Post by unlawflcombatnt on Jan 22, 2006 1:28:35 GMT -6
INVESTMENT DOES NOT CREATE JOBS
Investment does not create jobs. Companies do not hire workers simply because they can "afford" them. Companies hire workers when they need them, and only when they need them.
When do companies need more workers? When demand for production increases, or when there is an anticipated increase in demand for production. This increases the demand for workers to provide production. What difference does investment have on demand for workers? NONE. Absolutely zero. Companies never hire workers unless they are needed to provide an increase in real or anticipated production demand by consumers.
Increased demand for workers increases hiring, as well as the wages of those working. Increased demand for anything raises its price. In this case, the "anything" is workers and the "price" is worker wages. So increased production demand by consumers increases wages and hiring, because it increases demand for workers.
What creates consumer demand for production? Consumer spending. What provides the money to finance this spending? Consumer income. So what determines the ultimate limit of consumer spending, as well as production demand? Consumer income.
Worker wages provide consumer income. And wage decline reduces consumer income and demand for production. As a result, recent "real" wage declines have reduced consumer income, spending, and demand for production. The reduced production demand reduces the demand for workers to provide production, causing still further reductions in wages and hiring. Thus aggregate wage reductions, by themselves, put further downward pressure on aggregate wages. This becomes a vicious cycle. And it's a vicious cycle we need to break out of.
Jobs are created by actual (or anticipated) increases in production demand, necessitating the hiring of more workers to provide that production. Investment may facilitate such hiring, but consumer demand necessitates it. But without at least an anticipated increase in production demand, no increase in hiring occurs. Workers are hired only when they are needed to increase production, never because they are simply "more affordable."
Investment does not create jobs. Companies do not hire workers simply because they can "afford" them. Companies hire workers when they need them, and only when they need them.
When do companies need more workers? When demand for production increases, or when there is an anticipated increase in demand for production. This increases the demand for workers to provide production. What difference does investment have on demand for workers? NONE. Absolutely zero. Companies never hire workers unless they are needed to provide an increase in real or anticipated production demand by consumers.
Increased demand for workers increases hiring, as well as the wages of those working. Increased demand for anything raises its price. In this case, the "anything" is workers and the "price" is worker wages. So increased production demand by consumers increases wages and hiring, because it increases demand for workers.
What creates consumer demand for production? Consumer spending. What provides the money to finance this spending? Consumer income. So what determines the ultimate limit of consumer spending, as well as production demand? Consumer income.
Worker wages provide consumer income. And wage decline reduces consumer income and demand for production. As a result, recent "real" wage declines have reduced consumer income, spending, and demand for production. The reduced production demand reduces the demand for workers to provide production, causing still further reductions in wages and hiring. Thus aggregate wage reductions, by themselves, put further downward pressure on aggregate wages. This becomes a vicious cycle. And it's a vicious cycle we need to break out of.
Jobs are created by actual (or anticipated) increases in production demand, necessitating the hiring of more workers to provide that production. Investment may facilitate such hiring, but consumer demand necessitates it. But without at least an anticipated increase in production demand, no increase in hiring occurs. Workers are hired only when they are needed to increase production, never because they are simply "more affordable."