Thursday, June 11, 2009

On Job Creation and the Midwest

Check out this post by Austin Thompson and learn a thing or two about job creation and true economic growth.
Intuitively, the more labor intensive the industry, the more jobs created. But there are profitable reasons in the short-term for why Fortune 500 companies would choose to invest in a more capital intensive industry. Less workers mean fewer costs, and labor replacing technologies won't demand a living wage, a pension, or healthcare insurance for a family of four---a human being will.

The strategy of many Fortune 500 companies is to increase the ratio of capital to labor, thereby avoiding the burden of paying labor costs. Policy-makers who care anything about creating pathways out of poverty for the poor and decent work for middle-class families should be doing the exact opposite, increase the ratio of labor to capital. The increasingly narrow bottom-lines of Fortune 500 companies, are not the same as those of public servants---or at least they shouldn't be.

The post details some important ideas to keep in mind during this whole 600,000 jobs in 100 days push.

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