Who are the Job Creators?

[DanaC]

Found this really interesting little TED talk by Nick Hanauer, which tackles some of the current calls for low taxation on 'job creators'; or rather the notion that by taxing business owners jobs will be put at risk.

[Cyber Wolf]

I've always considered the people who create a demand for a product/service are the job creators, not the people who start a business to fill it. Without the demand, the business wouldn't be there.

Lower my taxes!

[Ibby]

Originally Posted by Cyber Wolf

I've always considered the people who create a demand for a product/service are the job creators, not the people who start a business to fill it. Without the demand, the business wouldn't be there.

Lower my taxes!

PINKO COMMIE MUSLIM SOCIALIST TRAITOR!

[Cyber Wolf]

Originally Posted by Ibram

PINKO COMMIE MUSLIM SOCIALIST TRAITOR!

You forgot UN-AMERICAN!

[BigV]

The speaker in your video is right on target DanaC. Right on target. He's not the first to make such an observation, nor was I. Tax cuts do not create jobs. Demand creates jobs. Naturally, business being going concerns, have expenses and reducing expenses makes the going of such concerns smoother. Taxes are a kind of expense, reducing that expense, like reducing other expenses can improve the profitability of the business, but it can't create a job. Those that say so are just making up a story to justify their position of wanting the tax break. Business want profit, and that's ok. Wanting more profit is ok. Lying is not ok, making up shit is not ok. Deceiving people is not ok.

Originally Posted by BigV

]I do believe that the private sector has vastly more potential to reduce unemployment by hiring more people than the government does. Yes, it's true that the single largest employer is government, but it is dwarfed by the aggregate private sector. That private sector though is made up of many many individual employers. Those individual employers don't have the same motivations to hire that the government does. A private employer hires someone new when the demand for work exceeds their ability to do that work with the staff on hand.

Let me repeat that. Employers hire new people when they can't deliver all the work they have with the staff they have. It is demand driven. I heard a small business owner say it this way this morning: "I hire someone when I'm working 90 hours a week. That's when it's time to hire someone new." That makes total sense to me. A tax credit/benefit/break/doodad that slightly reduces the cost of a new employee (which can be high, one of the MAIN REASONS that an owner will work 89 hours a week before deciding to actually hire a new worker) has an effect, but it is marginal at best. Sadly, that's how things work between government and business. Government (which does have an explicit interest in reducing unemployment) wants more people working, but depends on business to hire those people can only use incentives and disincentives to guide, to urge, to encourage such behavior. But look back a couple sentences...a business hires primarily based on demand, not on minor reductions of the expense of hiring. The government's ability to effect and affect such actions is indirect at best. But they sure get all the heat for the lack of success of such actions.

[monster]

Litter louts are job creators.......

[Clodfobble]

My kids create jobs for me all day long....

[monster]

Does anyone pay you for that so you pay taxes, though? If not, what you do is not important

[tw]

'Job creator' defines activity contrary to popular belief. For example, jobs are created when a company does the same work with less people every year. If not, then jobs are lost.

Those who rationalize by soundbytes never get it. Somehow they assume jobs are created when more people do the job every year. Using their reasoning, then we simply remove all computers from telephone switching centers. Replace those computers with human operators. And have created jobs. A massive GDP increase. Full employment. And then massive recession more than four years later.

Jobs are created when work requires less people. A bean counter has no idea what that means. He downsizes - fires employees - to cut costs. That is contrary to what was posted - create jobs by doing the same work with less people. The bean counter, who is trained to ignore underlying facts, only destroys jobs.

If the work is done by less people every year, then jobs are created. A bean counter, using his perverted business school training, then reverses that equation. If A creates B, then B must create A? Bull. He is taught that lie in business school. Therefore does not understand: jobs are created when less people do the work. But less people doing the work does not create new jobs. A causing B does not mean B causes A.

What creates new markets, wealthier employees, new and better products, reduce costs, and economic prosperity? Innovation. Innovation (not downsizing advocated by the perverted bean counter) is why less people do the work every year. And therefore more jobs are created. Innovation means more jobs than people available to fill them. And less people doing the same work every year.

