Question for big businesses; where are the jobs?

[Jack]

We are told that unregulated businesses will be the job providers to help rebuild the economy. That sure doesn't appear to be happening. Perhaps this example will illustrate why.

Shortly after Mitt Romney resigned from Bain Capital in 1999 to run the Olympics in Salt Lake City, potential investors received a prospectus touting the extraordinary profits earned by the private equity firm that Romney controlled for 15 years.

During that time, Boston-based Bain acquired more than 115 companies, according to the prospectus. Bain's estimated annual returns were more than five times that of the Dow Jones Industrial Average in the same period.


Now a front-runner for the Republican presidential nomination, Romney says his Bain experience shows he knows how to create jobs. He often cites Bain's investment in a little-known office supply store called Staples, which now employs more than 90,000 worldwide.

But a closer examination of the prospectus paints a different picture of Bain's operation. Under Romney's leadership, Bain became one of the nation's top leveraged-buyout firms, helping lead a trend in which companies were acquired using debt often pledged against their own assets or earnings.


Bain expanded many of the companies it acquired. But like other leveraged-buyout firms, Romney and his team also maximized returns by firing workers, seeking government subsidies, and flipping companies quickly for large profits. Sometimes Bain investors gained even when companies slid into bankruptcy.


Romney himself became wealthy at Bain. He is now worth between $190 million and $250 million, much of it derived from his time running the investment firm, his campaign staffers have said.


Bain managers said their mission was clear. "I never thought of what I do for a living as job creation," said Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years before forming his own firm. "The primary goal of private equity is to create wealth for your investors."

A look at Mitt Romney's job-creation record at Bain Capital - latimes.com (emphasis mine)

[ironeagle]

Well you are under the false impression that businesses have an obligation to create jobs. Clearly we want jobs and need jobs, and we need fair living wages, and we also need to ensure we do not have monopolies, however in answer to where are jobs are they are either;

a) Mexico or China
b) taken over by illegal aliens

[Jack]

Well you are under the false impression that businesses have an obligation to create jobs.

If it's a false impression it's one that has been given by the businesses themselves, by holding job creation hostage to their demands for less regulation.

In an ad that has blanketed radio airwaves in the Washington region, a woman’s voice gently intones, “Imagine . . . one million new jobs.”

“One million new American jobs,” echoes a man. “One million new opportunities to build a career,” says the woman.

“Support a family.”

“Follow your dreams.”

And where will these “one million new jobs” come from? By expanding oil and gas drilling and building new pipelines, says the American Petroleum Institute, an industry lobbying group that paid for the ad campaign, which also has featured in newspapers, on television and on Metro platforms.

Oil companies aren’t the only ones promising jobs if Washington gives them their way. A wide array of businesses are saying they can help solve the country’s unemployment crisis if only the government would roll back some regulations, approve their big mergers or lower their taxes.

“We just learned today that if the federal government would pull back on all of the regulatory restrictions on American energy production, we could see 1.2 million jobs created in the United States,” Rep. Michele Bachmann (Minn.) said at a Sep. 7 Republican presidential debate.

In a letter last month to the Justice Department, 100 lawmakers defended the merger between AT&T and T-Mobile, repeating the companies’ argument that the government’s lawsuit to stop the deal on antitrust grounds would “thwart job creation and economic growth.”

And a central element in the economic plans of other Republican presidential candidates, such as Mitt Romney and Rick Perry, is to roll back “job-killing” regulations to spur hiring.

“It’s really hard if you’re against regulation to let a good crisis go to waste, and right now we have high unemployment,” said Roger Noll, an economics professor at Stanford University and co-director of the school’s program on regulatory policy. “You can use the current economic condition as a Trojan horse.”

AT&T has been running a television ad showing its employees hard at work and consumers enjoying their wireless phones and tablets. The ad says that if the merger with T-Mobile is approved, AT&T will bring back 5,000 jobs that were outsourced overseas. It also says the merger will create investment in broadband that would create “as many as 96,000 jobs.”

