"A poor person never gave me a job!"

[kimmy]

"A poor person never gave me a job" is a catch-phrase that's going around in US politics lately, an idea that is supposed to convince people that tax cuts for the upper class are good for everybody.

But the idea that "a poor person never gave me a job" is deeply flawed.

For most employers in America, their ability to stay in business and hire people depends a lot more on the spending-power of lower and middle-class Americans than it does on the wealthy.

And I think the idea that rich-people give people jobs bears more scrutiny.

-k

[bleeding heart]

I also think it's unwise, politically, to use language that seems (whatever the intent) to be so charged. I don't think people mean it as some sort of critique of the poor, but it can sure sound like it to a lot of people, I'd wager.

Edited September 1, 2012 by bleeding heart

[Canuckistani]

Wouldn't it be nice to have all the working poor be able to go on strike for a bit. The howling and gnashing of teeth of the middle and upper class would be deafening. Not only that their wallets would take a big hit, but all the jobs that wouldn't get done all of a sudden.

[TimG]

For most employers in America, their ability to stay in business and hire people depends a lot more on the spending-power of lower and middle-class Americans than it does on the wealthy.

Part of the problem is this is no longer true. Many businesses depend more on international sales than on US sales now. Many of the 1% don't really make their money from the US even if they are resident in the US.

[Canuckistani]

Part of the problem is this is no longer true. Many businesses depend more on international sales than on US sales now. Many of the 1% don't really make their money from the US even if they are resident in the US.

Balance of trade for US?

[TimG]

Balance of trade for US?

The balance of trade says foreign companies depend on the American middle class for their sales.

Hollywood is a good example:

By the early 2010s, international sales accounted for approximately 69 percent of box office sales, which reached $32.6 billion worldwide.

http://business.highbeam.com/industry-reports/personal/motion-picture-video-tape-distribution Edited September 1, 2012 by TimG

[Canuckistani]

So other countries depend on the US middle class for sales, but the US companies don't? Does that make sense. What proportion of US economic activity is exports? I thought the US had priced itself out of the export business.

[Wild Bill]

We can debate this premise all we want but as a Utilitarian I think it can be resolved very simply.

If you think the statement untrue then name 3 poor people you know that gave you a job.

Even more simply, name 3 poor people you even heard about that gave ANYONE a job!

It's as simple as that.

[Canuckistani]

We can debate this premise all we want but as a Utilitarian I think it can be resolved very simply.

If you think the statement untrue then name 3 poor people you know that gave you a job.

Even more simply, name 3 poor people you even heard about that gave ANYONE a job!

It's as simple as that.

sometimes simple = simplistic. I think this may be one of those times.

[bleeding heart]

sometimes simple = simplistic. I think this may be one of those times.

I agree. I also question what I think is an implied corollary here; that somehow, we owe "rich people" something, as if they need to be rewarded for their contributions to society.

The riches are the reward. What else can one demand? Love and adoration from everyone else?

And Rush Limbaugh and the Koch brothers aside, most rich people would think this an uncontroversial truth.

Edited September 1, 2012 by bleeding heart

[Moonlight Graham]

"A poor person never gave me a job" is a catch-phrase that's going around in US politics lately, an idea that is supposed to convince people that tax cuts for the upper class are good for everybody.

But the idea that "a poor person never gave me a job" is deeply flawed.

For most employers in America, their ability to stay in business and hire people depends a lot more on the spending-power of lower and middle-class Americans than it does on the wealthy.

And I think the idea that rich-people give people jobs bears more scrutiny.

Exactly Kimmy. The rich have their place in the economy by creating innovating business and investing capital. However, the economy is mainly fueled by consumption of the majority, not the consumption of the rich (who also keep their money locked in bank account much more so than the poor/middle-class).

Henry Ford knew this, and even though he could pump out a lot of cars off the assembly line, he saw that most of his workers couldn't afford these cars and therefore Ford's profits weren't reaching their potential. So Henry raised his workers' wages so that they could afford the cars they produced, and Ford's profits and sales increased and employment at Ford increased thus general wealth increased for all. This principle is called Fordism.

If you want to create more wealth/GDP, and you want to decrease unemployment, why not redistribute more money to the poor/middle classes, via wages or whatever means? This would mean a higher standard of living for them, meaning they are buying/consuming more, meaning more jobs are created to meet this demand, meaning the rich very likely benefit from this too in the end. It's like a circle of spending/consumption by the middle/lower class majority and profits for the rich, then redistribution of some wealth back to the middle/lower classes and then they spend/consume more etc. and the cycle perpetuates.

Edited September 1, 2012 by Moonlight Graham

[kimmy]

The balance of trade says foreign companies depend on the American middle class for their sales.

The balance of trade also says that American companies depend on the American middle class for their sales.

