Who Creates Jobs? The Rich of Course

I’ve lived through eleven recessions. Some were short lived others lasted for some time.

Each one of those recessions generated the same rhetoric.

The front pages and talking heads, wringing their hands over rich vs. poor, and the inevitable income inequality that follows.

Oh, the unfairness.

Who could possibly agree with greedy CEOs making hundreds of times more than their poor unfortunate hourly workers, toiling day-after-day on the factory floor, living paycheck to paycheck?

As the rich get richer and the poor get poorer, the knee jerk reaction is to vilify the rich guys for getting rich, supposedly, off the backs of their unappreciated workers.

The rich simply exploit the worker by demanding unrealistic goals, impossible deadlines, while paying bare minimum wages, slim benefits, and laughing all the way to the bank.

How Stupid Do You Think Workers Are?

Companies produce goods and services that customers want. Big Screen TVs individually wrapped slices of cheese, cars with heated seats and cup holders, Sham-WOW cleaning rags and Ginsu Knives.

The company challenge is to find a way to produce these products, get them to market, sell them at a profit, and satisfy their customers.

How do you accomplish that with an entire country of underpaid, unappreciated, unhappy employees? The answer is very simple.

The majority of workers in America are not underpaid.

According to the Bureau of Labor Statistics the average hourly pay in America is $31.85 April 2022.

That’s $66,248 a year. That means with a workforce of 158 million at least 79 million are taking home more.

That’s over $3 TRILLION Dollars just for the middle.

If the other 79 million only made minimum wage ($18,200/yr. in Montana), that they of course don’t, that would come to another cool $1.1 Trillion.

The majority of Americans have the good sense to accept, or look for jobs, where their skills and experience are appreciated and rewarded by their employers.

How does the employer benefit from a factory, or retail floor, full of unhappy, underpaid, workers?

Is it possible that their work might be less than exemplary? Do you think employers somehow miss this fact?

Who buys inferior products? A still better question — Who stays in business making inferior products?

I’m reminded of the old astronaut joke, “Who wants to sit on top of a rocket with 50 million parts made by the lowest bidder?”

How Does Job Creation Happen?

People with a dream see a need not being filled, or that could be filled better or more profitably, and decide to fill it.

People start sole proprietorships, home-based businesses and grow them into full time businesses.

People max out credit cards, get loans, mortgage their homes, borrow from family members and start small businesses.

When the business outgrows the owner, jobs are created.

I somehow missed the exact spot that greed and exploitation, of the not yet hired worker, fits in here.

When they do finally hire, the vast majority of companies in the US are less than ten employees.

But you can bet they all want the best 10 employees they can possibly find.

How the Rich Create Jobs

Rich folks will tell you that it’s just not possible for them to create enough jobs to make any difference.

After all, they can only buy so many clothes, so much food, so many houses, etc.

They would surely buy more than you and me, but still not enough to really make a dent in the economy.

On the surface that argument sure seems to make a lot of sense — until you move it from your world to their world.

To sympathize with victims, you put yourself in their shoes, not the other way around.

Most everyone knows what it’s like to have little or no money, but fewer know what it’s like to have a lot of money.

So, if I’m rich I’m going to try to make the case that I’m just like you.

I buy shoes, but only a few more than you, and maybe mine are a little higher priced.

But my money won’t have any appreciable effect on the economy or unemployment.

Do The Rich Really Create Jobs?

Let’s begin with those who are not rich. You and I go out and buy a pair of $25 dollar jeans. So do the rich.

So, it would seem on the surface that neither of rich, poor, or middle class would move the needle very much.

That of course is flawed thinking. Why?

Because it’s thinking on too small a scale. It’s puts rich and poor in the same class and that’s far from accurate.

Let’s Examine the Real Facts of Rich Purchasing Power

Those of you who read my blog know that I am a numbers guy.

I put emotion aside and look at the facts then I can make my emotional decision but not before.

So, the question becomes what can the rich buy that you and I buy and how much will their purchasing power contribute to job growth or job creation?

Here Are the Census Numbers

• U.S. Households number 122,354,219 (2020 US Census)

• One in 50 of those households has an income of $250,000 or more

• That’s around 2.4 million households with incomes of $250,000 or more.

