Searching for smart, safe news you can TRUST?

Support safe, smart, REAL journalism. Sign up for our Axios AM & PM newsletters and get smarter, faster.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Searching for smart, safe news you can TRUST?

Support safe, smart, REAL journalism. Sign up for our Axios AM & PM newsletters and get smarter, faster.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Lazaro Gamio / Axios

Private equity investors are often criticized for destroying jobs, though the most comprehensive research into their impact on employment found that it was "modest." That's about to change.

Why this matters: Harvard Business School's Josh Lerner says the update to a study on private equity and jobs this time around will definitively show private equity to be a net job creator or job destroyer. He would not tip his hand as to which side of the ledger things now fall.

The issue: Private equity's employment record is difficult to discern, since private companies rarely disclose payroll information to anyone other than tax authorities. But a group of business school professors ― including Harvard's Lerner and the University of Chicago's Steve Davis ― secured access to the U.S. Census Bureau's Longitudinal Business Database, which is derived from IRS records, and then matched those employment records with thousands of private equity transactions that occurred between 1985 and 2005.

They were required to only use the data in the aggregate (i.e., not identify specific transactions), and in 2011 released a working paper that used a control sample of companies not owned by private equity. It found:

  • Private equity has just "a modest net impact on employment ... employment shrinks by less than 1% at target firms relative to controls in the first two years after private equity buyouts."
  • Company demographics have a large impact. Net job losses were higher for retail companies and public companies taken private, while job gains were found for independently-owned companies.
  • Despite the "modest" net results, private equity does create quite a bit of labor turmoil ― firing an above-market number of people in the early days after buying a company, but then also hiring more people in the investment's latter years.

What comes next: Both private equity and the broader labor market have changed a lot since 2005, so the researchers last year decided to update their paper with an extra decade worth of data. It's expected to be released within the next few months.

The fallout: Because private equity executives have regularly used the 2011 paper to push back against "job destroyer" claims, they are inextricably linked to the revision. For better or for worse.

  • For better: Buyout executives will have a giant arrow in their quiver when fighting everything from tax increases to SEC registration requirements to media attacks on their alumni who are running for political office (i.e., the next Romneys).
  • For worse: They'll need to do more than stop complaining about bad PR. They'll have to justify their own existence without looking like hypocrites ― something that could be a tougher trick than turning around a troubled company.

Go deeper

31 mins ago - Health

U.S. tops 88,000 COVID-19 cases, setting new single-day record

Expand chart
Data: COVID Tracking Project; Chart: Axios Visuals

The United States reported 88,452 new coronavirus cases on Thursday, setting a single-day record, according to data from the COVID Tracking Project.

The big picture: The country confirmed 1,049 additional deaths due to the virus, and there are over 46,000 people currently being hospitalized, suggesting the U.S. is experiencing a third wave heading into the winter months.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Large coronavirus outbreaks leading to high death rates — Coronavirus cases are at an all-time high ahead of Election Day.
  2. Politics: Top HHS spokesperson pitched coronavirus ad campaign as "helping the president" — Space Force's No. 2 general tests positive for coronavirus.
  3. World: Taiwan reaches a record 200 days with no local coronavirus cases.
  4. Sports: MLB to investigate Dodgers player who joined celebration after positive COVID test.
  5. 🎧Podcast: The vaccine race turns toward nationalism.

The norms around science and politics are cracking

Illustration: Aïda Amer/Axios

Crafting successful public health measures depends on the ability of top scientists to gather data and report their findings unrestricted to policymakers.

State of play: But concern has spiked among health experts and physicians over what they see as an assault on key science protections, particularly during a raging pandemic. And a move last week by President Trump, via an executive order, is triggering even more worries.