“new businesses are responsible for 'almost all net new job creation in this country’”
Is simply bullshit, the public sector is driving a huge slice of job creation in Canada and has for the last 20 years. Now you can argue that’s a bad thing but it is a thing and this “chief economist” is simply wrong on basic facts.
> Government employment increased by 73,000 jobs, driven by state government education and local government, excluding education.
That part should raise serious questions about the validity of this metric.
Any taxpayer-funded or debt-funded government "job" is not a creator of real (in the economic sense) wealth.
Rather, such government "jobs" merely siphon off and consume real wealth generated by actually-productive market participants, and then permanently destroy that wealth.
Even worse, the process of destroying of that real wealth is often done in a way that then impedes the productivity of the real wealth creators, introducing a secondary and longer-lasting real economic loss.
Each government "job" added should be seen as a significant net loss to the overall economy.
Those government "jobs" are in effect just destroying the real output of some number of private sector jobs.
He's saying 1 new worker added to a firm that already exists is more productive and causes more economic output than 1 new worker added to a random new business that wouldn't exist without the government benefits for them.
He's not saying they're a colossal waste of time, merely incentivising new hires in established firms will create more output than making new firms. He's just saying what the data is saying.
"Opening an Applebees is better than making a random restaurant with your own brand and corporate structure is more likely to create more economic activity".
"I know you want to be hired full time by me. And I want to be doing my part. But please understand: I’m running a business. I want to make profits. And these tools are letting me make more profits by employing people only when I need them rather than carrying them on my payroll."
This is why every time I hear a politician talk about "creating jobs," I grimace. A business will hire someone if and only if they think that person's output will make more money than it will cost to employ them. Period.
Government cannot create jobs. It can make the cost of doing business less expensive by lowering taxes, or it can make the profits of a business higher by providing incentives. But for your average small business, those kinds of changes add up to much less than one person's salary, so it makes very little difference.
Government can create a good climate for businesses to exist, with laws, infrastructure and education. But those are long-term investments. Short-term, anything the government does to affect the economy is a shell game. You can't sign a law and magically make workers productive.
"Although a valid concern putting "job creation" as a goal for governments can (and in a lot of occurrences in recent history, did) backfire spectacularly."
Except you're wrong, the corporate world is always on the governments tit.
Protectionism for the rich and big business by state intervention, radical market interference.
This is a tremendously simplistic analysis of the situation:
a) The sentence "You create jobs by helping grow existing businesses and helping create new businesses." is practically a tautology.
b) "Creating jobs" is a complicated issue in the first place. If I start a new company with fifty employees but drive a competitor who used to employ sixty employees out of business, have I created any jobs?
c) "Creating jobs" is not the problem. "Creating good jobs" is closer to the problem. You could easily create jobs by cutting welfare and offering all of it's former recipients government jobs paying $50/day to dig holes, but this would not be a positive outcome.
d) Creating good jobs in the long term is largely a problem of improving productivity. This means investments in education and infrastructure, and reducing drags on efficiency.
e) He's got a line in there arguing in support of bankers. Banking, like tax preparation or law is a a field that is more "administrative overhead" than a productive industry. Unless we are providing these services to foreigners these fields provide little benefit to the country.
In conclusion I'm not really sure what the point of his article is to do except complain that the government isn't helping him enough.
Yeah it’s a ridiculous argument. The money being spent on those jobs is taken by force (which has an unmeasurable chilling effect on the economy), and then allocated according to central planning, inevitably in a way far less efficient than the market would.
> Any such make-work jobs proposal is obviously paying a premium over the actual value of the work (which is why the same job isn't available in the market already)
Wouldn't the government be providing these "make-work" jobs? The government regularly creates jobs, like research and infrastructure development, that would not be profitable for any private entity. Value can be calculated either from the perspective of the employer, or from the perspective of society at large, but the market only creates jobs which are valuable according to criterion #1.
In my view, this is the essential function of government. It is fascinating that, if you look back 2-3 years, when unemployment was still quite high, the private sector had recovered completely in terms of employment -- all the unemployment was actually being caused by reduced government spending (mostly on the state or local level).
Did you read the article? The argument is not "some jobs are disappearing but other jobs are being created," the argument is "stop arguing from anecdote, productivity growth is practically non-existent, the fact that you saw a restaurant with no waiters does not dent the fact that we have below-full-employment levels of unemployment."
I've seen a few mentions about this fairly inane speech -- smells like PR/astroturfing to me.
Frankly, whenever I hear the phrase "job creation" I tune out immediately, because I know that nothing intelligent will follow that phrase ever.
People hire people to do things when they have work to do. You "create jobs" by increasing economic activity. The problem is, business these days is all about consolidation and labor arbitrage.
job creation isnt basic, especially disruptive change and new economies of scale.
these jobs will displace slash replace other jobs. calling the jobs created growth without looking at what the new industry destroys is like going to the casino and bragging about how much you won, while withholding how much you "invested."
“new businesses are responsible for 'almost all net new job creation in this country’”
Is simply bullshit, the public sector is driving a huge slice of job creation in Canada and has for the last 20 years. Now you can argue that’s a bad thing but it is a thing and this “chief economist” is simply wrong on basic facts.
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