Renowned Economist Evaluates Private Equity Firms

From left, Professor Eileen Applebaum joins SMLR Ph.D. student Fuxi Wang, following Applebaum's talk at the Labor Education Center. See additional photos below.

Professor Eileen Applebaum, renowned economist and SMLR adjunct instructor, gave a special talk titled, “Private Equity at Work: When Wall Street Manages Main Street,” held on April 9 at the Labor Education Center. Applebaum presented results from her collaboration with Cornell University Professor Rosemary Batt in which they conducted a comprehensive examination of private equity firms. This is detailed in their new book Private Equity at Work.

Applebaum shared stories of how private equity firms have worked successfully and failed. While acknowledging that private equity firms have had positive effects on the operations and growth of small- and mid-sized companies and in turning around failing companies, she discussed ways in which the interventions of private equity firms, more often than not, lead to significant negative consequences for many businesses and workers.

“Limit compensation incentives for risky behavior and require the severance pay for workers in bankruptcy cases,” said Applebaum, citing her policy recommendations.

She further detailed her examination of these firms, as highlighted in her book with Batt. The authors evaluate original case studies and interviews, legal documents, bankruptcy proceedings, media coverage, and existing academic scholarship to demonstrate the effects of private equity on American businesses and workers. 

Applebaum’s talk was part of theCapitalism and Democracy in Conflict? Governing Work in the Global Economy Lecture Series. It was sponsored by Rutgers SMLR and Rutgers Center for European Studies and supported by Rutgers Centers for Global Advancement and International Affairs.