Earlier this week, the campaign for GOP presidential hopeful Mitt Romney released a video called "American Dream," touting the investment of Romney's former private-equity firm, Bain Capital, in an Indiana manufacturer called Steel Dynamics, Inc (SDI). The case of Steel Dynamics, the underlying message went, proves that Romney knows how to create quality jobs.
"Steel Dynamics started with an empty field and a big dream," the narrator intones. "SDI almost never got started. When others shied away, Mitt Romney's private-sector leadership team stepped in." Today, the ad notes, SDI employs more than 6,000 workers. "Anything is possible in America," the narrator says.
A major producer of carbon steel, SDI has the sort of middle-class jobs that both Romney and President Barack Obama say they can bring to communities still battered by the economic downturn. But by the Romney campaign's own math, a lot of the jobs created through Romney's efforts at Bain were of a different sort -- retail and food-service positions, many of them low-wage and part-time, the kind of gigs that don't necessarily support middle-class families.
Romney himself has claimed to have helped create more than 100,000 positions through the private-equity investments made at his time with Bain. As the Washington Post has noted, that figure in itself is highly debatable, depending on whether you credit Romney with jobs created after his Bain tenure, and whether you stack Bain-induced job losses against him. But even in giving Romney roughly 100,000 jobs, most of those positions appear to come from the growth of office-supplier Staples (89,000 jobs), sporting goods retailer Sports Authority (15,000) and pizza chain Domino's (7,900). Given that many jobs in retail and fast food don't provide a true living wage, they aren’t exactly fodder for "American Dream" campaign ads about middle-class jobs.
The Steel Dynamics ad counters the Obama campaign's narrative that Romney's time at Bain led to plant closings and economic suffering. But it also aims to paint a much rosier picture of whatever jobs Bain investments did happen to spur.
"[I]t is very likely that the jobs that [Romney] created were on average much worse than the jobs he killed," the economist Dean Baker said in an email to The Huffington Post. "Unfortunately, there would be no easy way to break this down, since private equity companies don't have to disclose much. Of course this would just be mirroring the larger economy, but if he wants to take credit for his job creation record at Bain then it is reasonable that he also be held accountable for the quality of those jobs."
On the question of job quality, Romney campaign spokeswoman Andrea Saul said the candidate stands by the positions created by Bain investments. "We will put Mitt Romney’s record of job creation up against President Obama’s any day," Saul said in an email. "President Obama has never held a job in the real economy, has never met a payroll, and believes that more government is the answer to everything."
Salaried managers at Staples and Sports Authority typically make salaries in the mid-five figures, but the much larger pool of workers on the store floors average between $8 and $9 an hour, according to Glassdoor.com, a website based on worker feedback. As Bloomberg's Matt Townsend noted in February when reporting on Bain's success stories, a lot of full-time sales associates at both Staples and Sports Authority would find themselves toiling beneath the federal poverty line for a family of three.
The story isn't much different at Domino's. Managers average a salary somewhere in the 30's, according to GlassDoor.com, but delivery drivers typically don't make much more than the minimum wage before tips. Domino's and its franchises employ thousands of drivers who make deliveries in their own cars, and some of them have sued the company, claiming its reimbursement system for mileage violates wage and hour laws.
Obama campaign spokesman Danny Kanner argues that Romney's time at Bain wasn't about job creation, be it at Steel Dynamics or Staples. His "focus was never on strengthening companies or creating jobs, it was about getting a high return on his investment, no matter the cost to workers, companies or communities," Kanner said in an email. "These are the values he promises to bring as President by giving more budget-busting tax cuts to the wealthy on the middle class’ dime and letting Wall Street write its own rules -– the same scheme that benefited a few, but devastated the middle class and crashed our economy."
Job growth in retail and restaurants has been outpacing other sectors of the economy, but many of the jobs are low-paying and come with little opportunity for advancement. So when it comes to Bain's history with Staples and Domino's, the Romney campaign might avail itself of the jobs statistics, but it likely won't talk much about the jobs themselves. As Romney made clear speaking at a pipe maker in North Carolina last week, better to talk about manufacturing work than pizza delivery jobs.
"We're on the verge of a manufacturing resurgence in this country," Romney said in Charlotte. "Jobs are going to come back with the right guidance."
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