It’s an argument more Democrats and Progressives should be making these days. Without greater consumer demand, the odds of getting capitalists off their butts and back into hiring mode is remote at best.
Nick Hanauer, a self-declared rich guy says that it’s the middle class who are the real job creators in America, not the rich guys like him.
I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.
That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.
He’s 100% right. It’s demand that creates jobs, not wealth. Rich guys who own companies are not the job creators, they’re just the accumulators of capital. The real creation comes when consumers consume and businesses invest. You want job creation? Demand aggregate demand!
That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.
And that’s what has been happening in the U.S. for the last 30 years.