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2 July, 2007
Two trans-Atlantic unions that have plans to merge, the United Steelworkers (USW) of North America and Unite of the UK, launched a joint campaign on 21 June to highlight the negative role that private equity companies are having on the global economy. The two unions called on governments and world economic bodies to fairly regulate such capital entities.
The two unions, both ICEM affiliates, announced the joint campaign at the opening of merger talks in London.
"Our two unions will work closely together to lobby governments in Europe and North America to restrict the activities of corporate raiders, to protect the jobs and the pay conditions of working people,” stated Unite Joint General Secretary Derek Simpson.
“Private equity firms highlight the reason that we are exploring a merger with Unite,” added USW President Leo Gerard. “Global finance must be confronted by global labor.”
Unite’s other Joint General Secretary, Tony Woodley, said, “Private equity funds are the world’s largest source of cash, funded mostly by workers’ pensions, paying little or no tax. There’s something seriously wrong in any country where this happens.”
The unions seek transparency into the activities of private equity companies, and they seek a closure of tax loopholes that reward short-term manipulation at the expense of job creation and workers’ income.
It is estimated that workers’ pension funds now provide up to 25% of private equity capital. In 2006 alone, private equity funds raised a total of US$221 billion, up from US$33 billion ten years ago. To illustrate the harm that takeovers, buy-outs, and the inevitable restructurings bring, last year, a total amount of US$730 billion in leveraged deals was done. That compares to only $37 billion a short five years ago.
The tax paid by managers of such deals, who make sometimes tens of millions of dollars in a single deal, is sometimes less that tax paid by an ordinary worker.