Bain is bad for jobs, Bain is good for jobs

Sep 04, 2012

Dan Primack was a senior editor at Fortune from 2010 to 2016. He was also the author of Term Sheet, Fortune's daily newsletter about deals and dealmakers.

FORTUNE -- The Huffington Post reports that several former employees of Bain Capital-owned companies will speak this week at the Democratic National Convention in Charlotte. No word yet on specifics, but don't expect them to mirror the glowing reviews of Bain that we heard last week in Tampa.

In other words, Democratic speakers will say that private equity is horrible and Republican speakers said private equity is awesome.

Here's the reality: Both sets of speakers can be telling the truth, regardless of partisan persuasion.

Private equity is not monolithic. It is made up of hundreds of firms with thousands of executives who draft specific strategies for each portfolio company. Same goes for Bain Capital, albeit at a smaller scale. It's entirely possible for Bain to have successfully turned around one company, while simultaneously helping to destroy another one. It may have been liberal with pink slips at a retailer, while it added jobs at a steel mill. Or maybe it fired people after acquiring a company, and then hired new people later. Or vice versa.

The only large-scale, unbiased study of private equity and employment found that the overall industry had a negligible impact. The researchers were not able to break out data on a firm-by-firm level, but there is little reason to think that Bain has any more tendency to add or cut portfolio company employees than does any other large private equity sponsor.

And, in the end, all any of these firms really care about is making money for their investors, many of whom have their own constituents to think about (pensioners, etc.).

So when you hear the former Bain employees speak this week at the DNC, or when you think back to last week's RNC speakers, don't doubt that what they're telling you is true. Just remember that it's only part of the larger story.

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