As for the Fortune 1000 having as many employees as small business, not hardly. Most of the people I know supposedly working for Fortune 1000 corporations receive 1099s not W-2s. The actual full time employees of large corporations has been falling for years, being replaced by body-shop employees and service bureaus.
]]>Regarding large vs. small business and employment, I read somewhere that the Fortune 1000 had finally cracked 50% in terms of how many Americans they employ, either directly or through their franchisees and subsidiaries. In any event, my current employer most decidedly qualifies as a “small business” — our yearly gross is roughly what Microsoft made in net profit in the time it took you to read this sentence — and tax credits led us to outsource. They could lead us to in-source too, if generous enough — and there certainly is no shortage of potential U.S. employees for us, all we have to do is set up a booth at any middle-tier university and be showered with resume’s from new grads who are every bit as good as the Chinese guys we’re hiring. But why, when we get a year’s salary for free from the Chinese government?!
– Badtux the Engineering Manager Penguin
]]>Programs targeted at corporations is all that we have had more decades, and they don’t work. a full-time minimum wage is around $12K these days, so a $3-4K tax credit isn’t going to convince someone to hire. Federal tax policy is background noise to a small business, who are really impacted by decisions at the state and local level. Unemployment and disability insurance changes have more of an impact on the small business that everything the Feds do. The IRS are kittens compared to most state tax authorities, and dealing with local business licensing can be the biggest hemorrhoid a business owner can face. [Try explaining that installing network cards is not the same as moving refrigerators for disability insurance purposes.]
The most efficient way of creating new jobs is to shift from helping corporations to at least not being hostile to small businesses, because most Federal programs are geared towards helping corporations by screwing over small businesses trying to compete.
When my local government installed traffic lights to help Lowes and WalMart, they screwed over a lot of local retailers who had been requesting traffic assistance for years.
Playing with the tax code is a zero sum game – someone has to pay for the government, and it would be nice if it were occasionally those who received the bulk of the benefits.
]]>The problem of course is that then you get into a race to the bottom, where all nations try to give better tax credits than the next to get that international job flow to come to *their* nation. But the U.S. currently has a lot more dollars to do that kind of race than any of the competition has…
But talking about small businesses you are, of course, correct. That’s why minimum wage hikes rarely have any real effect upon unemployment. Small businesses — the ones that pay most minimum wage employees — are already running with the minimum staff needed to service their customers. They’re not charities, after all, they’re in business to make the most profit possible for their owner. If wages rise, they’ll raise prices, not fire employees, because if they could serve their current clientele with fewer employees they’d already be doing so. But there isn’t much we can do directly for small business that will increase hiring there — we need to increase demand. And bringing back outsourced American jobs via tweaks to the tax code not only adds more high-wage jobs to the economy, but it increases demand since those people now have more money to spend buying things from small businesses…
– Badtux the Economics Penguin
]]>Actually I don’t think we actually recovered from the 2001 recession because we didn’t have any job growth or income growth to speak of the entire time Bush has been in office.
The main problem with “supply-side” economics [other than it is total piffle] is that economies are driven by demand. No one expands a business unless there is a demand for its product and/or services. By not creating jobs, and not passing benefits onto workers, you are reducing the number of consumers. This problem was masked by the housing bubble for a while, but the bursting of the bubble brought reality back into focus.
Henry Ford did not pay his workers well because he loved them, he paid them well so they could afford to buy his cars. When businesses outsource they are cutting their own throats. If people don’t have jobs, they can’t buy those cheaper products imported from Asia. It is obvious, but apparently they don’t explain it in MBA programs.
Tax credits for hiring employees is stupid. You don’t hire employees unless people want your product, and if people are buying your product you don’t need tax policy to tell you to make more.
]]>You saw it last year on your trip to the antique stores – the vendors leaving and the stock missing, which was even worse this year.
I saw it in the stocking levels at all stores last Christmas, and it is even more grim this Christmas.
This recession, at a year, is already longer than anything since the 1970s with the oil embargo. They waited too long to do anything which just makes it worse and longer.
]]>90% of the time you can make statistics show whatever you want 50% of time
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