The REAL Job Creators

This is the second part in a series.


I don't know about you, but I am soooooo tired of the term "job creator".  Every time I hear it I feel like I want to throw up.  I mean, really.  Listen to any Republican talk about unemployment or tax increases and invariably they will use the term when talking about the upper 1%; the very wealthy of this country.  


And they repeat it and repeat it and repeat it and.... Well, you get the idea.


It's all part of their strategy.  If you repeat a lie enough times, people will eventually accept is as the truth.  


So let's examine this concept of the 1% as job creators further.


Let's say that you own a business manufacturing those widget thingies that are in such demand.  You employ 10 people who each work 40 hours a week and are able to produce the 100 widgets each week that you need to meet that great widget demand.  Now, some politician decides that if he cuts your taxes that you will take that extra money, that cash, that wind-fall of moolah and put it into your business and use it to create a job.  You are going to hire a new employee.  Yep, that's what you are going to do.  Right?


My question to you is.... Why would you?


You are selling 100 widgets a week and your current staff of 10 is manufacturing 100 widgets a week so what is that extra person going to do?  Being an experienced widget maker (why would you hire anyone else?) he is going to produce an extra 10 widgets every week.  Now your widget factory is producing 110 widgets a week.  But that's a problem because demand is still 100 widgets a week.  What are you going to do with those additional 10 widgets?  You run a tight ship so you don't have much storage room - never needed it.  Damn.  You might even have to consider a move to a larger space just to have room to store the extra inventory.  Hmmmmm... This isn't working out so well.  You are paying this new guy a salary plus a generous benefits package and now you may have to move to larger quarters because you need the extra space to store all those widgets he's making that are piling up.  This job creating can really cost you!


The answer to my question is that you wouldn't.  You are going to take that extra cashola wind-fall and and put in into your pocket.


Here's the thing that the Republicans just don't get about job creation.  Here's what they continue to ignore.  Here is the secret to real job creation:  


Demand.

More about how that works in my next blog.  Stay tuned.