To The Reader’s Forum:
So much has been said, is being said, and will continue to be said about jobs in our economy. Indeed, every politician, especially when seeking election, insists they have the ability to “create” jobs. All political boasting aside, the reality of jobs and employment is really quite easy to describe yet never easy to accomplish.
A person’s employment comes from (created if you will) only two root sources. One is the government, or the public sector, whether federal, state, or local. The other is the private sector. That is, anything not government related or sponsored directly.
For the government (public sector ) to employ someone a job or task must be designed (again created) for that person to do. Let’s say that your village decides it needs a dog catcher to round up all those stray dogs running about. The village council then votes to establish the position of dog catcher and hires a person to fill the position. Now, how is that new dog catcher to be compensated (paid)? Why out of the village budget of course. Where do the funds come from for the village budget? Why from the taxpayers in the village of course. Therefore, if the new dog catcher is a resident of the village then they will effectively be paying a portion of their own salary. If the village budget is tight then taxes would have to be raised on all residents of the village in order to pay for the new dog catcher. This represents “creating” a job by raising taxes. There are many and an increasing number of jobs created by this method.
Now let’s say that the local hairdresser is finding that, for whatever reason, her business (private sector) is growing. Every time you call for an appointment she says she is so busy and she is having a hard time keeping up with her clients wishes (demand). When you go to have your hair styled you mention to her that she may have to hire another hair stylist to keep up with the demand. By hiring an additional person she is “creating “ a job in response to an increase in the demand for her services. Where does this new person’s salary come from? From the sales dollars that she helps to bring in of course. As opposed to the public sector, jobs “created” in the private sector do not need more taxes but, instead, generate more tax revenue such as sales taxes, and payroll taxes.
The choice is quite clear: raise taxes to “create” a job or let an increase in demand do the same thing. Oh, by the way, increasing demand comes from consumers having more disposable income. Lower taxes results in more disposable income. Do you see the connection here? Lower the taxes, create more demand, “create” more jobs in response to the demand and therefore, increase tax revenue.
Roger G. Chagnon Jr., Westfield