Eric Schlosser, author of Fast Food Nation, has an op-ed in the NY Times about how Burger King has basically singlehandedly scuppered a meager pay rise for some of the poorest immigrant workers in America. It’s searing stuff and he relates it all back to the owners. Who are they?
Three private equity firms — Bain Capital, the Texas Pacific Group and Goldman Sachs Capital Partners — control most of Burger King’s stock. Last year, the chief executive of Goldman Sachs, Lloyd C. Blankfein, earned the largest annual bonus in Wall Street history, and this year he stands to receive an even larger one. Goldman Sachs has served its investors well lately, avoiding the subprime mortgage meltdown and, according to Business Week, doubling the value of its Burger King investment within three years.Telling Burger King to pay an extra penny for tomatoes and provide a decent wage to migrant workers would hardly bankrupt the company. Indeed, it would cost Burger King only $250,000 a year. At Goldman Sachs, that sort of money shouldn’t be too hard to find. In 2006, the bonuses of the top 12 Goldman Sachs executives exceeded $200 million — more than twice as much money as all of the roughly 10,000 tomato pickers in southern Florida earned that year. Now Mr. Blankfein should find a way to share some of his company’s good fortune with the workers at the bottom of the food chain.
Why is this appearing in a blog about health care? Because the same kind of corporate bad behavior happens here too, and the same type of private equity groups are behind it.
Who’s the worst behaved actor in the list of not exactly angelic characters in American health insurance? THCB regulars know that I’m talking about: Mega Life & Health.
Who owns HealthMarkets, Mega’s parent company? Yup, the biggest and richest private equity group, Blackstone, and Lloyd Blankfein and his colleagues at Goldman Sachs.
I’m delighted that they’re being called out personally in the NY Times, and somewhat frustrated that neither Paul Krugman nor Bob Herbert has taken up a similar cause on the health care side. (Incidentally Mitt Romney owes his huge fortune to Burger King’s owner Bain Capital, but that’s another story).
But it’s time to make these connections and to call out some of the richest people in America on what they’re decisions and the behavior of companies they own is doing to some of those significantly less fortunate than themselves.