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What's Wrong With Trumka's Op-Ed

    In a recent op-ed in The Wall Street Journal, AFL-CIO President Richard L. Trumka mischaracterizes private equity’s record in creating jobs, strengthening companies and benefiting workers.


    Read the truth about private equity investment

    PE and jobs

    1) At eight out of ten private equity portfolio companies, employment is sustained or increased over time.

    2) Large companies acquired by major U.S. private equity firms increased domestic employment by 13 percent between 2002 and 2005, a period when employment at all large U.S. businesses grew by only three percent.

    3) For manufacturing companies owned by private equity investors, employment grew by 1.4 percent during the same four-year period, while employment in the overall manufacturing sector declined by 7.7 percent.

    4) Before they were acquired, private equity-owned companies on average were losing jobs at existing facilities faster than their competitors. But by the fourth year of private equity ownership, employment levels at those companies had increased to above the industry average.

    5) In the first two years of private equity ownership, private equity portfolio companies increased the rate of job growth at new U.S. facilities to six percent above the industry average.

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    Sources

    1) Ernst & Young, Transaction Advisory Services, “How Do Private Equity Investors Create Value? A Study of 2006 Exists in the U.S. and Western Europe” 2007

    2) Shapiro, Robert and Pham, Nam “American Jobs and the Impact of Private Equity Transactions,” Private Equity Council January 2008

    3) Ibid.

    4) The Global Economic Impact of Private Equity Report 2008, “Private Equity and Employment,” World Economic Forum, January 2008

    5) Ibid.