Why Do So Many Private Equity-Owned Companies Pay Less Than $15 Per Hour?
The Fight for $15 began ten years ago with mass strikes by workers at McDonald’s and other fast-food companies in multiple cities across the U.S. Since then, the $15 minimum wage has gained an enormous amount of traction and has been taken up as the standard demand by workers in diverse industries including retail, home care, childcare, Uber drivers, airport employees, and even adjunct university faculty.
The movement has also racked up a number of impressive victories, and in 2022 a record number of states, cities, and counties will increase their minimum wage. According to the National Employment Law Project, by the end of the year, two states and 47 cites and counties will meet or exceed a $15 minimum wage.
In addition, at least 250 large employers have announced they will pay all workers $15 per hour or more, including Amazon, Best Buy, Costco, CVS, Starbucks, Target, and Walgreens. We could only identify one small private equity-owned company that made a similar commitment.[i]
Private equity firms own some of the largest low-wage employers in the U.S.
|Company||Private Equity Owner/Investor||# Employees||Position||Average Hourly Wage (Glassdoor.com)|
|Albertsons||Cerberus Capital||300,000||Courtesy Clerk||$10.79|
|Dunkin’ Donuts||Roark Capital||250,000||Crew Member||$11.91|
|Panera Bread||BDT Capital, JAB Holding Co||100,000||Cashier||$10.95|
|Arby’s||Roark Capital||80,000||Team Member||$10.94|
|Jimmy John’s||Roark Capital||79,000||Sandwich Artist||$10.28|
|Staples||Sycamore Partners||70,000||Sales Associate||$11.79|
|PetSmart||BC Partners||55,000||Pet Care Associate||$11.20|
|Michaels||Apollo Global Management||45,000||Cashier||$11.00|
|Whataburger||BDT Capital, JAB Holding Co.||36,000||Team Member||$10.83|
Roark Capital is one of the largest employers of low-wage workers. It’s Inspire Brands employs more than 650,000 people at franchises of Dunkin’ Donuts, Sonic, Arby’s, Jimmy John’s, Baskin Robbins, and Buffalo Wild Wings.
In March 2021, Roark Capital’s Inspire Brands sent employees and franchisees a report of its government lobbying activity. The report highlighted its success in helping to kill the federal Raise the Wage Act, which would have raised the minimum wage to $15 per hour. The U.S. House of Representatives had included the Raise the Wage Act in its March 2021 COVID relief bill, but it was taken out of the Senate version.
Low wages not only harm workers and their families – they cost taxpayers. When workers are paid poverty wages and are unable to afford the basic necessities of life, taxpayers pick up the tab for the public benefit programs that workers must rely on to get by.
A 2020 report from the U.S. General Accounting Office (GAO) found that a number of Roark Capital-owned fast food chains including Dunkin’ Donuts, Sonic, Arby’s, and Hardees had among the highest number of workers relying on food stamps and/or Medicaid in multiple states.[iv]
[i]CareVet, owned by Comvest Partners, which has about 1,110 employees. https://www.veterinarypracticenews.com/living-wage-initiative-launched-by-national-hospital-network/