Who are the Job Creators?

[Stormieweather]

Originally Posted by tw

Jobs are created only when less people do the same job every year.

I don't get it. Maybe because I'm a "bean counter"?

But it seems to me, and from my observations, that if less people do the same job every year, then job hunters are created, not jobs. Let's use my company as an example...

In 2007, my employer has 4 accountants and each one is responsible for 7-8 real estate properties. In 2012, we have 3 accountants, and now each one is responsible for 18-20 properties (many of them the same properties as in 2007), and none have had a raise since 2008. They are working more than twice as hard, for the same money, we have less overhead (benefits, computers, desk space, etc.) and are making more money than ever. And we have one accountant out of work, out there hunting for a job.

So how did we create jobs?

Is your assumption that the unemployed accountant won't be able to find work, so he'll "innovate" and "create" and make some sort of opportunity for a new job?

From my perspective, he/she actually goes broke and ends up destitute and bitter. And the remaining employed accountants are resentful and poorer than ever, since insurance, daycare, transportation and living expenses have gone up by the boatload, but their income has not. The only truly satisfied person in this scenario is the company owner, as he is earning more money than ever before...what with his reduced overhead and taxes and increased income.

[xoxoxoBruce]

But Stormie, while it appears the owner is making more money his costs have risen too... do you realize what a politician costs these days?

[tw]

Originally Posted by Stormieweather

Is your assumption that the unemployed accountant won't be able to find work, so he'll "innovate" and "create" and make some sort of opportunity for a new job?

That is one of over 100 different possibilities. After all, accountants are overhead. Do not produce a product. Less accountants needed in the world means a more productive world.

So how does an accountant handle more properties? Well, in the 1900s, we invented telephones. Suddenly the accountant could do most work from his desk. Not constantly travel the factory or streets to do his job. Innovation. The reason a job that once took four accountants now takes three? Innovation. The accountant is empowered to do less labor while managing more properties.

Why are banks adding service charges? They will not innovate. Banks have the same people doing the same job. And must now soak customers via service charges because they still using the same number of people. Are harmful to the economy.

It the accountant goes broke or destitute, then he is not the type of person that free market economics empowers. He should be moving on from accounting to something more productive. To take his accounting experience with him to a new job in another company. Or create a business. That never happens when jobs are done with the same people every year.

Meanwhile, bean counters at Exxon decided to do the work with less people. Their shipping division reduced employees from 180,000 to 80,000 in a decade. While not implementing necessary innovations. As a result, an exhausted crew eventually crashed the Exxon Valdez onto rocks. That happens when productivity is generated by spread sheets and bean counters. Not by people who come from where the work gets done.

If an accountant could only handle 7-8 properties ten years ago and can only handle 7-8 properties today, then the company may be approaching bankruptcy. Innovations were not implemented due to a business school 'cost control' mentality. A greatest impediment to innovation is management that does not come from where the work gets done. That, instead, comes from business schools.

GM once proudly announced that every part in a car was made and assembled in 120 man-hours. Meanwhile, Toyota and Honda were doing it in 60 man-hours. Why were the latter more reliable, cost less, and superior? Because latter manufacturers innovated. Therefore were the patriotic companies that America needed.

GM later announced they had gotten their man-hours down to 70. Meanwhile Honda and Toyota were believed to have been building and assembling every part in only 30 man-hours. Therefore GM (many decades ago) was obviously headed for bankruptcy (as I was so blunt about that long ago). Because GM was unproductive. They assembled a car with too many people. Then blamed unions for not working hard enough. Unions did not stifle innovation. Only reason for failure was top management - who did not even have driver's licenses.

You don't become productive by dumping more work on each employee - as business school graduates assume. Innovate so that each employee does more work using less labor. That, BTW, was the lesson from William Edward Deming's famous bead experiment. Now located in the Smithsonian.

That lesson was also from Frederick Winslow Taylor in the 1910s. By simply empowering workers with knowledge, then two men who once took eight hours to load scrap steel in a rail car, instead, did the job in only two hours. By simply taking breaks at specific times. Another example of innovation.

Jobs are only created only when existing work is done with less people every year.

[Stormieweather]

Actually, my co-workers and I do produce a product. We produce financial statements used by banks and investors to determine asset viability.

Some of what you say is accurate, we do work more efficiently now than we did 5 years ago, but we also work much more stressfully, with absolutely no room for creativity. It's all production. And the profit margin on our 'product' is much higher than it was 5 years ago.

Unfortunately, none of that profit margin has been translated into increase paychecks for the workers, and our quality of life has decreased. We are spending less on entertainment and clothing and food and other necessities.This translates into less profit for all of those who provide those products. Not more demand or jobs...

So maybe the company owner can afford an extra pool boy or another pilot for his private plane? Those are jobs...

[tw]

Originally Posted by Stormieweather

Unfortunately, none of that profit margin has been translated into increase paychecks for the workers, and our quality of life has decreased.

GM decreased the man-hours from 120 to 70. Therefore profit sharing was reduced to near zero. Why? GM did not innovate enough. Their product prices increased relative to a free market.

Why? Because Roger Smith spelled the word "employe" in the tradition of Dan Quayle. Because top management blamed unions rather than the 70 HP/liter engine stifled by top management. A short list of the thousands of reasons why a GM car needed two or four extra pistons.

Your productivity can increase. But what did the competition do?

You produce a financial statement. So how does that make a factory more productive or create new products in Wal-Mart or Tesco? Is it the overhead we need so that finance people don't create more fiscal disasters? To your company, it is a 'product' that is so important. But to the economy, it is the unproductive overhead. The word perspective applies.

Productivity is also about eliminating overhead whenever possible. That also creates jobs (as demonstrated by telephone exchanges replacing operators with computers). But, as we know, if we eliminate overhead such as Securities and Exchange investigators, the consequences are disastrous.

Only you or your customers can report how important your job really is. But then that is when and why free markets work. Those who do the work should make decisions. Unfortunately business schools teach that people without any such knowledge should be paid more and make all decisions (also called communism). And so we have a massive recession and the resulting job destruction.

It will take years or a decade of innovation to create new and productive jobs WHILE we also pay for scammers who created Mission Accomplished, welfare for the rich, McMansions, Constellation Aries and Orion, Bernie Madoff, and other debts.

[slang]

Wow, it's great to read another TW rant after such a long time away. There are many things that we disagree on but following the twists and turns of your thought process is truly entertaining. Throw in some sharp sarcasm and I chuckle out loud.

You aren't an engineer by any chance, are you TW?