

How a job is created - mmaunder
http://markmaunder.com/2010/how-a-job-is-created/

======
philk
This is a tremendously simplistic analysis of the situation:

a) The sentence "You create jobs by helping grow existing businesses and
helping create new businesses." is practically a tautology.

b) "Creating jobs" is a complicated issue in the first place. If I start a new
company with fifty employees but drive a competitor who used to employ sixty
employees out of business, have I created any jobs?

c) "Creating jobs" is not the problem. "Creating good jobs" is closer to the
problem. You could easily create jobs by cutting welfare and offering all of
it's former recipients government jobs paying $50/day to dig holes, but this
would not be a positive outcome.

d) Creating good jobs in the long term is largely a problem of improving
productivity. This means investments in education and infrastructure, and
reducing drags on efficiency.

e) He's got a line in there arguing in support of bankers. Banking, like tax
preparation or law is a a field that is more "administrative overhead" than a
productive industry. Unless we are providing these services to foreigners
these fields provide little benefit to the country.

In conclusion I'm not really sure what the point of his article is to do
except complain that the government isn't helping him enough.

~~~
timr
Also, let's not forget that there's a huge class of people who aren't old
enough or wealthy enough to retire, but whose current jobs are going away
quickly. Those folks aren't going to be working as programmers at startups in
the brave new world.

Creating "good" jobs then becomes something more like _"creating good jobs
that can can keep the current population employed"_. I don't hear many people
talking in those terms anymore.

~~~
philk
I suspect we'd be better off if we invested in education for these folks and
retrained them to do something people actually want nowadays.

They might not be working as programmers at startups but there's still a lot
of worthwhile tasks we could get these people doing with the right preparation
and support.

~~~
timr
_"I suspect we'd be better off if we invested in education for these folks and
retrained them to do something people actually want nowadays."_

Problem is, evidence suggests that retraining doesn't work very well.

Here's a heartbreaking series of stories about furniture workers who were laid
off when their factory outsourced their jobs. The reporter followed them as
they took a community college training program, and tried valiantly to get
jobs at the Google data center opening nearby:

[http://www.npr.org/templates/story/story.php?storyId=1215161...](http://www.npr.org/templates/story/story.php?storyId=121516133)

[http://www.npr.org/templates/story/story.php?storyId=1215673...](http://www.npr.org/templates/story/story.php?storyId=121567306)

[http://www.npr.org/templates/story/story.php?storyId=1215767...](http://www.npr.org/templates/story/story.php?storyId=121576791)

Unsurprisingly, virtually none of the people got jobs at Google, and the ones
who didn't ended up doing things like working at WalMart at much lower wages.

It's a myth to pretend that we can re-educate enough blue-collar workers to
make a dent. We're going to have to find another way, and my suspicion is that
it's going to involve a resurrection of trade barriers until older workers can
retire.

~~~
philk
Thanks for the articles.

I'm not sure, however, that the examples cited within them are entirely fair -
they took middle aged furniture workers and tried to get them jobs at Google
after a few years retraining. Of course a guy who's had six weeks of classes
in Linux isn't going to get a job at one of the most technical companies in
the world.

What I was thinking was more along the line of retraining them to do useful
blue collar jobs - for example HVAC maintenance - which can't be easily
offshored and still is useful to society.

 _It's a myth to pretend that we can re-educate enough blue-collar workers to
make a dent. We're going to have to find another way, and my suspicion is that
it's going to involve a resurrection of trade barriers until older workers can
retire._

I'd be reluctant to do this, as it's essentially a tax on everyone else to
support them and essentially surrendering to the fact that we can get very
little value out of these workers.

~~~
timr
_" Of course a guy who's had six weeks of classes in Linux isn't going to get
a job at one of the most technical companies in the world. What I was thinking
was more along the line of retraining them to do useful blue collar jobs - for
example HVAC maintenance - which can't be easily offshored and still is useful
to society."_

Well, yes...the story is tragic because they never had a chance. But I
wouldn't be quick to assume that this is a story specific to Google. You'll
note that a lot of these people end up doing menial work, even after their re-
training program. One presumes that if it were possible to find better jobs,
these people would have found them -- they certainly sound like dedicated
workers. Instead, they're working double-shifts at WalMarts and prisons.

 _"I'd be reluctant to do this, as it's essentially a tax on everyone else to
support them and essentially surrendering to the fact that we can get very
little value out of these workers."_

That's one way of looking at it. Another way of looking at it is that we've
consistently exploited cheaper labor markets to undermine our own, without
building non-US markets for our own products. Moreover, many of these foreign
labor markets have been playing currency games to ensure that US workers can't
possibly compete. It's a system that's rigged against US production, and
taxing it is one way of reintroducing balance.

