manage the payments million Americans combined.199 SEIU, in a publication titled
on the debt and maximize its pro ts. Business Week noted, for Behind the Buyouts, argued in 2007 that “there is no doubt the
example, that “buyout shops have always been associated with income being accumulated in the buyout business is a major
job losses.”197 contributor to the concentration of wealth among the top one
If workers su er from the decisions made by private equity percent of Americans.”
executives, the rms engaging in the deals do extremely well. Stern widened the debate over the economic unfairness of
Consider these facts: current policy when he joined union leaders from UNI Global
- Union; Unite, the British union; and the Trade Union Advi-
er than the annual budgets of all but 16 of the world’s sory Committee to the Organization for Economic Coopera-
largest nations.

5. SEIU DEMANDS ECONOMIC REFORMS 229
tion and Development (OECD) in a global teleconference in state actors, like labor unions, must work together toward a
early 2009. system where competition is based on the quality and sustain-
“Financial manipulation, greed, and deregulation have led ability of goods and services provided—rather than a race to
to economic havoc,” Stern said. “For our global economy to lower costs at the expense of workers, the environment, and
thrive and grow again, corporations, governments, and non- product quality.”
SEIU’s Principles For e Private Equity Industry
As the threat of private equity buyouts expanded, portunities that align the long-term interests of
SEIU’s private equity campaign, coordinated by Stephen everyone who builds the value of a company—
Lerner, developed a set of principles for the industry: from direct employees and contract workers to
senior management.
1. e buyout industry should play by the same set
Workers should have paychecks that can support
of rules as everyone else.
a family.
e industry should provide transparency and dis-
Workers should have quality, a ordable healthcare
closure about their businesses, their deals, their in-
coverage.
come, their plans for the companies they buy and
Workers should have secure retirement bene ts.
sell, and the risks of the debt they load onto portfo-
Workers should have a voice at work—meaning
lio companies.
the freedom to join a union using majority sign-up
e industry should invest in the health, security,
without interference from any party.
and long-term prosperity of America by supporting
equitable tax rates and the elimination of loopholes 3. Community stakeholders should have a voice in
that increase the tax burden on working Americans. the deals and bene t from their outcomes.
e industry should work to build con dence in Buyout rms should play a proactive and construc-
the securities markets by eliminating con icts of tive role in the communities a ected by their deals.
interest and other potential abuses in their deals. Community stakeholders should be involved as
deals are being made.
2. Workers should have a voice in the deals and
e private equity buyout industry and community
bene t from their outcomes.
stakeholders should use wealth generated by deals
Workers should have a seat at the table when deals
to improve the quality of life, the environment,
are being made.
the health, the safety, and the long-term stability
Private equity deals should create economic op-
of communities.

6. 230 STRONGER TOGETHER: THE STORY OF SEIU
SEIU demanded a range of reforms: income of two-thirds due to an 80 percent increase in total
- interest payments.
out portfolio company. e Hertz workers su ered from the deal when the private
equity owners launched a new “productivity and e ciency”
portfolio companies.200 initiative in early 2007. Hertz announced the elimination of
- 1,550 jobs and later said that only one of every two departing
vent future leverage-fueled crises from undermining the workers would be replaced.
global economy. With Carlyle entering the nursing home business via its
- purchase of ManorCare, SEIU raised questions about the pri-
forms, oversight, and protections. vate equity rm’s record in its earlier deals.
“Big buyout rms like the Carlyle Group and others
should be held accountable for the impact of their actions on
private equity. seniors, taxpayers, and workers,” said Gerry Hudson, SEIU ex-
ecutive vice president. “When Carlyle and other private equity
G20 countries, the major industrial nations of the world. giants buy out nursing homes, they become the owners and,
as such, are directly responsible for what happens to patients.”
Large private investment groups had bought out 6 of
O ne example highlighted by SEIU in its broad public
campaign for regulation of private equity and the nan-
cial sector was the case of Hertz, the rental car company. A
the nation’s 10 largest nursing home chains, containing more
than 141,000 beds, or 9 percent of the total number of nurs-
consortium headed by the Carlyle Group bought Hertz from ing homes in the nation, according to e New York Times.
Ford Motor Company in the fall of 2006. ey argued that Private investment groups owned at least another 60,000
since private equity rms are not under public scrutiny, they beds at smaller chains and were expected to acquire many
can focus on long-term business growth. more companies.202
But Carlyle and its partners borrowed against the Hertz “ e rst thing owners do is lay o nurses and other sta
rental eet, jeopardizing the company’s credit rating and caus- that are essential to keeping patients safe,” said Charlene Har-
ing a downgrade of Hertz bonds to junk status. e private rington, a professor at the University of California in San Fran-
equity owners also had Hertz take out $1 billion in loans just cisco, who studies nursing homes. She told Charles Duhigg
six months after the purchase of Hertz was nalized in order to of e New York Times: “Chains have made a lot of money by
pay Carlyle and its partners a special dividend.201 cutting nurses, but it’s at the cost of human lives.”203
en they took the company public again and used that SEIU’s work on private equity in 2007 and 2008 situated
money to pay o the loan and, with the money left over, they the union to deal with buyouts that could impact members,
had Hertz pay them yet another special dividend: this time such as those at ManorCare, Aramark, and Allied Security. It
of $200 million. All the increased debt piled on by Carlyle also empowered the union to speak for a far broader group of
and its partners meant that even though Hertz increased rev- American workers when the economic collapse occurred in
enues by 8 percent in 2006, the rm su ered a decline in net late 2008.

7. SEIU DEMANDS ECONOMIC REFORMS 231
As Bank of America and Goldman Sachs and other su- well as in mainstream media such as e Wall Street Journal and
per-wealthy nancial rms expanded their gluttony during on television.
troubled times and lobbied hard against healthcare and labor From a small union of at janitors in Chicago had come
law reform, SEIU workers were in the streets week after week. more than two million members ghting for a more fair econ-
And they also campaigned on Twitter, Facebook, and Flickr as omy with great spirit at a time of bleak recession.