Hollywood is a good example:

http://business.highbeam.com/industry-reports/personal/motion-picture-video-tape-distribution

Most Americans don't work for Hollywood. Most Americans work for businesses that sell goods and services in their own communities.

-k

[kimmy]

We can debate this premise all we want but as a Utilitarian I think it can be resolved very simply.

If you think the statement untrue then name 3 poor people you know that gave you a job.

Even more simply, name 3 poor people you even heard about that gave ANYONE a job!

It's as simple as that.

Working with builders, I have worked on a couple of multi-million dollar residences, but most of the homes I have worked on have been more affordable "middle-class" residences and multi-unit residential buildings.

During my many years waitressing, I can assure you that the large majority of my customers have been lower and middle class.

When I worked in family dining and fast food, once again, most of my customers were lower and middle class. When I worked in retail, again most of my customers were lower and middle class.

Without lower and middle class customers, none of the businesses that I worked at would have stayed in business. Period.

If I recall, Bill, you used to play live music in bars. When you looked out at the audience, how many rich guys did you see, and how many average joes did you see? Are you sure a poor person never gave you a job? Was the guy who hired you for the gig a rich guy? Was he hiring you to play for an empty room, or did he assume there'd be customers?

-k

[cybercoma]

"A poor person never gave me a job" is a catch-phrase that's going around in US politics lately, an idea that is supposed to convince people that tax cuts for the upper class are good for everybody.

But the idea that "a poor person never gave me a job" is deeply flawed.

For most employers in America, their ability to stay in business and hire people depends a lot more on the spending-power of lower and middle-class Americans than it does on the wealthy.

And I think the idea that rich-people give people jobs bears more scrutiny.

-k

Another flaw in the argument is that the rich person, who's giving out jobs apparently, didn't get rich without the poor person's labour. So in that sense, the poor person gave them their job otherwise they wouldn't have a business to run.

[dre]

"A poor person never gave me a job" is a catch-phrase that's going around in US politics lately, an idea that is supposed to convince people that tax cuts for the upper class are good for everybody.

But the idea that "a poor person never gave me a job" is deeply flawed.

For most employers in America, their ability to stay in business and hire people depends a lot more on the spending-power of lower and middle-class Americans than it does on the wealthy.

And I think the idea that rich-people give people jobs bears more scrutiny.

-k

Nobody with even a basic understanding of market economics believes any of this shit. When there is demand businesses will cash in on it and there will be supply. The ammount of jobs in an industry is determined by aggregate demand, and that demand is what causes labor to be marshaled.

The irony is that the same people promoting the "job creators" fallacy, will in the next breath start going on about the "free market".

To believe all this you would have to believe for example, that an oil worker has a job not because theres demand for oil, but because the company that hired was kind enough to "give" him a job. It should be obvious to pretty much anyone that this is ridiculous.

Edited September 1, 2012 by dre

[TimG]

Most Americans don't work for Hollywood. Most Americans work for businesses that sell goods and services in their own communities.

You mean Walmart? The biggest employer in many US towns. 25% of its sales and most of its growth come from outside the US. Small businesses owners are usually middle class themselves.

The reality is most companies need cheap labour to produce their goods and a well off client base to buy them. In international trade provides this for them and as trade makes countries like China wealthy the increased middle class in China and elsewhere can easily make up for reduced growth in the US.

My point was and remains: corporations are no longer tied to the welfare of the middle class in any single country. They need a market to sell their products but don't really care where this market is. If that markets shifts to another country then they will follow and profits will grow as long as the global economy is growing.

Edited September 1, 2012 by TimG

[Shady]

"A poor person never gave me a job" is a catch-phrase that's going around in US politics lately, an idea that is supposed to convince people that tax cuts for the upper class are good for everybody.

I don't think it's to convince people that tax cuts for the upper class are good for everybody. At least that's not how I interpret it. I take it as more of an attempt to combat some of the knee-jerk reactions of the "let's stick it to those rich folks" crowd. I also get a bit tired of the upper class, middle class, lower class talk. We don't live in a class system. People constantly change tax brackets and income levels at various points in their life, and just because one is born in a lower income situation, doesn't mean that they're stuck there for the rest of their life. But that may be for a different discussion, I don't wanna hijack the topic.

And I think the idea that rich-people give people jobs bears more scrutiny.

-k

Fair enough.

[Canuckistani]

Another flaw in the argument is that the rich person, who's giving out jobs apparently, didn't get rich without the poor person's labour. So in that sense, the poor person gave them their job otherwise they wouldn't have a business to run.

Well put. I was going to say something similar. The working person gives their time and effort, what's more valuable than that?

[Canuckistani]

You mean Walmart? The biggest employer in many US towns. 25% of its sales and most of its growth come from outside the US. Small businesses owners are usually middle class themselves.

