Show THE VOICE OF BUSINESS C Where here the sibs jobs come from By Richard L. L Lecher Leader Pres res Chamber of Commerce of the United States Stales Creating jobs is a topic much In the news these days Various special-interest special groups are pressuring the President to launch a massive federal employment program of some sort High levels of unemployment are not in anybody's best bat in In- terest But Dut the way the problem is tackled is of critical im Before Defore you can create a job you have to know how jobs are created That sounds obvious enough Nevertheless its it's positively amazing how many otherwise intelligent proponents of federal job programs seem to have overlooked the acquisition of this rather basic knowledge JOBS JOHS ARE AUE created by In In- vestment If you want to open a astore astore astore store for example you need a alot alot alot lot of up start-up money money for such things as rent stock advertising and pay for your staff until the cash starts coming In The same principle applies to heavy Industry only more so Big Industrial processes require big expensive expensive expensive ex ex- pensive machines On the average It takes today to create one collar blue-collar job Where does this Investment money come from Ultimately from savings Yours if your store is small and your bank account large On a somewhat larger scale the thc money may be borrowed from a bank Then the savings of many of the banks bank's depositors will be in In- Or savings may be borrowed directly from Individuals in individuals In In- individuals through th the sale to them of stocks or bonds And finally a going concern may pay for diversification or expansion expansion ex ex- with its own savings usually called retained earnings earnings ear ear- Why should people risk their savings in this job-creating job process To earn a a profit on their investment of course Which means that the product or service offered must be sufficiently attractive to the consumer That in a is Is' Is the story of our economy From it you can deduce that job creation requires both consumer consumer consumer con con- sumer demand and adequate savings to finance the means of meeting that demand NOW LETS LET'S take a look at that mythical federal product Instant Jobs just add money and stir The first thing we can tell about such jobs is that they will willbe willbe willbe be producing something for which there is little individual consumer demand otherwise the private economy would already have created them The next thing we can tell about the Instant Jobs is that they will will like like all jobs require investment But where will the money come from The government doesn't have any savings except on those Increasingly Increasingly increasingly in In- rare occasions when there is a budget surplus There are only two ways for forthe forthe forthe the government to get the money Higher taxes or borrowing Now consider the effect of those two alternatives on private job creation Higher taxes discourage savings And government borrowing reduces the amount of savings available for private borrowing Therefore In the process of creating government jobs the government reduces the ability of the private sector to create private jobs Worse yet the jobs created in the private sector are those for which there is a genuine demand whereas the jobs created by government to cure unemployment are likely to be more of a drag on the economy than a stimulus A HEALTHY private sector then is the best source of new jobs To get that we e need a few fewless fewless fewless less government programs not nota a few more Its It's a fascinating subject and an Important one but a little hard to cover In one short column If you'd like to know more we have an informative booklet titled Who Is the Real Employer It was written for forus forus forus us by William II H. H Peterson an economist from Campbell College NC Id I'd be happy to send single copies free to readers of this column Just write JOBS VOD News Department US U.S. Chamber of Commerce Washington D D. D C. C |