It's All About Demand

This is the third in a series.
We left off with the real key to job creation.  Demand.  Remember your widget company and the tax cut you received "to create jobs"?  Well, in reality, the only time you are going to hire additional workers - AKA create jobs - is when you need to produce more product.  In your case that would be widgets.  The only time you are going to hire a new widget maker for your business is when DEMAND outpaces PRODUCTION.  Right?  And it can't be for, say, if demand goes up to 105 widget per week.  You can probably cover the extra 5 widgets with a little over-time.  This is still cheaper that hiring someone and having even that additional 5 extra widgets that you have to store every week.  

In fact, you could probably institute some new procedures that, with the extra over-time, will enable you to produce, oh, say, 115 widgets per week.  And it's really not taking much from your bottom line.  Just that little bit of OT.  The real fact of the matter is that you are just NOT going to hire a new widget maker until the demand for your widgets is high enough that you can no longer meet that demand with your current staff.  Then and ONLY then will you hire that new widget maker.


As a business man, hiring new staff is the LAST RESORT.  That's it!  Think about it.  Really think about it.  The "job creators" have had 10 years of tax cuts and I ask you, WHERE ARE THE JOBS?  If tax cuts create jobs we should have every American who wants a job employed today.
But we don't.


I don't know about you, but I just don't see the relationship.  Nope.  Just don't see it.


We, you and me, the American Middle Class, are the real job creators.  Cut OUR taxes.  Put more dollars in OUR pocket and we are going to spend it.  Most of us have to just to survive!  There's a reason why savings is at an all time low - but that's a topic for another day.


Face it.  The Republicans are just plain wrong about this.  They just will not not screw the 1% that is paying their way.  


If you don't believe me.  Check out this guy.

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.

Bad Jobs Report but Good News Too?

This is the first in a series about jobs and job creation.
  
Last Friday the Labor Department released the latest report on job creation and the news did not look good.  It showed another month of weak growth as only 80,000 jobs were created closing out the weakest quarter of job growth since 2010.  Predictably, Republicans were quick to pounce on this with Mitt Romney calling it "a kick in the gut".  According to the Wall Street Journal, however, there were actually some encouraging signs if you really looked into the data.