Alma Jordan, a certified nursing assistant at the Marcella Center nursing home in Burlington, New Jersey, respected the residents she cared for there over the past 16 years. They were like family, she said, and she believes they’ve appreciated her attentiveness, especially during Covid-19. Not so, the nursing home’s new owner, Jordan said. After Complete Care Management, the largest for-profit nursing home operator in New Jersey, took over the 150-bed Marcella Center in April, it slashed worker benefits, she and other employees as well as a representative from their union told NBC News. Amid the pandemic, Jordan’s paid holidays were reduced, and her monthly health insurance costs more than tripled, she said. The company stopped contributing to the employee pension, replacing it with a 401(k) plan that had no employer match or contribution. Complete Care took away vision insurance and stopped a reimbursement program covering employee education costs, so Jordan, 45, won’t be able to recoup money she spent working toward a degree to become a licensed practical nurse.“I put all my effort into this company, and someone else took over and they don’t want to give us what we deserve,” Jordan said. “For them, it’s business. It’s not about the staff and the residents. It’s only about making profits.”In late September, Jordan quit her position at the facility. The reduced benefits and deteriorating work conditions got to be too much, she said. When Complete Care came in, Jordan and other Marcella workers were operating under a union contract struck with the facility’s previous owner. Complete Care did away with that contract, which also covered four other unionized New Jersey nursing facilities it recently acquired, according to the Service Employees International Union. Complete Care owns 61 facilities in eight states, including Connecticut, Maryland and Wisconsin. It is backed by a private-equity firm called Peace Capital in Lakewood, New Jersey, whose principal owner is Sam Stein. Jordan and her fellow workers are not alone in experiencing reduced circumstances after their company is taken over by a private-equity firm. The new titans of finance, these firms use large pools of debt — typically raised in what's called the leveraged loan market — to acquire companies they hope to resell in a few years at a profit. Among companies raising money in this loan market during the past three years, debt levels at private-equity-backed entities were at least 30 percent higher than debt levels at companies not backed by private equity, according to LCD, a unit of S&P Global Market Intelligence. But the heavy debt loads they take on, combined with pressure to flip acquired companies quickly, increases the likelihood that private-equity firms will have to cut costs in the operations that they buy. Often, the first to the chopping block is the company’s workforce. A 2019 study by the National Bureau of Economic Research lays this out.
All data is taken from the source: http://nbcnews.com
Article Link: https://www.nbcnews.com/business/personal-finance/working-companies-owned-well-heeled-private-equity-firms-can-mean-n1281146
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