“Sure, you know oil and natural gas fuel transportation and comfort,” a blond-haired woman in a black pantsuit says in one API television ad. Behind her, silver trucks and cars glide by, an African American family shares a meal, people pour out of a rush-hour train. Then a crowd appears before giant letters that read: “9.2 million JOBS.”

Companies use fuzzy math in job claims; candidates still buy in - The Washington Post

[grandpa]

If it's a false impression it's one that has been
given by the businesses themselves, by holding job creation hostage
to their demands for less regulation.

This makes it easier to figure out:
"The condition of alienation, of being asleep, of being unconscious,
of being out of one's mind, is the condition of the normal man. Society
highly values its normal man. It educates children to lose themselves
and to become absurd, and thus to be normal. Normal men have killed
perhaps 100,000,000 of their fellow normal men in the last fifty years."
R.D. Laing

The normal man in action:
"But others contend that consumers adjust to prices -- mainly because
they have to, with driving integral to their
lives.
'It has been our contention since the 1970's that consumers really
don't change their driving habits on the basis of price,' said Geoff
Sundstrom, a spokesman for the Automobile Association of
America. 'They only change due to supply problems.'"
Gasoline Prices, Likely to Stay High, Don't Seem to Be Reducing Demand - NYTimes.com

Grandpa h.

[HoleyCarbonGrid]

I've never understood the argument that less regulation or bigger profit for a company necessarily means more jobs. Yet it's still taken as axiomatic by many politicians today, particularly in the Republican presidential race.

I'm not an economist by any stretch of the imagination; so if my argument seems flawed, perhaps someone more experienced in economic issues can point me in the right direction. It's not intended to apply in all circumstances - for example, I'd argue that yes, expanding the natural gas industry in the U.S. will create jobs (but there are reasons for not doing so that have to do with more than the economy) because it will create new avenues of production.

Instead, I'm discussing pre-existing production mechanisms for the market, for which companies still want politicians to cut regulations, mostly to maximize their profits. Their argument is, "but if you cut our regulations, we'll make more money; by making more money, we'll hire more workers!" I argue that this is not necessarily the case, and should certainly not be taken as an inherent principle of capitalism.

In a fully laissez-faire capitalist system, companies only incentive for job creation is to satisfy the minimal threshold required to produce as much product as demand calls for. In other words, if demand calls for 100,000 units of product X from Company A, Company A will have as few workers as possible on staff to produce 100,000 units of product X. To do otherwise - either to over-produce product X (which will lead to a drop in prices for product X) or to employ more people than necessary to produce said product (which leads to higher overhead costs for workers' wages) - is to not maximize profits, as companies in a laissez-faire capitalist system are intended to do.

In supporting deregulation, one is making the implicit assumption that a company that makes more money (through abolishment of onerous regulations, of course!) will automatically hire more workers. This is not necessarily true. As often as not, demand won't call for higher production, which means that no more workers are needed. Nor will the company raise the salaries of their workers, unless they need to due to low demand for their positions and/or similar market pressures. Thus, by cutting regulation, all you've done is pad the pockets of those at the top.

In areas where there is more demand than there is supply, it may be in the best interest of the company to hire more workers to increase supply, satisfy demand, and make more money. However, I'd argue that it's not "regulation," that's stopping businesses from doing so - after all, if market conditions are favorable companies will expand whenever possible to maximize profit. Unless there's new laws I haven't heard of that restrict retail stores from opening new chains, etc. without Congressional approval, the lack of hiring in the U.S. is more likely due to the general downturn in the economy, which has limited demand and decreased market pressures for expansion. Yet I can't help but notice that even as company profits (generally speaking) in the U.S. have risen over the past several months, there's been a minimal amount of new hiring. This is a so-called "jobless recovery," thus far, as have been similar economic recoveries in the past (http://www.kc.frb.org/PUBLICAT/ECONR...09q3knotek.pdf)

I can't help but notice in the news that many of the companies that argue for de-regulation are: (1) banking and investment industries or (2) energy industries.

