http://boss.blogs.nytimes.com/2009/08/05/are-medium-sized-businesses-the-job-creators/
I have never been able to square what I hear both liberals and conservative say about small businesses and job creation with what I see around me everyday when I leave the house. I stumbled onto this blog in Thomas Frank's foot notes to "Pity the Billionaire." It seems that what I suspected to be true really is true: big business hires more people than small business. It turns out that the small business as job creators canard got started in the 1980s when big business was out sourcing labor to small businesses in order to lower their labor costs.
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/07/AR2009070702650.html
I have heard Thom concead this point to conservatives in debate. I don't understand why.
Where are all these small businesses who are hireing the millions? When I walk out of the house I see coporate conglomeration everywhere I look.
Comments
I am not a big fan of the "job creation" meme because slavery is a full employment economy. It is not just the 'right' to have one's labor stolen by coercion and need. Democratic citizens ought to be free to pursue their personal vocational calling and to bring their best creative energies to their work. We are dominated by a political culture of "the stupid economy," and it shows in the nature of our discourse.
Nonetheless, the idea of small business as the superior economic engine does have legs. There are strong ecological arguments against the growth at all costs, resource consumption/production metrics as a sustainable economy. David Korten marks the new economy as "indigenously owned" and "artisanal" in value added. "Economies of scale" have tended to ignore the externalization of costs and the internalization of profits as they promise investors big money. Plantations and sweatshops provide 'jobs,' but they do not create consumers, much less citizens who really participate in power economically. Small business, on the other hand, tends to operate within a moral social context where the conditions of workers and their families are seen in human perspective. Local businesses also circulate money within the local community instead of drawing it off to the mega corp and its overseas banks.
I think people ought to work less and follow their vocations more. We need to have more time to be human beings with each other beyond our economic identities. We need to be human beyond our economic function.
This all said, the record of "job creation" on the Right is terrible. Rich people do not create jobs. Giving the rich a ton of money does not lead to their largesse and benefactor vision. Economics requires a redistribution of wealth to keep the system healthy. It has nothing to do with what anyone on the top has "earned." It has to do with what is required of the rich to keep their Golden Goose fed and happily laying their golden eggs. But they insist on having Golden Goose Roasts and gluttony. The favorite cocktail of the rich and powerful is a Double Hubris on the Rocks.
Consumer spending creates jobs by creating demand for products. When the consumers don't have the money to spend guess what happens next?
When these politicians and trolls advocate for tax breaks for "small businesses" because "small businesses create most of the jobs" it is important to note that a "small business" may have 499 employees.
http://web.sba.gov/faqs/faqIndexAll.cfm?areaid=24
"In 2009,there were 27.5 million businesses in the United States, according to Office of Advocacy estimates.The lastest available Census data show that there were 6.0 million firms with employees in 2007 and 21.4 million without employees in 2008."
Why the SBA can't present complete figures for a single point in time (2007) is beyond me. Nor why they can't show complete figures for 2009 as of January 26, 2012.
Small businesses create jobs as an after effect. Every owner of a small business is in a sense a sort of "Middle Manager", enjoying a nice income, and a sense of control over his or her own life. They have extra income which they are able to spend on luxery items like cars and technology. This is the true middle class. Small business owners also hire people, not as many people, but they definately need staff to show up for work and serve customers. It's pretty hard to make real money without staff to do your labor.
This scenario creates lots and lots of well paid small business owners /"middle managers" and labor (human workers).
Corporations may hire the same number, or more, of bodies, but they have to pay out less in pure labor costs. Far fewer "Middle managers" overseeing much, much, larger numbers of labor (human workers)... less labor costs = higher profits. Economics 101. They also concentrate their labor forces in fewer areas, always seeking out lower taxes and operating costs. Weather is even a factor in determining the location of job sites, especially in the food industry where extremes in temperature can spoil product.
This is also a reason towns and cities decline so much when corporations pull out. It's devastating to communities, and makes their leaders and citizens at their mercy. They are forced to make self-destructive decisions to keep them from leaving.
Small businesses create a higher number of high paying jobs spread out over larger areas. The money and profits circulate much better throughout the economy (not the stock market)... which create more businesses, more middle manager incomes, and more jobs. Communities become healthier, more stable, and have less crime as people tend to care more about their neghborhoods when they aren't moving around all the time trying to find work or escape poverty.
