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All Da King's Men

Where Do Our Jobs Come From ?

By Da King Published: March 6, 2009

First, let's run through the job statistics.

According to the Bureau of Labor Statistics (BLS), just over 142 million people (ages 16 and over) were employed in the USA in January 2009. That's down almost 4 million from employment in January 2007.

The U.S. Small Business Administration reports - Since the mid-1990s, small businesses (defined as firms with fewer than 500 employees) have created 60 to 80 percent of the net new jobs in the private sector. In 2005, employer firms with fewer than 500 employees created 979,102 net new jobs, or 78.9 percent. Meanwhile, large firms with 500 or more employees added 262,326 net new jobs or 21.1 percent. Small businesses employ about half the employees in the private sector.

Let's just round off and say small businesses create 70% of new jobs in the private sector, and the big firms create 30%.

Then there are the government jobs. Contrary to the recent moronic statement by the new RNC head Michael Steele, who said, "big government doesn't create one job" (or something like that), big government creates LOTS of jobs. The BLS says the Federal Government, excluding the Postal Service, had more than 1.8 million civilian employees in January 2007, making it the nation's largest employer. Census numbers indicate all government employees at all levels of government numbered 19.7 million in 2006. Let's call it 20 million. There is one problem with all those government jobs, though. They are all paid for by the American taxpayers. Therefore, they are largely just flat wealth transfers instead of wealth creators. What goes into the public sector comes out of the private sector.

Assuming my numbers are roughly correct (I hope they are), we have the following situation - There are 142 million at work in the United States, with 20 million working in the public sector and 122 million working in the private sector. Small businesses represent half the private sector jobs (61 million) and large businesses represent the other half (61 million). Small businesses create 70% of the new jobs in the country.

Now, let's say you were the President of the United States, and you needed to stimulate the economy. Let's say you needed to create jobs due to some economic crisis. As President, you know Americans without jobs is a very bad thing. In addition, you know that the entire 4 million in job losses the last couple years has come from the private sector. Government jobs have largely been unaffected by the economic crisis (curious, eh ?) From the above jobs numbers, it looks like it would be a very good idea to stimulate American businesses, and specifically small businesses.

So, what would you do ? Would you:

1. Spend trillions of dollars, including $787 billion on a stimulus package that gives small tax cuts to individuals, spends money on "shovel-ready" projects over the next few years, and vastly increases the size of government ? Would you then pass a $410 billion omnibus spending package, the largest in history ? Would you pay for it all by implementing a variety of tax increases on business and increasing the capital gains tax (also a tax on business) ? Would you then choose to implement a carbon tax on business ? Would you act like business was the enemy ?

Or would you:

2. Make it easier to start up new businesses and expand existing businesses in the U.S. by cutting business tax rates to the lowest in the world, and eliminate the capital gains tax rate for awhile to spur investment in new and expanding business opportunities ? You could also do some targeted government spending that was conducive to economic growth and stimulating business, treating business as a friend, your best friend actually, the primary source of American wealth.

We all know which option our President chose. He chose to throw a wrench into the primary motor of American wealth and penalize the private business sector during the worst recession since the Great Depression. In my book, that's some world class stupid right there. Stupid beyond belief. We are reliving the missteps of the Great Depression all over again, when taxes were increased twice, thus deepening the Depression twice. You know what they say about those who fail to learn from history. Yes, we are doomed to repeat it. Hold on tight. It's going to be a bumpy ride. Just look how the stock market has reacted to Obama's anti-business anti-private growth policies. Every time the Big O makes another economic pronouncement, the stock market goes down further. And The One has only just begun.

But golly, that Rush Limbaugh sure has some nerve.



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