• Average number of people per household in the U.S. is 2.61.

• That amounts to about 6 million purchasers.

How Do the Numbers Relate to Job Creation?

Let’s go back to our jeans.

If we buy three pairs of jeans for $25 dollars each, that’s a lot of money from 122 million households. ($9.1 billion to be exact)

But what happens if the rich buy three pairs of jeans?

Seventy-five dollars’ worth of jeans for 2.4 million people would be $172,000 dollars if they all bought jeans on the same day.

If you take it further to 2.4 million households with 2.61 people buying $75 worth of jeans, you’re at $469,800,000 for one day.

That’s a long way from $9.1 billion.

Let’s Just Look At the $75 Dollars

Consider that each of us spend a dollar amount everyday sometimes more sometimes less.

We buy food, gas, pay bills, mortgage or rent, and many other things.

Looking at your monthly expenses how much do you average per day of all expenses for a month?

I think you’ll be surprised.

If the rich were to average spending $75 each day of the year how much would that be? Seventy-five dollars X 365 days x 2.4 million households = $62,780,000,000 billion/yr.

Don’t forget there’s 2.61 people in those 2.4million households. How much would the additional 1.61 of them spend each day?

Sixty-two billion would fund half the budget of the Department of Education.

About the same amount we’ve spent on Ukraine.

A $250,000 yearly income would break down to $120.19 per hour for a 40 hour a week job, $684.93 per day or $20,833 per month.

Keep in mind the minimum a major league baseball player gets is $570,500 a year in 2021.

The Rich Create Jobs ONLY the Rich Can Create

Not only do the rich create jobs, but they also create jobs ONLY the rich can create.

But Tom, what about the argument above?

Let’s reverse that argument for a moment.

Instead of talking about what the rich can buy that you can also buy; let’s talk about what they can buy that you can’t — and how that creates jobs.

OK Rich People, Let’s Create Some Jobs

The smallest Gulfstream jet, the eight-passenger G150, costs $15 million. The big-daddy G650ER, which holds 19 passengers and can fly from Macau to Las Vegas nonstop, costs $68.8 million. (SOURCE)

So what? — most people only buy one right? How many jobs are created to manufacture that single plane?

Someone makes the parts. Granted some parts could be made overseas by cheap labor and shipped here.

Gulfstreams are assembled in Savannah, Georgia. I guess that could be done overseas too but that might create theft of technology.

But that’s not all the costs.

Fuel, regular maintenance, trip expenses could run around $2,300 per hour but that’s just the beginning.

You must park it someplace, parking space, pilots, crew costs, insurance and storage will set you back about $600,000 or so each year.

Someone must clean, maintain, administer, paint, and guard the building where you house your plane.

An engine rebuild will run a cool $1 million.

If you want your name on the side, and a fancy paint job, figure $200,000, and you could run up a $300,000 tab to redecorate the cabin.

Paint manufacturers, oils and lubricants, man-hours, tools, wire, electronics, computer components, carpet, upholstery, wood, metal, hydraulics, fabrics, communications, trucking, shipping, packaging, furniture and metal screws and bolts — how many jobs and man hours will have something to do with this plane during its lifetime?

And the owner only bought one.

I think I see this single purchase creating at least a few jobs.

Some Final Thoughts

Multiply my plane analogy by Lamborghini, Ferrari, Rolls Royce, Bentley, Cadillac, Lexus, Tiffany’s, Rodeo Drive, the Four Seasons, Carnival Cruises, Versace, Las Vegas and Broadway.

Every single one of those products has employees attached to them.

Mechanics, gas stations employees, tire manufacturers, maintenance, repair, furniture, plastics, salespeople, delivery people, cleaning, construction etc. Are you beginning to get the picture?

Are there enough underpaid, unhappy employees in the world to build, service and maintain all the rich folks stuff?

Try to tell me again how the rich don’t create jobs!

That dog won’t hunt.

In fact, another Gulf Stream Jet just rolled off the line and someone bought three pairs of jeans.

I hope you enjoyed reading this and that you'll subscribe. Thank you.