- In 2013, private equity firms owned or backed more than 17,000 US companies employing about 7.5 million people. Little research has been conducted to understand private equity’s effects on workers.
- A new book written by two economists, called "Private Equity at Work," attempts to answer the question how the private equity business model affect its employees.
- According to the book, private equity owners reduced more jobs than other companies, but the net effect is minimal. One paper cited, led by university of Chicago economist Steven Davis and reviewing 3,200 firms acquired between 1980 and 2005, found that buyouts lead to more job creation and destruction than companies that were not bought by private equity investors.
- Another study found that 39% of CEOs were replaced in the first hundred days of a buyout, and 69% were replaced at some point during PE ownership.
- The book also noted that private-equity owners are no more hostile to labor unions than executives of public companies. "While some PE firms market themselves as union-friendly, others are hostile, and still others are agnostic," the authors write.
Read more in the WSJ.
