The fight between labor groups and private equity firms reached a new peak Friday at a New York conference, but it still sounds like a frustrating attempt by two passionate and defensive opponents who don't speak the same language and aren't even sure they're talking about the same thing.

A panel at a Columbia Business School conference — featuring Andrew Stern, the head of the Service Employees International Union; Gwyneth Ketterer, managing director of merchant banking for Bear Stearns; and John Franchini, partner with the law firm Milbank, Tweed, Hadley & McCloy — didn't quite reach the Jerry Springer level its moderator suggested it might, but it got heated.

Stern, who represents the union employees that sometimes end up as casualties when private equity firms buy their employers, is fighting for increased benefits, fairer wage and tax laws, and narrowing the gap between America's richest and poorest. He won a victory this week, when his efforts helped get legislation introduced in Congress that would further his causes.

He demonizes private equity for staying quiet in the public debate on these issues, even while their firms are among the nation's biggest employers by virtue of their portfolio investments. He likens them to Wal-Mart, which the S.E.I.U. also fought vigorously to improve working conditions for employees.

Ketterer and Franchini, meanwhile, believe private equity firms are improving the competitive landscape by getting their portfolio companies on track. That, in turn, makes money for their investors, which include endowments — and the pension funds of the very people Stern represents.

"Net-net, we've helped things out," Ketterer said. She insists that her industry has merely used "the tools available" (that is, eager investors and cheap capital) to earn money. Private equity didn't create the market, she said; the market created private equity.

Stern doesn't see it that way. He insists he's a "capitalist at heart," but said he doesn't believe the market is working the way it should, and private equity is partly to blame for letting that happen.

"We are not opposed to the private equity industry, we are opposed to some of its practices," he said. He agrees that the investment returns it generates for its investors — even after its hefty fees — are good. He said his problem lies in the carnage it leaves behind while generating those returns.

The debate, while lively, was also frustrating. The union likes private equity's returns but wants it to consider ways to better the society at large. Private equity professionals realize there's inequality in the world, but don't think they're part of the problem. Instead, they seem to say, we make the world a better place. And round and round it goes.

Several audience members became impatient with the discussion, pressing private equity to offer solutions to many of society's ills. But they never quite made the argument that it's private equity's responsibility. Should these two groups be having this discussion at all?

About the only thing that's clear is that there's virtually no constructive dialogue happening between the two groups.

"They want to talk about health care and human rights in Abu Dhabi but all they really want to do is unionize Manor Care," says Chris Ullman, spokesman for the Carlyle Group. His firm has been targeted by the S.E.I.U. for its treatment of employees of the assisted living company it recently took private.

Doug Lowenstein, president of the Private Equity Council, which was created a year ago to help the industry fight this very battle, gave a keynote address immediately following the panel that was met with no hostility. Either the union backers had left the conference, or they chose to remain silent during the question and answer session.

His remarks were humble yet optimistic, as he admitted that the private equity industry had failed to articulate its role in the economy, but he finds its willingness to embrace change now as promising. "The private in private equity is over," he said.

But don't let that fool you into believing that these firms are about to become transparent. They will merely become more public in the delivery of the right message to advance their success.

by Megan Barnett