This article briefly describes the recent growth of private equity, details some of the challenges such growth has posed for American labor, and outlines ways in which labor has chosen to respond. In so doing it suggests that the diverse, complicated, and practical choices labor has made to date have been shaped by the particular strengths and weaknesses of its position in American society. More particularly, these choices place the emphasis on (1) legislative change, relating mainly to tax rather than regulatory policy (labor-related or otherwise); (2) capital strategies, by which unions and pension funds engage companies in connection with corporate governance and investments that might be made in or withheld from them; and (3) high-profile campaigns relating to the reputation of private equity firms and their investee companies (as compared to traditional means of securing union recognition or exercising collective bargaining rights).
AFL-CIO (2007) ‘Private Equity and Hedge Funds’, Chicago, AFL-CIO Executive Council Statement, 8 August http://www.aflcio.org/aboutus/thisistheaflcio/ecouncil/ec08082007b.cfm
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Axelson, U., Jenkinson, T., Weisbach, M. and Strömberg, P. (2007) ‘Leverage and Pricing in Buyouts: An Empirical Analysis’ , paper presented at the Swedish Institute for Financial Research Conference on The Economics of the Private Equity Market , August.
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Baker, L. (2007) ‘U.S. Union Attacks Private Equity Taxation’ , Tax-News.com, 17 August http://www.investorsoffshore.com/asp/story/storyinv.asp?storyname=28159
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Bureau of Labor Statistics (2008) The Employment Situation. Bureau of Labor Statistics, United States Department of Labor, April http://www.bls.gov/news.release/empsit.nr0.htm
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Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey.
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Davis, S., Haltiwanger, J., Jarmin, R., Lerner, J. and Miranda, J. (2008) ‘Private Equity and Employment’, US Census Bureau Center for Economic Studies Paper No. CES-WP-08-07,http://ssrn.com/abstract=1107175
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Gerard, L. (2007) ‘Preventing Another Pension Fund Meltdown: Challenging the Financialization of Capital Markets’, speech delivered at the 5th annual Capital Matters: Managing Labor’s Capital Conference, Pensions and Capital Stewardship Project, Labor and Worklife Program, Harvard Law School, 2 May.
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Groh, A. and Gottschalg, O. (2008) The Opportunity Cost of Capital of US Buyouts, NBER Working Paper Series, Vol. w14148, http://ssrn.com/abstract=1152689
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Hall, D. (2008) Private Equity and Employment: The Davos/WEF/Harvard Study , http://www.psiru.org/reports/2008-02-PE-WEF.doc
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Hebb, T. and Beeferman, L. (2008) ‘US Pension Funds’ Labour-Friendly Investments’ , paper presented at the 2008 Alfred P. Sloan Foundation Industries Annual Conference, 1-2May,http://web.mit.edu/is08/pdf/Hebb_Beeferman.PDF
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Kaplan, S. and Schoar, A. (2005) ‘Private Equity Performance: Returns, Persistence and Capital Flows’, Journal of Finance60(4): 1791-823.
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Lerner, J. (2007) ‘Private Equity Returns: Myth and Reality’ , paper presented at the 5th Annual Capital Matters: Managing Labor’s Capital Conference, 2-4 May, http://www.law.harvard.edu/programs/lwp/LWPpensions_conference_materials.html
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Moon, J. (2006) ‘Public vs. Private Equity’, Journal of Applied Corporate Finance18(3): 76-82.
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Phalippou, L. and Gottschalg, O.(2009)‘The Performance of Private Equity Funds’, Review of Financial Studies22(4): 1747-76.
Prequin (2008b) 2008 Prequin Global Private Equity Review.
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Private Equity Council (2007) Public Value: A Primer on Private Equity, http://www.privateequitycouncil.org/wordpress/wp-content/uploads/pec_primer_layout_final.pdf
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Rauh, J.D. and Kaplan, S.N.(2007) ‘Wall Street and Main Street: What Contributes to the Rise in the Highest Incomes?’, CRSP Working Paper No. 615; AFA 2008 New Orleans Meetings Paper, http://ssrn.com/abstract=931280
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Russakoff, D. and Cho, D. (2007) ‘New Labor Strikes Deals with "Private Equity Guys"’ , Washington Post (10 June): A1, http://www.washingtonpost.com/wp-dyn/content/article/2007/06/09/AR2007060901413_pf.html
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Service Employees International Union(SEIU) (2007) Behind the Buyouts: Inside the World of Private Equity , http://www.behindthebuyouts.org/
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Service Employees International Union (SEIU) 1199, Pension Fund, Labor Friendly Guidelines for Private Equity Account Managers.
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Shapiro, R. and Pham, N. (2008) ‘American Jobs and the Impact of Private Equity Transactions’, Sonecon, http://www.privateequitycouncil.org/wordpress/wp-content/uploads/pec-jobs-study-01-17-08.pdf
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United States Securities and Exchange Commission (2008) ‘The Investor’s Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation’ ,http://www.sec.gov/about/whatwedo.shtml
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World Economic Forum (WEF) (2008) Globalization of Alternative Investments, Working Papers Volume1, The Global Economic Impact of Private Equity Report 2008.