Throwing money at something never creates innovation. But that is preached on Wall Street due to myths taught in business school. Innovation requires money. But money does not create innovation. A creating B does not mean B creates A. Throwing money at a company to make jobs does not create innovation and does not create jobs. Need an example? Eastman Kodak was given all the money they wanted to create buggy whips. Where are the jobs?

Throwing money at something to create innovation (ie Kodak, Chevy Volt, Big Pharma, Fiorina's purchase of Compaq, George Jr's tax cuts) means no innovation and less jobs.

The common factor is something that can never be quantified or understood using soundbytes, business schools, or political spin. Only innovation creates new jobs. The rich do not innovate (except by inventing lies on spread sheets).

A recession destroys jobs. Mostly unproductive jobs. Many employees must remain unemployed until innovations create the new products and therefore new jobs. Therefore employment lags economic growth by months or years.

The American economy has been growing strong for a few years now. We averted 40% unemployment by restoring fiscal management. But employment will take much longer. It takes a long time for innovation and the resulting new products to create jobs. Especially since George Jr’s people subverted or outrightly destroyed so many innovation centers. Especially when jobs in 2000 and after were created by fraud, lies, money games (ie GM's 0% financing), and business school spin.

Recessions created by finance people meant many unproductive jobs created since 2000 must be destroyed. Too many jobs created in 2000 were scams. Those jobs were unproductive then. The bills for unproductive jobs have now just arrived. Welcome to why the average American now earn significantly less money than in 1996.

How long does it take to design anything? Four to ten years. Therefore it can take four to ten years for new products to finally employ all those unemployed workers. Only innovation creates jobs.

Who creates innovation? Definitely not the rich despite lies told to Tea Party and other less educated people. Nick Hanauer is saying what was posted in the Cellar posts back in 2002. Defined was how jobs would be destroyed. See previous discussions about the Kennedy Tax Cuts and how wars (ie the Pearl Harboring of Iraq) destroy jobs seven years later. It was predicted then. We have reality - the predicted job losses.

The rich never create jobs. The rich do not innovate - despite so many George Jr administration lies that say otherwise. Despite those lies parroted by the Tea Party, et al.

Jobs are created only when less people do the same job every year.

[TheMercenary]

All out country needs is more illegal aliens. That should create some jobs...

[Stormieweather]

Originally Posted by tw

Jobs are created only when less people do the same job every year.

I don't get it. Maybe because I'm a "bean counter"?

But it seems to me, and from my observations, that if less people do the same job every year, then job hunters are created, not jobs. Let's use my company as an example...

In 2007, my employer has 4 accountants and each one is responsible for 7-8 real estate properties. In 2012, we have 3 accountants, and now each one is responsible for 18-20 properties (many of them the same properties as in 2007), and none have had a raise since 2008. They are working more than twice as hard, for the same money, we have less overhead (benefits, computers, desk space, etc.) and are making more money than ever. And we have one accountant out of work, out there hunting for a job.

So how did we create jobs?

Is your assumption that the unemployed accountant won't be able to find work, so he'll "innovate" and "create" and make some sort of opportunity for a new job?

From my perspective, he/she actually goes broke and ends up destitute and bitter. And the remaining employed accountants are resentful and poorer than ever, since insurance, daycare, transportation and living expenses have gone up by the boatload, but their income has not. The only truly satisfied person in this scenario is the company owner, as he is earning more money than ever before...what with his reduced overhead and taxes and increased income.

[xoxoxoBruce]

But Stormie, while it appears the owner is making more money his costs have risen too... do you realize what a politician costs these days?

[tw]

Originally Posted by Stormieweather

Is your assumption that the unemployed accountant won't be able to find work, so he'll "innovate" and "create" and make some sort of opportunity for a new job?

That is one of over 100 different possibilities. After all, accountants are overhead. Do not produce a product. Less accountants needed in the world means a more productive world.

So how does an accountant handle more properties? Well, in the 1900s, we invented telephones. Suddenly the accountant could do most work from his desk. Not constantly travel the factory or streets to do his job. Innovation. The reason a job that once took four accountants now takes three? Innovation. The accountant is empowered to do less labor while managing more properties.

Why are banks adding service charges? They will not innovate. Banks have the same people doing the same job. And must now soak customers via service charges because they still using the same number of people. Are harmful to the economy.

