Economic Update Extra: Cheryl Claude & Charles Khan

Date: September 6, 2018
Host: Richard D. Wolff (Democracy at Work)

Episode Overview

This special "Extra" episode of Economic Update features a pointed discussion with Cheryl Claude, a former Toys R Us employee and labor activist, and Charles Khan, an advocate organizing workers affected by corporate collapses. The conversation dives into the aftermath of the Toys R Us bankruptcy, the denial of promised severance for 33,000 employees, and the broader systemic issues posed by private equity takeovers in American retail. The guests and host critically examine both personal and systemic consequences, offering both firsthand and analytical insights into the collapse's fallout and the fight for economic justice.

Key Discussion Points & Insights

The Reality of Toys R Us' Collapse and Severance Denial

• Severance Promises Broken:

  • Cheryl recounts being promised severance pay after 33 years at Toys R Us, only for the company to retract the offer, leaving all 33,000 employees with nothing.

    “After working for Toys R Us for 33 years and being left with nothing…they told us we were getting severance pay and they gave us nothing.” — Cheryl (01:14)

• Personal Impact and Hardship:

  • Cheryl details the severe financial and emotional distress now facing her and her colleagues:
    • Struggling with car payments, rent, prescription costs
    • Inability to find a new job after weeks of searching
    • Her 60-year-old husband taking two jobs to make ends meet

    “I can’t even find a job right now. I’m struggling with car payments. I’m struggling with rent…” — Cheryl (02:45) “My husband, 60 years old, he had to get two jobs to try to make ends meet.” — Cheryl (03:44)

• Corporations vs. Workers:

  • Wolff and Cheryl highlight the injustice of wealthy private equity owners denying modest severance to thousands:

    “You are condemning…tens of thousands of families to go through an open ended period of catastrophe.” — Wolff (03:19)

Systemic Patterns: Private Equity and Retail Collapse

• Not a One-Off Event:

  • Charles explains Toys R Us is far from unique—similar patterns are seen with Claire’s, Kmart, Sears, all suffering from private equity-induced bankruptcies.

    “This is something we’ve seen many times…with stores like Claire’s, Kmart, Sears…all companies owned by private equity…” — Charles (04:13)

• Scale of Job Destruction:

  • In the past decade, nearly 300,000 jobs lost to private equity-driven closures.
    • Workers were promised one week of severance pay per year served, now owed $75 million collectively.

• Legislative and Structural Reforms Discussed:

  • Advocacy for:
    • Joint employer status, making Wall Street and private equity responsible
    • Clawback taxes to recoup profits after destructive closures
    • Job destruction fees on private equity/hedge funds
    • Transparency and worker notification ahead of takeovers
    • Closing the carried interest tax loophole

  “We are trying to change some of these laws…so that they are held to at least the same level of responsibility as the corporations themselves.” — Charles (04:54)

Rationalizations and Excuses by Corporate Owners

• Shifting Blame:

  • Companies frequently deflect responsibility by pointing to Amazon and online competition:

    “What I’ve heard with Toys R Us is that it’s Amazon’s fault. That’s what everyone says.” — Charles (07:00)

    • Wolff and Charles refute this, arguing that crushing companies with debt made it impossible for them to compete.

• Contrasting Human and Financial Realities:

  • Private equity’s only real commitment is to profit, not to jobs or communities.

    “They’re pure money people…they offload all of the costs onto you and they rake in the benefits for them. This is a system that’s set up to do this.” — Wolff (08:15)

Workers’ Awareness and the Erosion of Livelihood

• Blind Spots and Awakening:

  • Cheryl describes her initial lack of understanding about the private equity takeover and her gradual realization as workplace culture deteriorated.

    “When you first heard about them buying it in 2005, did you understand? — Wolff (10:42)
    “I didn’t understand a word. I didn’t understand nothing.” — Cheryl (10:48)

    • She didn’t connect changes (no company parties, loss of support during bereavements) until years later, when job quality and morale declined.

• Fear of Repetition:

  • Cheryl now checks potential employers to avoid those invested in or run by private equity.

    “I’m scared to go into retail again because I’m afraid that this is going to happen to me again.” — Cheryl (10:31)

The Broader Threat to All Workers and Call for Change

• Uncertainty for Millions:

  • Wolff comments on the precariousness all workers now face, even in once-stable companies.
    • “There’s a level of insecurity and uncertainty…that must eat, even if you don’t admit it to yourself.” (09:46)

• Retail Workers Ready for Action:

  • Charles affirms growing skepticism and the desire for change among the nation’s 13 million retail workers

    “They all know that they’re trying to move and create change. And democracy is…sometimes can be a slow process, but the workers are ready for it.” — Charles (13:59)

Memorable Quotes & Moments

• On Broken Promises and Outrage:

  "They promised us, and we are entitled to severance pay…fighting for 33,000 employees is what I’m doing."
  — Cheryl (01:14–01:46)

• On Human Cost:

  “It’s just very sad. My husband, 60 years old, he had to get two jobs to try to make ends meet.”
  — Cheryl (03:44)

• On Systemic Suffering:

  “It’s an extraordinary example of many people being damaged to enrich the few who already are the richest. It’s as gross a story as imaginable.”
  — Wolff (02:23)

• On Realization and Betrayal:

  “When I started to see it getting worse and worse and worse...then I said, oh, no, not this.”
  — Cheryl (11:25)

• On Accountability:

  “I want to know how these corporate people sleep at night knowing that 33,000 employees don’t have nowhere to go. I want to know how they sleep at night, because I don’t sleep well.”
  — Cheryl (12:26–12:45)

• On the Systemic Need for Change:

  "All of you, 13 million retail workers, they all vote. They all know that they're trying to move and create change."
  — Charles (13:59)

Timestamps for Important Segments

• [00:00]–[02:09]: Severance betrayal and personal impacts
• [02:45]–[04:13]: Financial hardship, emotional toll, and broader suffering
• [04:13]–[06:47]: The private equity playbook—patterns, legislative reform, and advocacy
• [07:00]–[08:15]: Corporate excuses, myth-busting, and systemic critique
• [09:46]–[11:55]: Workers’ lack of awareness, realization of decline, and betrayal
• [12:26]–[13:39]: Corporate morality, worker precarity, and movement for change
• [13:59]–[16:00]: Closing, summary of need for collective action

Tone and Language

The conversation is personal, urgent, and at times raw—melding economic critique with stories of everyday survival. Cheryl’s accounts are emotionally resonant and direct, while Charles offers a policy-driven, yet passionate, overview. Wolff steers the dialogue with empathy and righteous indignation.

Summary Takeaway

This episode paints a vivid picture of the personal devastation wrought by the Toys R Us closure, while dissecting the systemic mechanisms that enable such outcomes. It is a rallying call for worker awareness, solidarity, legislative reform, and a reminder that meaningful change requires both individual action and collective organization within—and beyond—retail.