Politician's bragging about the economy
If a politician promises to bring back jobs of any kind. Or promises job creation. Run away.
I'm not trying to pretend that politicians have NO power over the economy. They absolutely do. But, that power is not something which can really be controlled to a specific end and the effects are anything but fast.
I saw that Trump was bragging about unemployment rates. Truthfully, at less than 2 years into his presidency the effects on the economy which are direct causes by the office of the president account for probably less than 20% of the effect. And even Obama likely can't take full credit for the full 80% remaining. In the grand scheme of things... even that effect is probably less than 10% of the total effect... so, like 2% overall? Sounds about right.
When a politician announces changes around things like taxes and labor laws, it has no immediate effect on existing businesses. Most existing businesses will keep trying to operate business as usual. If the changes are small, they might not be felt for years, if ever. Even if the changes are larger, if they are reasonably uniform (in that they impact all businesses or even just all competitors similarly) they may still have zero net impact.
Job creation for existing businesses is also, typically, driven not by available cash flow but rather by performance. No well run business is going to hire more people or raise pay simply because they have more money. With the exception that execs might receive bigger bonuses. Well run businesses will often hire EVEN IF they can't afford it on paper. They acquire and dismiss employees as the business demands it.
Where government has the biggest impact will be the establishment of net new businesses and things like international acquisitions and the likes. And I would say that the biggest impact would be on the latter portion.
If I live in Texas and I want to start a business. Regardless of the scope or scale of that business. I'm almost definitely starting that business IN the US, and we can probably even guess that it'll be headquartered in Texas.
I know a perhaps disproportionate number of people who have started businesses. And I've read interviews and biography's of even more.
I've never once heard of someone saying that the reason they started a business had ANYTHING to do with interest rates, business programs or anything else. While I'm not saying such people don't exist, the point is, government plays a very minor role in whether or not people start a business.
NOW, if I'm buying domestically or internationally, I may DEFINITELY consider minor variances in things like tax rates and perks governments are offering. But, how much does that ACTUALLY affect the average worker? Again, the impact is largely meaningless.
Industries are driven primarily by the success or failure of the industry and how competitive a particular industry is compared between differently geographic locations.
Manufacturing jobs are disappearing EVERYWHERE. And the places losing them slowest are the places with the lowest wages. IT jobs are fairly flat. There is benefit in having local, on site IT. Software is massive in North America, not because it is cheaper here (in fact, the opposite is quite true), but the talent pool is generally much more qualified.
Yes, there are cases where the money that government decisions affect may mean a new hire here or there or a layoff here or there. But, firstly, any business doing well enough is not impacted. And those jobs saved and lost by government decisions are such a small percentage they almost don't deserve notice.
Let's take an extreme example. Minimum wage in Ontario was hiked some stupid amount, from somewhere like $10-12 to $14 with another increase to $15 in the coming year. The increase was something like 32% if I remember. Anyway, this was a MASSIVE jump. I know one person who lost a job which MAY have been attributed to the wage changes.
Successful businesses need the people they need. Inflation will negate the benefits of the wage increase in time. Sure, some people lost jobs. Many small business owners are pissed. But, what was the actual net impact on unemployment in Ontario? Well according to this... 98k jobs. 88k down plus the 10k expected in growth. 98k equals... 0.32%. Less than a third of a percent. The single biggest job loss in Canada in 9 years! Mostly blamed on Ontario wage changes. Amounts to .32%! A 32% increase in minimum wage!
Now, I'm SURE these aren't the last victims of this. But, I hope that puts things into perspective. A MASSIVE change at the government level made only a fraction of a percentage of a change in employment levels. As I said, with time, inflation will negate the burden to business owners. So, from hereon out, the impacts will only get smaller. NOTHING Trump has done has been as large as this wage increase. So, how much do you think your politicians can actually do to protect YOUR specific job? Or create new ones for you?
I'm not trying to pretend that politicians have NO power over the economy. They absolutely do. But, that power is not something which can really be controlled to a specific end and the effects are anything but fast.
I saw that Trump was bragging about unemployment rates. Truthfully, at less than 2 years into his presidency the effects on the economy which are direct causes by the office of the president account for probably less than 20% of the effect. And even Obama likely can't take full credit for the full 80% remaining. In the grand scheme of things... even that effect is probably less than 10% of the total effect... so, like 2% overall? Sounds about right.
When a politician announces changes around things like taxes and labor laws, it has no immediate effect on existing businesses. Most existing businesses will keep trying to operate business as usual. If the changes are small, they might not be felt for years, if ever. Even if the changes are larger, if they are reasonably uniform (in that they impact all businesses or even just all competitors similarly) they may still have zero net impact.
Job creation for existing businesses is also, typically, driven not by available cash flow but rather by performance. No well run business is going to hire more people or raise pay simply because they have more money. With the exception that execs might receive bigger bonuses. Well run businesses will often hire EVEN IF they can't afford it on paper. They acquire and dismiss employees as the business demands it.
Where government has the biggest impact will be the establishment of net new businesses and things like international acquisitions and the likes. And I would say that the biggest impact would be on the latter portion.
If I live in Texas and I want to start a business. Regardless of the scope or scale of that business. I'm almost definitely starting that business IN the US, and we can probably even guess that it'll be headquartered in Texas.
I know a perhaps disproportionate number of people who have started businesses. And I've read interviews and biography's of even more.
I've never once heard of someone saying that the reason they started a business had ANYTHING to do with interest rates, business programs or anything else. While I'm not saying such people don't exist, the point is, government plays a very minor role in whether or not people start a business.
NOW, if I'm buying domestically or internationally, I may DEFINITELY consider minor variances in things like tax rates and perks governments are offering. But, how much does that ACTUALLY affect the average worker? Again, the impact is largely meaningless.
Industries are driven primarily by the success or failure of the industry and how competitive a particular industry is compared between differently geographic locations.
Manufacturing jobs are disappearing EVERYWHERE. And the places losing them slowest are the places with the lowest wages. IT jobs are fairly flat. There is benefit in having local, on site IT. Software is massive in North America, not because it is cheaper here (in fact, the opposite is quite true), but the talent pool is generally much more qualified.
Yes, there are cases where the money that government decisions affect may mean a new hire here or there or a layoff here or there. But, firstly, any business doing well enough is not impacted. And those jobs saved and lost by government decisions are such a small percentage they almost don't deserve notice.
Let's take an extreme example. Minimum wage in Ontario was hiked some stupid amount, from somewhere like $10-12 to $14 with another increase to $15 in the coming year. The increase was something like 32% if I remember. Anyway, this was a MASSIVE jump. I know one person who lost a job which MAY have been attributed to the wage changes.
Successful businesses need the people they need. Inflation will negate the benefits of the wage increase in time. Sure, some people lost jobs. Many small business owners are pissed. But, what was the actual net impact on unemployment in Ontario? Well according to this... 98k jobs. 88k down plus the 10k expected in growth. 98k equals... 0.32%. Less than a third of a percent. The single biggest job loss in Canada in 9 years! Mostly blamed on Ontario wage changes. Amounts to .32%! A 32% increase in minimum wage!
Now, I'm SURE these aren't the last victims of this. But, I hope that puts things into perspective. A MASSIVE change at the government level made only a fraction of a percentage of a change in employment levels. As I said, with time, inflation will negate the burden to business owners. So, from hereon out, the impacts will only get smaller. NOTHING Trump has done has been as large as this wage increase. So, how much do you think your politicians can actually do to protect YOUR specific job? Or create new ones for you?
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