Thursday, November 18, 2010
(graphic: SouthernKathy)
Businesses do not create jobs, says Dave Johnson at Campaign for America’s Future who sees companies as an enemy of employment.
“Businesses have more incentives to eliminate jobs than to create them,” argues Johnson. “Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost. They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing or finding other ways to reduce the payroll.”
Given this proclivity on the part of the private sector, Johnson says it’s a waste of money to provide tax breaks to businesses.
What really creates jobs is demand for a product or service. Notes Johnson, “A job is created when demand for goods or services is greater than the existing ability to provide them.” If a business can increase its profits by hiring more employees, only then will it do so. Thus what most efficiently creates jobs is not giving businesses more money through tax breaks, but giving customers the money to buy more products and services.
Government helps business by creating “the infrastructure of roads, schools, courts, etc. that is what makes our businesses competitive with businesses in other countries.”
-David Wallechinsky
Businesses Do Not Create Jobs (by Dave Johnson, Campaign for America’s Future)
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