"I've never been hired by a poor person."

[DarkPhenyx]

"Only the rich can provide jobs, so it makes sense to give them the benefits of a tax cut."

Two quotes from one of my co-workers. He also belives in corruption in government but that's another topic.

So what I'm posting this for is this. How many jobs are created by small business'? The companies where the "CEO" makes less than $1 Million a year, and employs small numbers of people say less than 1,000. I seem to remember it being a large percentage of the workforce prehaps in excess of 50%. Unfortunately this falls outside of the deeper sections of my mental database.

[rocktivity]

1. Tax cuts go to stockholders in the form of dividends

And into CEOs pockets in the form of salary bonuses. Bush's last two tax cuts haven't created jobs, only wealth to the people who need it least.

:headbang:
rocknation

[DarkPhenyx]

3. Agreed.

But it dosen't answer the question, or allow refutation of his basic premise.

[mrfrapp]

9. Bad Logic

His logic seems to be flawed. Stated another way he seems to be saying: only the rich are employers therefore by making more people rich there will be more employers. Which is wrong of course but I don't see how else to parse what he is saying. What could he possibly be advocating otherwise? He can't possibly be suggesting that rich people should be rewarded simply for being rich, can he? He might have an argument if he thinks employers should be rewarded with tax cuts but he doesn't say that and it would be untrue to presume that all rich people are employers.

I can't think of how else to counter what he's saying without probing him further.

[DarkPhenyx]

12. he is also assuming that all employers are rich.

I believe this to be a false assumption as well. Just need some backup for the discussion before wading back in. I must not be googling it right, and looking at the wrong reports at the library.

[BR_Parkway]

2. I've owned several small businesses over the years

and there have been times where my employees earned more than me, so I guess they had been hired by a poor person. Sometimes I made more than they do, hence the risk of doing my own thing vs working for someone else - but being the company owner is no guarantee of earning a living, much less getting rich.

[LoZoccolo]

4. Giving them the money is no guarantee...

...that they'll create jobs with it, and even if they do, there's no guarantee that they'll create jobs here as opposed to overseas.

However, giving the broad swath of consumers a tax cut gives them more money to spend here, which will go to the businesses that they need which can then expand - demand drives the economy.

This is a little bit more complicated than their "story" but their story doesn't take into account some details.

There is a lot more information on economics here: http://www.conceptualguerilla.com

[LoZoccolo]

5. My argument is based on point #13 of here:

http://www.conceptualguerilla.com/econfordebate.htm

Economics is a good thing to learn, because it's easy to win an economics argument.

[LoZoccolo]

7. And furthermore...

...this way you could say that poor people do create jobs, by creating more demand.

If you want to see what happens when supply-side economics goes wild, look at the dot-com bubble. A lot of money going to create jobs for business where there was not a commeasurate amount of demand yet. It kept it going and spawned a lot of interesting things, some of which lasted, but without the demand a lot of it just collapsed. Giving the poorer people more money allows them to spend it where there's demand, and the businesses can expand to meet that demand - much more stable.

[DarkPhenyx]

13. His counter arguement is that...

...the poor can't create demand. They don't have the money to. OK, I'll head off your next point before you start. They are poor? Noone says thay have to stay poor. They should get a better job. Which will be provided for them by rich people.

[LoZoccolo]

17. The poor can't create demand?

That just doesn't make sense. Poor people spend more of what they earn than people with disposable income that can sock it away. This is just false. The poor already have demand, they just don't have the money to express all of it. If they did not create demand, they would not complain about being poor.

On the other hand, the argument that the job will be provided for them by the rich people is tenuous at best. Sure, they can invest in a totally new business, or hire people for part of a business for which demand has not yet been established - as in no one's stopping them from doing so. But are they more or less likely to do that then:

1. Buying a piece of another, already established business (think of the kind of consolidation that went on in the 80s).
2. Completely buying another business (in which people are laid off because there are redundant parts).
3. Hiring cheaper people overseas (we're seeing this now).

This person would have to explain quite a bit if they're going to believe that the rich would create jobs before doing one of these three things. All three of these things are more likely to get a better return on investment than just going and throwing it at an unestablished part of the business.

[LoZoccolo]

18. Also, it's a bunk argument that the poor don't have to stay poor...

...when unemployment fluctuates.

[DarkPhenyx]

19. No argument from me.

However that is his defense.

