You can't get very far in watching the presidential primaries without hearing this line: "we've got to help the job creators."
Well, of course. We all need jobs. Just look at the unemployment numbers, the grim projections, or the people who aren't even counted as unemployed any more because they've given up. Who wouldn't want to help the job creators?
But the way the debate is shaping up, "job creators" translates as "rich people." We act as though income tax rates are the only factor in whether people get hired or not. And that's not the right way to think about the jobs crisis.
The fact is, we're all job creators: the richest and the poorest of us. It's just a matter of degree.
The struggling worker buying bread at the bodega, the middle-class couple who hire a baby sitter for the evening so they can go out to dinner and a movie, and the banker bringing another gardener to shape interesting topiary are all putting money into the economy. That's how the bodega clerk, the baby sitter and the gardener get their jobs. If the wealthier person hires a gardener, a housekeeper and private tutors for her children, then yes, she's putting more money into the economy than the person at the bodega.
If it comes to that, we're all job destroyers, too. If you've switched from DVD rentals to streaming video, or from CDs to an iPod, you've helped put a video or music store clerk out of work. We're all a part of "creative destruction." The corporate executive who lays off hundreds or thousands of workers has a bigger share of that, as well.
But the real engine of job creation isn't consumption; it's creativity.
It's new businesses, new products, new ideas that really drive job creation. A study by the Ewing Marion Kauffman Foundation reportedthat two-thirds of new private sector jobs are coming from businesses that are between one and five years old. Federal statistics show there are 3.7 million firms with 10 employees or less. That's a major reason why economists talk about the value of small business to the economy. New businesses start out as small businesses. If they've really got a good idea, good luck and good leadership, they grow into big businesses.
This is where not all rich people are created equal, because they're not all creating anything. Bill Gates and Kim Kardashian both create jobs by spending their money, but Bill Gates isn't more valuable to the economy just because he spends more with quiet good taste. He's more valuable because he built Microsoft, a company that does billions in business, employs thousands of people, and helps millions more work more effectively.
If we're talking about the rich as job creators, then we have to acknowledge that not every rich person is creative. Even the Kardashians are at the upper end of the creativity scale; after all, they do have a production company and assorted business ventures. But simply consuming more and spending more shouldn't earn you a job-creation medal. The owners of the new restaurant on the corner or the startup in the downtown loft may be doing as much or more for the economy than a wealthy person who's just a consumer of luxury goods. They may even be doing more than the CEO of an established company, if their business is growing and his isn't.
If everybody is a job creator, then almost any economic policy that encourages spending will create some jobs, whether it targets the rich, poor or the middle class.
Not everyone is an innovator, however. From the personal computer to the single-handled faucet, it's innovation that pays off big when it come to jobs. And innovators don't always start off rich. To assume that rich people are creating products, opening markets or even building on what they have simply because they're rich is laughable -- and dangerous.
The challenge for job creation is to craft policies that encourage the people who will take that encouragement and run with it. The debate we should be having is not where taxes should be high or low, or whether Wall Street is good or bad, but how do we craft tax policies and credit markets that reward those who are striving to come up with something new -- and not those who are resting on someone else's laurels.
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Some say if you increase taxes on the rich, a.k.a. "job creators", they won't have money to create jobs. They are saying, "let me accumulate lots of money at a low tax rate and (maybe) I will create jobs".
However, business expenses are tax deductible. So if their desire is to create jobs (it isn't), they can do so tax free. Perhaps even getting a tax credit for so doing.
How does a higher tax rate on the 1% inhibit job creation?
Bush tax cuts, which is giving the USA some growth, left the USA with 5% unemployment before the credit crunch, lower than ANY other G20 country. Thats with the US having the highest immigration in its modern history during that time.
Tax cuts are not a cure all, but they DO create jobs.
for last four years now.
Accumulate Capital and business starts increase, waste Capital and they decrease.
There are many Entrepreuners, limited Capital. There should really be NO Capital Gains Tax,
it only destroys Jobs !
You want to know who the job creators in this country are? It's us, the American people, the CONSUMERS. Our demand for goods and services creates jobs in this country. If more of us are forced to consume less because we are making less wages (or making no wages at all) then demand remains low and businesses don't hire. It's really simple...and it's very insulting how the GOP wants us all to believe that only the wealthy create jobs. They might have all the money in this country right now, but it's not like they can spend enough of it all by themselves to make up for what the rest of us have lost.
Bush tax cuts are still in place, and they have created the growth we have now.
Look at Europe they raised taxes and now cannot grow, no one will hire, no one will spend. They are finished.
I dislike the culture of Republicans, but tax cuts DO create jobs.
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That just shows how the conservative mindset is still stuck in the age of fedualism, when the job creators indeed were the rich people (though the jobs were more like slavery).
Today, most people who are not self-employed work for a business entity that is owned by many individuals. And when the business entity is so small that it is owned by one person, that person could be wealthy but could also be desperately poor (i.e. deeply in debt), but it doesn't matter. It doesn't matter because it's not the business owner's money that pays the salaries. It's the business revenues that pay the salaries.
How do "poor people" hire anyone?
No one starts a business without some resources. Those with little cash but a useful skill start one-person home businesses. They don't employ others until they've built up enough clientele that they can't do all the work themselves and have figured out how to charge enough to employ an extra person or two.
Those with more money or assets or a business plan that satisfies the bank start bigger, of course. Not very big, because about a third of all new businesses that fail do so because they overextended.
I think it's terribly said that you need someone to explain this to you. You must be a libertarian.
On the other hand, companies that have been around for a while may not be hiring as much because they already have employees that are doing their jobs. They might be "creating jobs" at a slower rate, but at least companies that are lets say 10-20 years old are also less likely to destroy jobs.
What is important to study is which sector of the economy is most "responsible" with their jobs. Which companies create jobs and also retain them? Are there any correlations with the success of start-ups and the status of the economy?
BUSINESSES create jobs.
Non-government JOBS are ONLY created by these businesses and corporations in order to CREATE WEALTH for those same businesses and corporations!