Just think of the circulatory system. The body will die if it doesn't have good circulation.
Just to recap, the Washington Post article says, that indeed, 'Small Businesses' hire 65% of jobs.
But, as noted, this is defined by firms with less than 500 employees.
The small 'mom and pop stores' (10 or less) the article says makes up only 15% of jobs
But, to be fair, 500 employees is probabaly not a large, evil, corporation. Most of the national corporations that could concievably have a corrupting influence on government have from 150,000 on up. Most of all the populat chains and stores we would recognize fall into this category.
We need to break down the "small business" meme because a lot of investment equity and hedge funds employ very few people. Businesses that create real value, and localy owned where the money stays in communities and circulates are far better than all the franchises and mega corp siphons where the money goes out of the community.
Economies are not projections of business logic. The 'economies of scale' so prized by Biz School catechisgts may serve the profitability of the corporations, but the efficiencies and savings do not result in better local economies or better products for consumers. We can get shit hardware from China, and the reason we get it is that "our" corporations go to cheap labor and get them to produce it for us. In many other areas of production, China produces high quality goods and wants to be known for quality. The sweatshops are subsidiaries of "our" corporations. The high price of cheap is why peasants only buy quality. They cannot afford disposable crap.
No one is hiring or thriving in this economy unless you are governmental or medical or you support one of these professions.
Small businesses I know of don't do squat as far as hiring goes. They hire maybe 5-10 people and that's it.
The American economy is joke, underemployment is rampant and yet people will still vote for Globalist @$$-clown politicians just cuz they got a D or an R by their name.
I am pretty sure Ron Paul will win it in 2012 cuz many Americans are waking up to Globalism, however if not may their trip to the FEMA Camps be a pleasant one.
26 Tenets of the New World Order:
1) Men are inclined to evil rather than good.
2) Preach Liberalism.
3) Use ideals of freedom to bring about class wars.
4) Any and all means necessary should be used to reach their goals as they are justified.
5) Believe their rights lie in force.
6) The power of their resources must remain invisible until the very moment that they have gained the strength so that no group or force can undermine it.
7) Advocates a mob psychology to obtain control of the masses
8 ) Promotes the use of alcohol, drugs, moral corruption, and all forms of vice to systematically corrupt the youth of the nation.
9) Seize citizens’ private property by any means necessary.
10) The use of slogans such as equity, liberty, and fraternity are used on the masses as psychological warfare.
11) War should be directed so that the nations on both sides are placed further in debt and peace conferences are designed so that neither combatant retain territory rights.
12) Members must use their wealth to have candidates chosen to public office who would be obedient to their demands, and would be used as pawns in the game by the men behind the scenes. The advisors will have been bred, reared, and trained from childhood to rule the affairs of the world.
13) Control the press, and hence most of the information the public receives.
14) Agents and provocateurs will come forward after creating traumatic situations, and appear to be the saviors of the masses, when they are actually interested in just the opposite, the reduction of the population.
15) Create industrial depression and financial panic, unemployment, hunger, shortage of food, use these events to control the masses and mobs, and use them to wipe out those who stand in the way.
16) Infiltrate Freemasonry which is to be used to conceal and further objectives.
17) Expound the value of systematic deception, use high sounding slogans and phrases, advocate lavish sounding promises to the masses even though they can’t be kept.
18) The art of street fighting is necessary to bring the population into subjection.
19) Use agents as provocateurs and advisers behind the scenes, and after wars use secret diplomacy talks to gain control.
20) Establish huge monopolies towards world government control.
21) Use high taxes and unfair competition to bring about economic ruin by controlling raw materials, organized agitation among the workers, and subsidizing competitors.
22) Build up armaments with police and soldiers who can protect and further the New World Order's interests.
23) Members and leaders of the one world government will be appointed by the director of the New World Order.
24) Infiltrate into all classes and levels of society and government for the purpose of teaching the youth in the schools theories and principles known to be false.
25) Create and use national and international laws to destroy civilization.
26) Use estrogens & femicals to drive males gay and the female population insane thereby insuring the destruction of the family, hence more governmental dependency.