Did Bain Capital Save Jobs or Destroy Them?

  1. Mr Tindle profile image79
    Mr Tindleposted 5 years ago

    Did Bain Capital Save Jobs or Destroy Them?

    Bain Capital, the private equity investment firm, that presidential candidate Mitt Romney used to be involved with, seems to have become a campaign issue. In my own view, most of the so called "issues" that take center stage during presidential contests amount to nothing more than trivial nonsense. I have my own view about the context in which the Bain Capital issue has become part of this presidential election, but I'm really curious to hear people's opinions on whether Bain Capital actually destroyed or saved jobs.

  2. Volitans profile image83
    Volitansposted 5 years ago

    The answer is: yes. Some of Bain's efforts destroyed jobs. Some of them saved jobs. Some of them actually created new jobs.

    It's due to the nature of Bain's business model. Bain acquires foundering companies, makes them attractive to other investors, and then sells the company for a profit. Typically, Bain makes these companies by reducing the operating cost of the companies. This is usually achieved by cutting wages, benefits, or positions. Often, all three will be cut. The leaner companies are then sold off.

    Sometimes, this can lead to some jobs being saved. If a company was going to go completely out of business, every job at the company would be lost. Other times,the cuts Bain makes end up destroying a company. And other times, the leaner company goes on to experience dramatic growth and may end up hiring even more people than Bain got rid of.

    So it's a difficult question to answer conclusively.