All I can do is laugh at such whimsical thinking. I just don’t believe that ignorance about the process by which business actually functions in this or any other country can be fought…it’s a lost cause, since these threads pop up all the time, and the same people say the same silly things every time.
That’s true. Business exists to make profit. Jobs creation is merely a side effect. When businesses are doing well, when they feel confident and comfortable with the immediate future they expand…when they expand they invariably need to hire more people (or they need to invest more heavily in automation). When they feel uncertain about the future, when they don’t know what their costs are going to be they contract, and that means they shed jobs, don’t invest in upgrading technology, and go into a more wait and see attitude. They do both of these things in order to try and maximize profits, not out of either the goodness of their hearts OR because they are comic book evil villains. Granted, ‘profit’ is a dirty word in these sorts of threads, so MMV.
Small businesses aren’t hiring because they are uncertain of the immediate future, or what directly Obama et al are taking us. They don’t know if their taxes are suddenly going to go up, they don’t know exactly what the costs of the new health care reforms are going to be on them in the short, medium or long terms, they don’t know what the economy is going to do (double dip inflation? more recession? a modest increase? a boom?)…and so, in their uncertainty they are reluctant to expand less they get caught in one of the unknowns and thus loss a lot of money AND have to lay off all the people they have hired plus maybe some of the ones who are currently working. Why this is hard to grasp is beyond me…it seems so simply and obvious that I truly don’t understand where the disconnect is.
Because hiring people means more production (or more service, or more of whatever the business in question does to make a profit), which means more profits…IF the expansion is successful. You can’t simply expand and expect the profits to come in, however, and there are a lot of unknowns: Will people be buying more of my products? Will taxes go up and thus impact those profits? What effect with the new health care reforms have on the bottom line? What will the economy and the stock markets be doing, and what effect will THAT have on my own bottom line? What new initiatives might Obama et al push through to ‘fix’ the various problems, and what effects will those have?
There is a lot of uncertainty about what’s going to happen in the next year or so, and businesses, big or small don’t know what will happen or what effects the situation will have on their bottom lines.
And if they want to open up a new restaurant? Do they simply spread their existing staffs thinner and thinner? That’s what expansion is…it’s not hiring more staff to sit around doing nothing, it’s building a NEW restaurant or a string of them, which entails…yep, hiring more people. Trouble is, if you don’t know if you can make more profit by building more restaurants, then you are going to be disinclined to build more restaurants until you are more certain they are going to make you money, because the title of your OP is correct…Business isn’t a make work project, it’s not about altruism, it’s about making a profit.
I’ll give a for-instance: For some time now there has been an iHop under construction in one of the towns near where I work. It’s been under construction for something like 8 months now. For many of those months it was just sitting there not getting built. Why? Most likely because of the uncertainty in opening the thing. The closest iHop is maybe 20 miles away, and I’ve noticed that business had fallen off…where you used to have to wait a minimum of an hour to get in on the weekend, now you can pretty much go right in. That’s probably a bad thing, even though I have never worked in the restaurant business. However, I’ve noticed in the last month or so business has picked back up (no idea why it fell off or why it’s better now)…and I also noticed that construction has resumed on the new one and it’s almost done now.
No…at this point many businesses are not expanding, and instead they are going into recession mode…they aren’t building new production, they aren’t buying new networks or putting in new infrastructure, and they aren’t hiring a lot of new people. They can do this for a time by small increases in productivity (generally by making the folks still working there do the work of all the folks laid off, but streamlining their business practices, etc), but that means their businesses aren’t going to be expanding…they are going to be standing still. Like I said, they can do this for a while, but eventually it will kill them, since their competitors might expand and thus capture some of their market share. Also, by making people do the more work for the same money, they build up resentment, and when/if the economy DOES turn around those folks will be free to go work for one of their less stupid competitors, which means they lose all that corporate knowledge and have to rebuild their staffs.
-XT