Historically, the disaster restoration industry was made up of smaller, independent businesses handling local projects. But after Hurricane Katrina in 2005, private equity firms saw an opportunity to consolidate the market by buying up smaller companies, and some estimates value the US restoration industry as high as $200bn.
Wow, is there anything private equity can’t make worse?
This is the best summary I could come up with:
The demand for skilled disaster restoration or resilience workers, who are mostly immigrants and refugees from Latin America and Asia, is soaring as greenhouse gases released by burning fossil fuels heat the planet, provoking more destructive storms, floods and wildfires.
Wage theft, lack of protective clothing, and other unsafe conditions are rampant across the industry at the expense of workers, communities and climate, according to the report, Private Equity Profits from Disasters, shared exclusively with the Guardian.
Researchers found that an increasingly complex web of franchises, contractors and subcontractors, insurance providers, labor brokers and agencies and mostly temporary jobs makes it difficult for workers to know who is ultimately accountable for violations.
Overall, the number and cost of weather and climate disasters in the US is rising due to a combination of population growth, development and the influence of human-caused global heating on extreme events like floods, drought and fires.
Yet the Federal Emergency Management Agency, Fema, does not attach mandatory labor or health and safety standards to its payouts, while private equity firms have a track record in cost cutting to maximize profits.
In one case, migrant workers who helped rebuild luxury hotels destroyed by Hurricane Irma in Florida Keys in 2017, were forced to sue Cotton Commercial, acquired by the private equity firm Sun Capital in 2020, and a temp agency to recover more than $280,000 in back pay and damages.
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