Who are the "Job Creators"?

Discussion in 'Economy' started by Dragon, Sep 17, 2011.

  1. Dragon

    Dragon Senior Member

    Sep 16, 2011
    Thanks Received:
    Trophy Points:
    From time to time, we hear the phrase "job creators" from Republicans as a justification for cutting taxes or not closing tax loopholes or some other thing that is advocated that we do or not do to benefit the rich and/or corporations. The implication is that rich people "create jobs" and if we give them more money they will create more jobs, while if we take money away from them they will create fewer jobs.

    But what is the actual process whereby a job gets created? Who are the real job creators? Put another way: who are the people who, if they have more money, will take the actions that result in new jobs being created?

    Let's say we're talking about a retail chain, of which a certain store is open to the public between the hours of 10 am and 8 pm Monday through Friday and 10 am to 10 pm Saturday. That's a total of 62 hours per week. Let's say that the store requires two people on the floor to manage the traffic at all times and three people at peak times. So the store hires two full time employees, one of whom works 9:30 - 6:00 M-F and the other of whom works 12-8:30 M-F, together with a part-time person who works 2-6 M-F and a couple more part-time people who work weekends. That's two full-time and four part-time people altogether.

    What would induce the retail chain to hire more people to work that store?

    Let's consider two scenarios, one going off the conservative argument that the retail chain's owners are "job creators," and the other going off a different idea.

    Suppose that the retail chain's corporate taxes are cut by enough that the increase in after-tax profit is sufficient to cover the salary of one more full-time employee. According to the arguments of conservatives, the retail chain, relieved of its crippling tax burden, will go right out and hire a new person with that money.

    So a new employee starts. But the store's traffic was already being handled just fine by the employees it already had, so there really isn't anything for this new person to do. He twiddles his thumbs, shuffles paper, sweeps an already-clean floor, plays games on the store computers, or takes over tasks that were formerly done by the other employees, leaving them with nothing to do.

    Sure, that's how businesses operate, right? They hire people they don't need because they have the money to do it, so if we just let them keep more money instead of depressing the economy with them stupid darn lib'rul taxes we'll see lots of those unemployed people hired to do nuthin.


    Here's another idea. Maybe this comes a little closer to reality.

    Instead of cutting the store chain's taxes, the government takes a number of steps to boost the incomes of people who don't own retail chains or other major businesses. That might include raising the minimum wage, encouraging the formation of labor unions so as to boost wages, cutting taxes for working-class people, or any of a number of other possibilities aimed at boosting the incomes of those who are not, in Conserva-speak, "job creators." And let's say that in the town where our store is located, some five thousand of these non-job-creators have enough more money as a result that they rise into the income space where they can afford to be customers of that store, where before they could not.

    Suddenly the store has a lot more customers buying a lot more of what it sells. It frequently runs out of merchandise because it doesn't have anyone responsible full-time for keeping the shelves stocked and the manager is too busy handling customers. It becomes crowded with customers during its open hours because it has more of them than its time and space can handle efficiently, resulting in a reduced-quality buying experience. The employees now have no down time at all and are tearing their hair out and getting pissed off at the company.

    Hmm, says the district manager when she makes her next inspection, it's great that we're making all this extra money from the increased sales, but maybe we need to do something about this crap. And so she recommends that they keep the store open longer hours and an extra day, making it seven days a week. More personnel are hired to keep the store open, as well as relieving the manager of some of her sales duties so she can concentrate on administrative things like keeping the shelves stocked.

    And I suggest that this, not my first scenario, is how business really operates and why people are hired. The "job creators" are not the people who sign the paychecks, but rather the people who spend the money buying things that will cause the people who sign the paychecks to see a need to hire more people.

    Business doesn't hire people because money burns a hole in their pockets. Business hires people because money burns a hole in their customers' pockets. The real job creators aren't the owners of a business, but its customers. If you want to create jobs, don't give money to, or cut taxes for, the rich. Give money to, or cut taxes for, the non-rich.

Share This Page