It the accountant goes broke or destitute, then he is not the type of person that free market economics empowers. He should be moving on from accounting to something more productive. To take his accounting experience with him to a new job in another company. Or create a business. That never happens when jobs are done with the same people every year.

Meanwhile, bean counters at Exxon decided to do the work with less people. Their shipping division reduced employees from 180,000 to 80,000 in a decade. While not implementing necessary innovations. As a result, an exhausted crew eventually crashed the Exxon Valdez onto rocks. That happens when productivity is generated by spread sheets and bean counters. Not by people who come from where the work gets done.

If an accountant could only handle 7-8 properties ten years ago and can only handle 7-8 properties today, then the company may be approaching bankruptcy. Innovations were not implemented due to a business school 'cost control' mentality. A greatest impediment to innovation is management that does not come from where the work gets done. That, instead, comes from business schools.

GM once proudly announced that every part in a car was made and assembled in 120 man-hours. Meanwhile, Toyota and Honda were doing it in 60 man-hours. Why were the latter more reliable, cost less, and superior? Because latter manufacturers innovated. Therefore were the patriotic companies that America needed.

GM later announced they had gotten their man-hours down to 70. Meanwhile Honda and Toyota were believed to have been building and assembling every part in only 30 man-hours. Therefore GM (many decades ago) was obviously headed for bankruptcy (as I was so blunt about that long ago). Because GM was unproductive. They assembled a car with too many people. Then blamed unions for not working hard enough. Unions did not stifle innovation. Only reason for failure was top management - who did not even have driver's licenses.

You don't become productive by dumping more work on each employee - as business school graduates assume. Innovate so that each employee does more work using less labor. That, BTW, was the lesson from William Edward Deming's famous bead experiment. Now located in the Smithsonian.

That lesson was also from Frederick Winslow Taylor in the 1910s. By simply empowering workers with knowledge, then two men who once took eight hours to load scrap steel in a rail car, instead, did the job in only two hours. By simply taking breaks at specific times. Another example of innovation.

Jobs are only created only when existing work is done with less people every year.

[Stormieweather]

Actually, my co-workers and I do produce a product. We produce financial statements used by banks and investors to determine asset viability.

Some of what you say is accurate, we do work more efficiently now than we did 5 years ago, but we also work much more stressfully, with absolutely no room for creativity. It's all production. And the profit margin on our 'product' is much higher than it was 5 years ago.

Unfortunately, none of that profit margin has been translated into increase paychecks for the workers, and our quality of life has decreased. We are spending less on entertainment and clothing and food and other necessities.This translates into less profit for all of those who provide those products. Not more demand or jobs...

So maybe the company owner can afford an extra pool boy or another pilot for his private plane? Those are jobs...

[tw]

Originally Posted by Stormieweather

Unfortunately, none of that profit margin has been translated into increase paychecks for the workers, and our quality of life has decreased.

GM decreased the man-hours from 120 to 70. Therefore profit sharing was reduced to near zero. Why? GM did not innovate enough. Their product prices increased relative to a free market.

Why? Because Roger Smith spelled the word "employe" in the tradition of Dan Quayle. Because top management blamed unions rather than the 70 HP/liter engine stifled by top management. A short list of the thousands of reasons why a GM car needed two or four extra pistons.

Your productivity can increase. But what did the competition do?

You produce a financial statement. So how does that make a factory more productive or create new products in Wal-Mart or Tesco? Is it the overhead we need so that finance people don't create more fiscal disasters? To your company, it is a 'product' that is so important. But to the economy, it is the unproductive overhead. The word perspective applies.

Productivity is also about eliminating overhead whenever possible. That also creates jobs (as demonstrated by telephone exchanges replacing operators with computers). But, as we know, if we eliminate overhead such as Securities and Exchange investigators, the consequences are disastrous.

Only you or your customers can report how important your job really is. But then that is when and why free markets work. Those who do the work should make decisions. Unfortunately business schools teach that people without any such knowledge should be paid more and make all decisions (also called communism). And so we have a massive recession and the resulting job destruction.

It will take years or a decade of innovation to create new and productive jobs WHILE we also pay for scammers who created Mission Accomplished, welfare for the rich, McMansions, Constellation Aries and Orion, Bernie Madoff, and other debts.