18 October 2014

The Real Job Creators

Supply and demand (S&D) is said to be a fundamental concept of economics
Who sets the standards for S&D?
I have a product and I create 100 units. I sell 10. Do I create 100 more to increase demand? No. I decrease my output or change my product.
If I create 100 units and sell out in a day, I create more. What if I can't do it by myself? I lose money. So, I have to hire someone else to help me make it. The goal is to profit off of their labor. I will not pay them more than what I would make from the sells of the items they create. That would be stupid.

Let's go back to the first scenario of loss. Would I hire someone else to help me make the extra units even if I only sold 10 of the first? No, that would be a waste of money.

Two labor rules
Employers don't hire anyone unless they have to.
The only reason they would have to is if the labor would stand to make a profit.
A person will only hire you if they can make a profit off of you.

An employer is not going to make a profit if no one is buying their product.

Some say an investor is a job creator. Not so. They provide capital for the work you need. If there is no need for more labor, that investment will not go to labor costs.

So, back to the question of setting standards for S&D.
It is the demand that sets the standards. Who creates the demand?

Consumers.

If there is no demand, there is no need for a supply. There is no need for more labor if there is no need for a supply because there is no demand.

Consumers are the real job creators.

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