100,000 Jobs Created?

Romney about his job-creation credentials  claimed credit for more than 100,000 net jobs.

100,000 Jobs Created?

In a Time magazine interview on Dec. 21, Romney said:

Romney, Dec. 21: And so I’ll compare my experience in the private sector where, net-net, we created over 100,000 jobs. We created over 100,000 jobs.

100,000 Jobs Created?

He repeated the claim in a Jan. 3 appearance on Fox News’ “Fox and Friends,” but that time said he “helped” create them.

Romney, Jan. 3: And I’m very happy in my former life; we helped create over 100,000 new jobs.

100,000 Jobs Created?  When we asked the Romney camp for support, spokesman Eric Fehrnstrom sent us a list of jobs added at three companies in which Bain had invested, saying that these three examples alone created over 100,000 jobs: Staples, which had 89,000 employees as of Dec. 31, 2010; The Sports Authority, which had 15,000 employees as of July 2011; and Domino’s, which has added 7,900 jobs since 1999.

That’s hardly a rigorous analysis of jobs gained and lost at companies Bain backed. And does Romney deserve credit for all of those jobs? Bain was but one of several investors in The Sports Authority, which was launched with the monetary help of William Blair Venture Partners, Phillips-Smith and Marquette Venture Partners. Not to mention the work of founding executives at the company, such as CEO Jack A. Smith.

Plus, Kmart owned the company for about five years starting in 1990. Does Kmart get credit for whatever job growth occurred then? In 2006, the private equity firm Leonard Green & Partners acquired Sports Authority. Does Bain, and Romney, still get credit for jobs created after the company is bought or sold years later?

Staples, too, was launched with money from William Blair and Bessemer Venture Partners, two firms mentioned by Staples founder and former CEO Tom Stemberg, who, it could be argued, deserves the most credit for jobs added by the office-supply store. In comments published by CNN Money in 2002, Stemberg said that Bain “gave us a boost” by talking them up to Avery Dennison, an office-supply wholesaler.

Determining who gets credit for how many jobs is challenging, to say the least.

Bain managers told the Los Angeles Times that they weren’t focused on creating jobs; they were trying to make money.

Los Angeles Times, Dec. 3: “I never thought of what I do for a living as job creation,” said Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years before forming his own firm. “The primary goal of private equity is to create wealth for your investors.”

And then there are the job losses. Bain took over other companies where layoffs, and even bankruptcies, followed. Romney said that 100,000 figure was “net-net.” So, whatever job creation figure one could use, we’d have to subtract jobs lost, such as 385 jobs cut at American Pad & Paper; 1,900 positions cut or relocated at Dade International; 2,100 workers laid off from DDI Corp.; 2,500 jobs lost at Clear Channel Communications; and 3,400 layoffs at KB Toys. Those examples come from Politico and the New York Times.

2 Responses to “100,000 Jobs Created?”