~~~
yummyfajitas
_One presumes that if it were possible to find better jobs, these people would
have found them -- they certainly sound like dedicated workers. Instead,
they're working double-shifts at WalMarts and prisons._

I suspect if it were possible to find better jobs in Lenoir, N.C (Pop.
16,000), they would have found it. In fact, they probably would have found
better jobs anywhere in the Hickory-Lenoir-Morganton statistical area (Pop.
360,000).

On the other hand, there are plenty of data center technician jobs in Newark
and other parts of northern NJ. I don't see any reason to believe the people
in this story made any effort to seek them out.

~~~
timr
If you read the articles I posted, you'll find that they talk about that
point. The comments also discuss it extensively.

The problem with that argument is that while you're almost certainly right,
there are a lot of reasons that people get stuck in one place -- poverty,
houses they can't sell, sick family, etc. -- and it's fundamentally
unrealistic to expect everyone to move to find a job at a data center. Few
work forces are as mobile as a 20-something programmer with no kids.

Also, given that the cost of living is quite a bit higher in New Jersey than
Lenoir, North Carolina, one has to carefully examine the risk/reward of the
decision to move. Maybe it would work out, but for a lot of these people I
suspect they'd be no better off than working at WalMart in Lenoir.

------
timr
Oh, come on. Saying that a job is created by "growing existing businesses" or
"creating new businesses" isn't insightful or useful; it's a tautology. It's
like saying that winning a war is simply a matter of killing more people than
the other side. Easy as pie.

I know that we all like to get huffy and pretend that our favorite ideology is
the one that has all the right answers for making jobs, or eliminating
poverty, or creating world peace, but ultimately, _adults_ have to acknowledge
that there are going to be problems in the world that politicians can't solve.

Obama can't make your startup succeed. Congress can't make someone want your
product. But they _can_ do more basic things, like making sure that you won't
starve to death when you fail, or ensuring that falling ill while starting
your company won't bankrupt you (or kill you). They can make sure that the
lights turn on, that clean water comes out of your faucet, and that you're
reasonably safe at home and work. You've got to take it from there.

~~~
seldo
Absolutely. Creating a better safety net WOULD really help innovation -- being
terrified of not having health insurance is a huge barrier to joining startups
for many people. And the current government has so far done nothing to help
that, and the republicans even less.

~~~
palish
What a strange fear -- being afraid of not having health insurance. I haven't
had a "real job" or health insurance for about a year now, and I don't care at
all. If something bad happens to me, I'll put the bill on my credit cards. I
doubt anything will happen though. I'm young, healthy, and don't get into car
accidents by being stupid. Statistics are on my side here, and I feel
completely comfortable living without health insurance for awhile.

Unless you have some kind of condition, is there any situation in which the
fear of not having health insurance is actually justifiable? I mean, if you
want to avoid paying off a huge hospital bill over time, then ok... but come
on, if you're starting a startup, gambling a 0.001% chance (or whatever) that
you might have to pay 4-5k off over a few years seems like an insanely good
bet.

Also, I heard from a friend (who is very probably wrong about this) that you
don't actually have to pay off a hospital bill. It won't count against your
credit score. Is this true? I would never do something like that, but... if
not paying the bill doesn't count against your credit score, then I can see
why people might not pay it.

~~~
pbrown
I take exception to most of this statement. My story: At 25 years old, I took
every penny I had in savings (about $300k) and started a company. I "created"
7 well-paying jobs. I put every single penny I had into my company. I had
"major medical" insurance, which I paid about $600 a month for.

Two years later, we were doing about 2 million a year. Still, I poured every
penny I had into the company "creating" additional good-paying jobs. Then I
had a stroke. Yes, at 27. Because the doctors could not find a "reason" for my
stroke, the insurance company paid a grand total of $2700, mostly for the
ambulance and the care I received in said ambulance.

