Small Businesses Create Jobs But They Also Destroy Jobs, Says Economist
All Things Considered ‘s Melissa Block talked to economist Justin Wolfers professor of business and public policy at the Wharton School at the University of Pennsylvania about the term “job creators.” Because according to Ayn Rand John Boehner, they’re on strike. And if we just get these awesome-in-every-way people to get off that picket line and make us some more JOBS – everything will be wonderful. From NPR : As President Obama pushes Congress to pass his jobs bill, Republicans argue the administration’s policies hurt “job creators.” The phrase “job creators” comes up often these days in political rhetoric. So we wanted to understand who exactly the jobs creators are. Melissa Block: We hear a lot about small businesses being the engine of job growth in country. How true is that? Justin Wolfers: Categorically false. Small businesses create a lot of jobs but they also destroy a lot of jobs. Melissa Block: How so? Justin Wolfers: Small businesses, firms that are just starting out, some succeed and a bunch of them fail. If we only count the success, which would be the wrong thing to do, then we say they create an enormous number of jobs. But you know how difficult it is to start a successful small business. I’m sure they’re doing a lot of hiring in total but they’re also doing a lot of firing as well. But this was the kicker: Justin Wolfers: This is when the rhetoric of small businesses I think really leads us astray. If you actually look at the data of what we mean by small businesses or what they actually are, they’re things like real estate agents or my hair dresser. They’ll lawyers or they’re doctors. You talk to these folks do they have any interest in innovating or bringing new products to market or any of the things we think of as being the engines of economic growth. The answer is no. My dry cleaner likes to take my clothes and give me them to me four days later. Most small businesses don’t have any ambitions of being the engines of economic growth or the engines of jobs. The GOP just has to have a deity – the need to revere something. It’s no longer the President. It’s clearly not the troops. They have to worship something – “job creators” are their latest Reagan.
Small Businesses Create Jobs But They Also Destroy Jobs, Says Economist
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on September 28, 2011. Filed under