The reality is most companies need cheap labour to produce their goods and a well off client base to buy them. In international trade provides this for them and as trade makes countries like China wealthy the increased middle class in China and elsewhere can easily make up for reduced growth in the US.

My point was and remains: corporations are no longer tied to the welfare of the middle class in any single country. They need a market to sell their products but don't really care where this market is. If that markets shifts to another country then they will follow and profits will grow as long as the global economy is growing.

Oh, come on. Wall Mart is the biggest employer in many US towns exactly because it is selling to low income people that live there. That's the whole Wal Mart method of operation, selling to low income people. Yes Wal Mart may have operations outside of the US, what how many jobs does that create within the US? And Wal Mart of course is a good example on how to get rich by not giving jobs to Americans, by outsourcing its suppliers to other countries. Very clever - bust the middle class so they can't afford not to shop at Wal Mart.

[dre]

You mean Walmart? The biggest employer in many US towns. 25% of its sales and most of its growth come from outside the US. Small businesses owners are usually middle class themselves.

The reality is most companies need cheap labour to produce their goods and a well off client base to buy them. In international trade provides this for them and as trade makes countries like China wealthy the increased middle class in China and elsewhere can easily make up for reduced growth in the US.

My point was and remains: corporations are no longer tied to the welfare of the middle class in any single country. They need a market to sell their products but don't really care where this market is. If that markets shifts to another country then they will follow and profits will grow as long as the global economy is growing.

Ok, but that argument is not germaine to the origional point. Regardless of what country the demand is in, its STILL that demand that causes labor to be combined with materials. So your points while essentially correct do nothing to strengthen the "job creators" fallacy.

The other thing to consider is that domestic consumer spending is becoming MORE important to the Canadian economy not less.

What stands out from an examination of the macroeconomic data is that the Canadian economy is increasingly becoming disproportionately dependent on both consumer and government spending. As a share of the economy, consumer spending is now at a record high and accounts for 64% of Canada’s GDP (see Table 1). In fact, the share has been rising every single year since 2000 and currently is up a whopping eight percentage points from a decade ago.

So your suggestion that foreign markets are surplanting domestic demand is the opposite of true. As a percentage of GDP exports have PLUNGED in the last decade more than 11%.

Canadian businesses are more dependant on Canadian consumers than ever before.

[Canuckistani]

Remember we're talking American business here, but I'm sure the situation is similar to Canada.

[Wild Bill]

Working with builders, I have worked on a couple of multi-million dollar residences, but most of the homes I have worked on have been more affordable "middle-class" residences and multi-unit residential buildings.

During my many years waitressing, I can assure you that the large majority of my customers have been lower and middle class.

When I worked in family dining and fast food, once again, most of my customers were lower and middle class. When I worked in retail, again most of my customers were lower and middle class.

Without lower and middle class customers, none of the businesses that I worked at would have stayed in business. Period.

If I recall, Bill, you used to play live music in bars. When you looked out at the audience, how many rich guys did you see, and how many average joes did you see? Are you sure a poor person never gave you a job? Was the guy who hired you for the gig a rich guy? Was he hiring you to play for an empty room, or did he assume there'd be customers?

-k

Mixing owners and their customers together is not fair to the argument, Kimmy. It could be said that most rich people own companies that produce goods bought by consumers. That doesn't mean that consumer directly gave the workers in those companies jobs. The owner did.

My next door neighbour drives a Ford. Can he hire me to work at Ford?

As for the bar scene, when I was there things were much different. Club owners made money! Patrons had enough disposable income to go drinking and dancing 7 nights a week. Those days are long gone.

You have reminded me of a example based on playing music that does fit your argument though, Kimmy. Busking! Playing on street corners! People stroll by and drop money in your hat, or more commonly your guitar case. Often that would be a case of the poor hiring the poor, although perhaps this is really just common charity and not hiring and paying for a service.

[TimG]

And Wal Mart of course is a good example on how to get rich by not giving jobs to Americans, by outsourcing its suppliers to other countries. Very clever - bust the middle class so they can't afford not to shop at Wal Mart.

Which is my entire point. The idea that corporate profits are some how linked to the well being of the US middle class is a myth.

[dre]

It could be said that most rich people own companies that produce goods bought by consumers. That doesn't mean that consumer directly gave the workers in those companies jobs. The owner did.

If you believe that then you simply dont believe in the law of supply and demand. Labor and materials get combined into goods because theres demand for those goods. Ford hires workers when demand for their automobiles is increasing and they lay them off when demand is decreasing. So its a complete fallacy to attribute the creation of those jobs to Ford. The marketplace is the causative factor in the existance of those jobs.

[cybercoma]

My next door neighbour drives a Ford. Can he hire me to work at Ford?

Can Ford hire you for a job if your neighbours didn't drive their cars?