By John Grom
It's an election year and we will hear a lot about job creation and employment statistics until after the second Tuesday after the first Monday in November. We have already heard enough to know that there is a lot of confusion about how jobs are created and why. Some of the things we have heard cause me to shake my head and wonder about our education system.
I have to admit though that I am convinced that some of the things I have heard, from what I assume to be educated people, are deliberate attempts to distort the truth and not the result of ignorance. In other words they are just plain dishonest.
I heard a spokesman for President Obama criticize candidate Mitt Romney in an interview, saying that in his time as CEO of Bain Capital, some of the companies he invested in were closed and people were laid off. He said that this was proof that Gov. Romney is not the job creator he claimed to be. The interviewer pointed out that other investments of Bain Capital during Romney's tenure created tens of thousands of jobs. Undetered, the spokesman charged ahead saying that Romney just made those investment to make a profit and not for the purpose of creating jobs. He really said that. In fact he said it three times.
I realize that very few people in the current administration have a business background but I assume that people operating at that level are all educated. I am trying to imagine an educational curriculum that does not include at least one course that contains material on how our economy functions. Even without a basic economics course it should be understood that business investments are not made for the sole purpose of creating jobs any more than a homeowner has a new roof put on the house for the sole purpose of providing work for the roofer.
Efficiency in the operation of a business is necessary for meeting the needs of the customers and that means getting the most production out of the fewest resources and employees are a resource.
Efficiency is a word not often associated with government at any level but it is essential to the wealth creation process. It is the overriding goal of any competitive company. It is what makes its products affordable to customers, generates a profit for its investors and makes it possible to hire people.
The pursuit of efficiency is also the thing that sometimes results in job losses. When demand for products falls off, it is necessary to cut back on expenses in order to save the business. Some politicians attack companies for the things they have to do in order to gain support from people who are already predisposed to anti-business feelings.
Not withstanding the fact that jobs can only be provided by companies that provide the right products or services at the right place, at the right time and at the right price, corporate greed is the favorite reason given for plant closings and layoffs.
It is helpful to realize that the concept of a job is relatively new to our culture. A job, defined as "A Position in Which one is Employed for the Purpose of Performing Regular Activity in Exchange for Payment" is common only to modern man. It was not that long ago, in the big scheme of things that we each produced most of the things we consumed.
Craftsmen may produce items such as shoes, saddles and jewelry for which we would barter but the idea of full time employment in the service of company was not widely known until the onset of the industrial revolution in the late eighteenth century.
In time, innovative people created products and the means to produce them as a way to make a living. People with investment capital financed the means of production for the purpose of sharing in the profits. If the venture was successful and the innovator did not go broke and lose the investors money, he would hire people to help make the products. Thus job creation... It would be a rare person indeed who would put effort and capital into a risky venture for the sole purpose of creating employment for others.
Two things that stand in the way of job creation are the unavailability of investment capital and uncertainty about the future cost of doing business.
While increasing taxes on the rich (whatever that means) has a certain egalitarian appeal it takes away investment potential that could result in job creation. Uncertainty about the effect of future taxes, regulations, health care costs etc. on production costs make it difficult for businesses to plan for growth and hire additional people. End of story.
Please visit my website, http://cjohngrom.com for access to my commentaries on employee selection and personal job search techniques developed over a thirty year career as an Executive Recruiter and staffing manager. My career included over ten years on the Corporate staff of Rubbermaid Inc. as Manager of Executive Recruitment. During that time Rubbermaid Inc. quadrupled in size and was twice named by Fortune Magazine as the most admired US Company. My contribution was to personally recruit over one hundred executives, including seven division Presidents and four of the eight members of the Corporate Executive Committee
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