JI

The Problem with Job Creators

by yogthos

A common argument against implementing a wealth tax or closing tax loopholes is that the rich are job creators and if we didn’t bend over backwards to accommodate them they might leave taking all the jobs they offer with them.

Of course, it can be easily shown that such line of argument amounts to absurdity. As long as the business is filling a useful niche there is profit to be made. All that would happen if the original owner left is that the business would pass to a different owner who is willing to accept the lower profit margin.

However, there is a more fundamental problem with the notion of job creators that warrants discussion. The question we need to ask is how we ended up in a scenario where jobs are handed out by a small number of people who are able to hold the rest of us hostage to their whims.

To find the answer we’ll first need to take a look at how jobs are created in our society. There are two primary sources of jobs known as public and private sectors.

Public sector jobs are offered by the government and largely fill functions needed to make our society function. Some examples of public sector jobs include education, healthcare, and sanitation. Many of these jobs are what we refer to as essential work during the pandemic.

Meanwhile, the principal goal of jobs created by the private sector is to generate wealth for the business owners. Many of these jobs don’t have any clear benefit to the society at large. Some jobs created in this fashion, such as fossil fuel lobbyists, can even be considered harmful.

Most jobs in Canada are offered by the private sector, and exist for the sole purpose of generating wealth for the capital owning class. The value generated through the labour of the workers is appropriated by the business owners with the workers being paid a small portion of the value they produce in form of wages. It’s easy to see how this system resulted in massive wealth concentration with a mere hundred families accumulated more wealth than bottom six million families combined through relentless exploitation of the working class.

We now arrive at the core problem with the idea of job creators. Having affluent individuals being in charge of handing out jobs results in work being largely allocated towards increasing the wealth of these individuals as opposed to the needs of our society.

Millions of Canadians are working hard every day, but they’re not the ultimate beneficiaries of the wealth that they’re producing since their jobs often have low pay, poor benefits, and long hours. The wealth ends up being hoarded by a small minority while 48% of Canadians are $200 or less away from not being able to pay their bills.

Surely, Canadian workers should be the primary beneficiaries of the hard work that they’re doing. Yet, that is clearly not the case when they are being exploited for profit. Nor does the work performed at many of these jobs appear to have any inherent value beyond enriching the business owners. Labour in Canada is primarily allocated towards the whims of the capital owning minority at the expense of the majority.

Now that we’ve discussed why the role of job creators is inherently problematic, let’s take a look at a couple of concrete steps we could take to remedy this problem.

A first step would be to create more jobs in the public sector. As we saw earlier, these jobs directly improve the quality of life for all citizens of Canada. Strengthening our public sector helps ensure long term stability of essential services that we all rely on. Therefore, this type of work should be encouraged and celebrated because of its inherent social value.

A second step would be to encourage cooperative ownership in the private sector in the form of government loans and subsidies. When the workers own their business they become direct beneficiaries of their own labour without anybody skimming surplus value off top.

Cooperatives directly help combat the problem of wealth concentration by ensuring that the profits are split fairly as opposed to being hoarded. Currently, around 240 billion dollars is being stashed away in offshore accounts by wealthy business owners. However, with a cooperative model the money generated by the business would be distributed to amongst the workers and ultimately end up circulating back into our economy.

Furthermore, studies show cooperatives to have a number of advantages over traditional companies. One study found that some of the cooperatives are both more productive and preserve jobs better. Meanwhile, increased worker participation in the decision making process results in cooperatives being more robust in dealing with demand shocks.

The research suggests that increased cooperative ownership would strengthen the Canadian economy against unexpected events, such as the current pandemic, going forward.

Not only should we not worry about job creators leaving Canada, but we should actively strive to get rid of job creators as a role in our society. People doing the work are in the best position to make decisions about how that work should be performed, and they deserve to be the primary beneficiaries of their work.