Banking and investment industries have proven, through speculation and boom-bust economics through the course of the past century, that they are incapable of regulating themselves. Indeed, unregulated banking and investment speculation are exactly what caused the current financial crisis. In addition, I'd argue that investment banking is essentially a sort of quasi-capitalist enterprise; investment firms actually don't produce anything, they just make bets on which companies will produce things best (i.e., at maximal profit).

The energy industry argues for deregulation essentially so that they are free to pollute, or to follow unsafe work practices. Sure, you can deregulate the natural gas industry, and yes, they'll build transport networks and often hire workers. However, the regulations are there for a reason - so that people in the regions in which energy industries operate can live without raised risk of illness due to polluted waterways and food sources.

[Jack]

Saw this today and realized once again, the more things change the more they stay the same.

The Ruling Clawss, 1935 | Retronaut

[Peter]

Don't expect jobs to be coming back any time soon if ever. Why? People are generally lazy, need sleep, take time off and are very expensive to keep healthy. Any business that can is trying to eliminate as many people from it's payrolls as possible. Automation will continue to make major inroads into manufacturing and even the service sector. Technology will replace human work and we might as well get used to it. One of the major challenges facing us is to build and maintain a happy, healthy, content society where less than 25% of the population actually needs to "work". We're only in the beginning stages of this transformation and it's looking ugly.

[Jack]

Don't expect jobs to be coming back any time soon if ever. Why? People are generally lazy, need sleep, take time off and are very expensive to keep healthy. Any business that can is trying to eliminate as many people from it's payrolls as possible. Automation will continue to make major inroads into manufacturing and even the service sector. Technology will replace human work and we might as well get used to it. One of the major challenges facing us is to build and maintain a happy, healthy, content society where less than 25% of the population actually needs to "work". We're only in the beginning stages of this transformation and it's looking ugly.

I agree the face of labor is changing dramatically. I don't agree that "People are generally lazy". I assure you that I and many like me are actively seeking employment and would like nothing better than to be hired tomorrow. There may be some out there who have an unlimited source of funds to support their "time off", but not all of us. Hell, I'd be happy performing maintenance on the machines that are doing the job I hoped to get. I'm way past being picky about my next job. Filling out hundreds of applications and getting three tentative replies thus far is not doing my mental health any good.

[Peter]

I agree the face of labor is changing dramatically. I don't agree that "People are generally lazy". I assure you that I and many like me are actively seeking employment and would like nothing better than to be hired tomorrow. There may be some out there who have an unlimited source of funds to support their "time off", but not all of us. Hell, I'd be happy performing maintenance on the machines that are doing the job I hoped to get. I'm way past being picky about my next job. Filling out hundreds of applications and getting three tentative replies thus far is not doing my mental health any good.

I won't quibble with you over what is essentially an opinion. I'm sure there are many hard workers out there like yourself.

[Jack]

I'm probably not the most objective debater on that particular topic, either.

[barts]

Any business that can is trying to eliminate as many people from it's payrolls as possible.

Generally, every time a business eliminates a person from their payroll, they're also putting either one of their or another business's customers out of work.

I wonder who do the businesses putting people out of work think will buy their products and services?

[Jack]

Obama Pushes Job Creation

Following his State of the Union address, President Barack Obama has turned his attention to job creation. Here are some facets of his administration's plan:

• Everyone permitted one fake college degree per resumé
• Phasing out second interviews so all three top candidates get hired
• For one day a week, factories may adopt the wage and safety laws of a Southeast Asian country of the owner's choice
• Grants to youngsters who are gifted at mining
• Government program to train unemployed factory workers to weld 500 joints a minute so they stay competitive with robots
• Offer generous early retirement packages to workers who are extremely good at their jobs, thereby creating four to five new positions for incompetent morons
• Obama to talk to nation's brothers-in-law one at a time to see if they can make a little something happen at their big-time landscaping businesses
• Upping education spending to help ensure that Americans' English communication skills are on par with India's and China's by 2018

OK, it's from The Onion.