I was left with a bill of $67,000. Yes 3 zeros. Because of how long I was in
the hospital and recovering, and because my business was based on
relationships with my clients, the business faltered, and I eventually shut it
down. I am now paying off every cent of what I owed on the business, as well
as that $67k in medical bills.

Moral of the story: don't think you're invincible because you're young, or
because you don't have a pre-existing condition. Also, I can absolutely assure
you that medical debt DOES affect your credit.

Here's the crazy part. I'd do it all again in a heartbeat, and I will.

~~~
lief79
I'm assuming you did not have group insurance at some point so it was deemed
preexisting? Otherwise, how did they get out of paying for it?

------
potatolicious
> _"I’m trying to create jobs so hard that I work without a salary. Not only
> that but I invest my life savings into the cause of creating jobs. I also
> work harder at my job of creating jobs than most people work at their normal
> job."_

I found this bit quite disingenuous. Yes, he is a business owner, and yes, he
is part of the demographic of job creators - but "job creation" is not his
title nor his primary intent (unless I've grossly misunderstood his startup
idea).

Founders are in it to create a product and get rich - some have higher-order
ideals for what they want to do on their road to riches, but to pretend that
you are not acting out of your own self-interest is disingenuous.

Maybe I'm reading this all wrong, but that bit sounds to me like trying to
appear as a populist folk hero when you're really not.

~~~
dnsworks
"Maybe I'm reading this all wrong, but that bit sounds to me like trying to
appear as a populist folk hero when you're really not."

Cut him some slack. He's from Seattle, it's a common attitude there. Having
lived up there for a while, the start-up scene seemed to mostly focus on it's
"we're not from San Francisco so nobody respects us" inferiority complex.

~~~
potatolicious
Actually, I live here - but I'm not in a startup ;) People here are nice
enough - distant, antisocial, but nice.

~~~
dnsworks
Don't get me wrong.. I actually liked a lot of Seattle .. At least the coffee
shops, donut shops, and cupcake shops (Seattle is good at foods which cater to
seasonal depression eating!).. Plus I met my two favorite Hacker News users
there (troyd and carlcoryell).

But beyond that, Seattle as a place for start-ups is just strange. At every
happy hour, startup meetup, startup coffee event, whatever, invariably the
theme always turned into this self-righteous "Seattle is just as important as
the Silicon Valley, why don't we get the same respect? I mean we have
Microsoft, Amazon, Boeing, and .. uhm .. that other company".

------
tjmc
I'm always wary of founders that say "we want to be the next [ _large company
name_ ]". It immediately identifies them as followers rather than leaders and
shows their focus is on making money or achieving status above solving
problems for customers.

No wonder he's asking for a handout.

~~~
jackowayed
I don't think that was his point. His point was just, "Hey, government, you
know who created a whole bunch of jobs? Google! I'm trying to also grow into
becoming a giant company like Google did."

In this context, saying "I'm trying to be the next Google", is just like an
NFL team saying, "We're trying to be the next New Orleans Saints." All it
really means is, "I'm trying really hard to succeed."

~~~
tjmc
What more important to him though - growing as big as Google or creating
something so good that his company might get that big? The way he frames his
goal is a classic "tell" regarding his focus.

------
jackowayed
How to eliminate the need for more jobs: Use 10 different colors of text in
your article, causing half of your readers to kill themselves.

Seriously, 1 accent color is more than sufficient.

~~~
jason_tko
He's creating jobs for graphic designers. :)

~~~
tsally
Or eye-care professionals.

------
Yrlec
It's not a matter of creating or destroying jobs. It's a matter of
productivity. During the past 200 hundred years, employment rates have stayed
more or less the same (compared to the revolutionary improvements in standards
of living we have accomplished). What has gone up is our producitvity.
Sometimes improved productivity creates jobs (through new business) and
sometimes it destroys them (people become redundant) but for society overall
it's a net win.

------
steveplace
It is not the responsibility of the US federal government to guarantee
employment. They are being treated as they should.

------
richieb
Cringley had a similar article few days ago:
[http://www.cringely.com/2010/02/the-cringely-2010-not-in-
sil...](http://www.cringely.com/2010/02/the-cringely-2010-not-in-silicon-
valley-startup-tour/)

