Profits Do Not Create Jobs
Profits are not the same thing as jobs. Profits do not put food on American families tables, jobs do.
Profits do not create jobs, they capitalize on them. Profits are extra money for the owners of business, and they bear little relation to jobs.
In fact, one of the best ways to increase profits is to fire workers. It's called 'Reducing Costs'.
Workers that cost too much money are fired and replaced by workers who will work more for less.
Firing well paid workers and hiring cheap labor means more profits.
But Henry, Robots Don't Buy Cars
Right before the Great Depression, American companies were doing very well. They experienced massive profits. The Stock Market could only go up, up up.
That's a good thing, right? We hear it on the news all the time.
Well, it can be. Remember profits are not jobs, and profits do not create jobs. During the run up to the Great Depression companies made more products with less labor and experienced great profits as a result. This pushed wages down. The combined effect of lower wages and less people working meant that there was not enough demand to keep up with supply.
Companies were making so much money in profits that they lost track of the foundational tenet of business: the law of supply and demand. If you are going to sell something, you have to have a supply of widgets and people that can buy those widgets.
Demand caved as supply raged the system broke and millions of Americans suffered.
Sound Public Policy Creates Jobs
The lesson of the Great Depression is that profits are not the key to economic health of a nation and it's people. Sound public policy that maintains a proper balance between jobs and profits is the key to economic health.
For 60 years we created and lived under laws that did just that, ensured that jobs and profit were balanced. But in the early 70s that sound public policy which created the middle class, protected American workers from exploitation and protected companies and profits alike came under attack.
Suddenly everything was killing profits - government was killing profits, unions were killing profits, pensions were killing profits - if only our companies were making profits we'd all be better off. Better Jobs, better lives, a better America.
Well, we've gotten our profits back and what happened? Do we have better jobs? Do we have better lives? Is America better?
99% of people work more and are paid less, well those that can find jobs. Millions of jobs have been sent offshore to reduce costs to make more profits.
Profits are up and Jobs are down. The owners of companies get more profits and the workers of companies get exploited.
Profits do not create jobs, they capitalize on them. This is reality today. We are experiencing it, first hand. Record profits and skyrocketing markets with double digit unemployment. Something is wrong here.
It's time we, as a people, come to realize that profits alone do not create jobs and that we start to work together to craft some sound public policy that reflects that understanding.