[LoZoccolo]

20. Unfortunately, at that point, you've encountered a case of...

...faith-based economics. No, I'm not blaming these conservative tenets on religion, or saying they are based in any religion - there is a separate mythology of wealth in this country, a set of fundamentals about economics that conservatives "just believe". It may be useful from a personal, motivational standpoint to believe that "you can make it if you try", but assuming that everyone else can is reckless. There's probably some pretty decent arguments about this particular fundamental on that site, but I'm at work right now so I couldn't really point you at it. :)

[DarkPhenyx]

21. Well, you can make it if you try.

You can also fail miserably if you try.

I went to college, served my time in the military, did most of the right things you are supposed to. I am even working within my degree now. I'm doing anti-cancer research and getting paid 21K a year. Somehow it just dosen't seem fair to me. I'd be better off financially if I had kept working at Home Depot.

[LoZoccolo]

22. I hear ya, man.

I went to college in the mid-nineties and studied computer science, one of the surest, squarest things you could study at the time, and you probably don't need to know the rest!

[DarkPhenyx]

23. My roomie is a CompSci person too.

So I live the rest. She's working in mortagages now.

[xchrom]

6. so then

where are the jobs?

[orwell]

8. Not So Small Business

Low income people "hire" others all the time, tradesmen, child care, and a host of other services. In effect, whenever you purchase any good or service which requires labor you are "hiring" someone. This comment by your co-workers shows very little undrstanding of how an economy functions.

Some small business statistics. Small businesses:

provide approximately 75 percent of the net new jobs added to the economy.

represent 99.7 percent of all employers.

employ 50.1 percent of the private work force.

provide 40.9 percent of private sales in the country.

account for 39.1 percent of jobs in high technology sectors in 2001.

account for 52 percent of private sector output in 1999.

represent 97 percent of all U.S. exporters.

source: http://www.sba.gov/aboutsba/sbastats.html

O

[DarkPhenyx]

14. And that's what I was looking for.

If I was looking for the latest in cancer research, I can find it. Looking for this stuff is apparently a different issue.

Thanks! :)

[orwell]

15. You're Welcome n/t

[Caution]

10. I personally ran a business

8 employees, I made roughly $32,000/year, their average salary was over $45,000/year. While I wouldn't consider myself poor at that time, the concept that somehow the tax cuts in question were what caused me to hire more people at a better pay rate is patently absurd. Operating a small business is something you absolutely need to believe in and you have to make sacrifices in order to get there. I always intended to eventually pay myself more, but my business didn't survive the drop-off after 9/11.

People need to get a clue. Additionally this is the age old management argument over labor. Mamagement refuses to admin that they depend on labor.

[On the Road]

11. To Paraphrase Paul O'Neil,

I've never seen a corporation make hiring decisions based on tax breaks.

It would be interesting to see a correlation between income and ability to hire. Tons of rich never hire anyone. Tons of below-average people with small businesses do.

[stopbush]

16. What horse shit.

I've worked in large multi-national companies where there isn't "a" owner, companies where the middle management on up are making 6-figure salaries and the underlings are scraping by on minimum wages. All of those management types (and I was one of them) benefit from the rich people tax cuts while the lower-paid workers don't. Few of those middle managers are hiring people, let alone making strategic biz decisions that would lead to hiring more people.

Such tax cuts are simply a giveaway to the better off at the expense of funding government programs that help the less fortunate.

Like I said, horse sit.

[mmonk]

24. tell them the unemployed

don't buy the rich person's goods and services and therefore the rich person makes no money and hires no one.

[DarkPhenyx]

25. But giving the tax cuts to the Rich...

...will give them jobs. It worked for Reagan and only took Clinton 8 years to fuck it up.

[stevebreeze]

26. ask him if the boss ever hired on the basis of having too much profit?

Or do business hire due to increased work load? Tax cuts to the poor provide jobs by increasing demand. Tax cuts on the rich tend not to.

[Nikia]

27. My husband was hired by a poor person

I suppose that wasn't good because the man hasn't paid him for a while, but he worked for him for a couple of years and got paid. This man lives in a trailer on his parents property. He and his wife have two little kids. It annoyed me when we went over there one time to get my husband's check and the nman needed help with something. The wife proceeded to tell me how poor they were and how they recently had to accept help from their church food pantry. I felt bad for them, but on the otherhand, it was her husband's decision to be in business. If they were our normal friends, we would have helped them out. Since they were my husband's employer, we cashed his check anyway.

[swinney]

28. Small Business owners cerate jobs

95% file earnings under $200,000 per year. So. Those persons create most of jobs. Well over 50%.