Presidents don't create jobs. Contrary to popular opinion, private sector jobs are an incidental byproduct of private enterprise. From hot-dog stands to General Motors, investors form and conduct businesses to make a profit. Bright, energetic people with capital, managerial skill, and products or services start businesses if the climate is right. Entrepreneurs take personal financial risks and pour gallons of sweat into companies in the often vain hope of turning a profit. Most business start-ups fail.
Putting people to work is not the main idea. Businesses employ people to the extent necessary to produce, sell and maintain their products and services. Businesses are not altruistic welfare agencies.
There is no social contract to provide employment for anyone.
Humans are not indispensable to business anymore, at least not natural-born U.S. citizens. Hardworking foreigners swarm across America's borders to perform work Americans eschew. Businesses need every resource and market outlet they can find, and out-source work to scores of other countries. Machines can replace human muscle and computers can replace human brains -- almost. Businesses substitute foreigners and machines for Americans to cut costs and increase profits.
Modern transportation and communications shrank the globe. The 1930s notion of isolationist America was absurd then and preposterous now. Business survival requires movement of products and labor across international borders because U.S. labor is too expensive and there are huge foreign markets that dwarf America alone.
Increased private enterprise correlates loosely with increased employment, but on a declining scale. Every recovery from recession has been a "jobless recovery" to some extent. Businesses are cautious; not everyone is re-employed at their old jobs when things pick up. Companies figure ways to crank up production using fewer people. Layoffs are expensive. Capital spent for machines costs less in supervision, taxes, health insurance, pension contributions and workman's compensation. People are expensive to hire, train, retain, maintain, fire and retire. Machines can be turned off or scrapped.
Presidents can influence the climate for starting and conducting business. Presidents whose policies make enterprise attractive encourage business formation, and job creation as a byproduct. Presidents whose policies suck the profit from businesses discourage business formation and operation, leading ultimately to job reductions. But presidents cannot directly create private-sector jobs.
Many Democrats demand private-sector jobs from a presidential candidate, as though jobs sit stashed in a jar somewhere in the White House basement. (What do we want? Jobs! When do we want them? Now!) They also demand inflated union wages, generous health benefits and subsidized college education for their children, paid for by business taxes and people other than themselves. Punishing companies and successful individuals seems to be their idea of fairness. It's perverse logic. Sen. Joseph Lieberman, D-Conn., said it well: "You can't be both pro-jobs and anti-business." Perhaps he should repeat it until it becomes his party's mantra: a salute to common sense.
Trade unions had their heyday when human brain and muscle were scarce and there were no substitutes. With little practical alternatives to organized labor in key industries -- steel, automotive, telephone -- the threat of strikes once intimidated companies into signing inflated contracts with unions. It was blackmail. Those days are gone. Nowadays, many competent people around the world work more cheaply than U.S. union labor.
Unemployed Democrats would prosper by abandoning their glib demands for jobs and understanding that jobs come from new businesses, and businesses employ qualified people. Want jobs? Think up a new product or service and start a business. Compete with foreign workers by lowering unrealistic wage and benefit expectations. Raise children to respect the power of knowledge and education. Turn away from narcotic sports, TV and drugs, and embrace job training, reading and spiritual life. Save more. Quit whining and do something practical and realistic about trading time for money other than turning up at political rallies and screaming for jobs.
James B. Potter of Carlsbad is a telecommunications consultant.
Posted in Opinion on Friday, January 23, 2004 12:00 am Updated: 10:46 pm.
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