How a job is created

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

by mmaunder • 16 years ago

66 63 16 years ago

jackowayed2• 16 years ago

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• 16 years ago

He's creating jobs for graphic designers. :)

tsally• 16 years ago

Or eye-care professionals.

timr6• 16 years ago

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.

seldo2• 16 years ago

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• 16 years ago

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.

ryanwaggoner4• 16 years ago

Creating a better safety net WOULD really help innovation

This seems remarkably unsupported. I don't think of Europe as being very innovative, despite their impressive social safety net. And I think of Asia as being very innovative and entrepreneurial, despite their lack of much of a safety net. Hmmm...

The reality of a great safety net is that someone has to pay for it. Who is that?

tici_88• 16 years ago

His point was a very simple argument, based on plain old common sense. It was intended to be simple.

It becomes insightful when you take his point and put it next to the jarring inconsistency in our reality. Fact is, nothing done by Washington has done anything remotely to help this in a meaningful way.

Jobs aren't created by legislating them, as is currently fashionable in believing. Jobs aren't created by shoveling truckloads of money to special interest. It is the people "in the trenches" who are trying to get stuff done that create jobs.

Sometimes it is worth repeating the common sense truths as we often tend to loose sight of them.

abstractbill3• 16 years ago

Jobs aren't created by legislating them, as is currently fashionable in believing.

I've never encountered anyone who believes this. Have you, really?

marilyn• 16 years ago

While you have a point, Obama isn't going to make anyone's startup succeed, you are off base. Saying that a job is created by "growing existing businesses" or "creating new businesses" is insightful, as it gets back to the core of what is needed. As far as the private sector is concerned, jobs are created by growing and new businesses.

With the massive amounts of cash that has been thrown at shrinking big businesses in the recent past, it is important to recognize that over half of Americans work in small business, and it is the small businesses that are having the most difficult time accessing capital. Not just in the valley, but the mom and pop, brick and mortal business that should be considered the bread and butter of society.

Yes the author is focused on his own plight, in a slightly whiny and entitled sort of way, but that doesn't mean he doesn't have a point.

yummyfajitas5• 16 years ago

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.

All of these things are provided by your state, not congress.

tjmc2• 16 years ago

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.

jackowayed2• 16 years ago

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."

tjmc2• 16 years ago

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.

potatolicious3• 16 years ago

> "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.

dnsworks2• 16 years ago

"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.

potatolicious3• 16 years ago

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

philk3• 16 years ago

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.

timr6• 16 years ago

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.

philk3• 16 years ago

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.

necro• 16 years ago

The way to create the jobs needed in the US, is to take them away from someone else. The real problem is that technology (communication, transport, accessibility of buyers) has leveled the playing field for billions of foreign workers to compete in the US market. This means that if your job is to assemble widgets by hand, you better be ready to have the same kind of pay and living conditions and income as a billion foreign workers. That was the past, but now we keep arming the foreign countries with progressively higher level jobs by shipping the howto there. Years ago you would get your product electronics assembled in a box offshore. Now, you not only have the electronics made there, but also the ICs, and even much of the basic design work is done offshore.

So if this guy has a start up that creates a competitive technological vector away from the foreign countries' abilities, it's most positively the RIGHT way to create jobs. Do not count on the large companies doing this. Their way of creating efficiency and reducing economic drag is to ship the jobs off shore so their stock holders are happy (most of which are probably foreign anyways so they dont give a rats what effect this has in the long run).

The more technology and the progressively higher ability jobs you ship offshore, the higher and smarter jobs you need to have left in country.

It's simple...if a few billion people offshore can do the same job as you, and there is absolutely no transportation or communication barriers to have that job done offshore vs. in the US, guess what...it's done by the person that does it for less. If those jobs are assemblers, designers, engineers, you pretty fast run out of things all the American folks can do that others can't.

lionhearted• 16 years ago

> The way to create the jobs needed in the US, is to take them away from someone else.

The way to create jobs is to get people producing things that other people need and want and are willing to exchange things for. This could be through lower pricing or better quality in an existing industry, or it could be through creating a new industry. As long as any human needs or wants are unfulfilled, there's a possibility for a new jobs to created filling those needs and wants.

ryanwaggoner4• 16 years ago

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.

Call me crazy, but I suspect that we'd be much better off with a situation like this. Imagine the boost in motivation to improve your career prospects after spending a few weeks doing work like this. And surely we can find some use for a bunch of holes in the ground.

In contrast, I know an awful lot of folks who got laid off in the last 18 months who decided to just take some time to find themselves because they were getting unemployment.

iron_ball• 16 years ago

Replace "digging holes in the ground" with "repairing decaying bridges and highways." Remember that bridge collapse in Minnesota? Remember the spate of news articles about how many other bridges were in similar danger over the next decade? And then silence!

abscondment• 16 years ago

He's got a line in there arguing in support of bankers.

As I read it, he's complaining that the government views VCs as bankers. I think it's legitimate to consider the differences between the traditional loans/bonds/etc of banking and the investments VCs make.

yummyfajitas5• 16 years ago

Regarding c), the crappy government jobs digging holes probably would be a positive outcome.

People on welfare can sit around watching TV, playing sports or engaging in other recreational activities [1]. This is probably more pleasant than getting a job. If we replaced recreation with hole digging, people on welfare would have a greater incentive to find a job.

Regarding d), this is only true if additional education and infrastructure provide a greater benefit to the economy than their opportunity cost (e.g. the cost to business and consumers of the taxes paid to support education/infrastructure). It's not by any means clear that this is the case.

[1] Based on obesity rates among the poor, I suspect watching TV is much more common than playing sports.

sethg3• 16 years ago

I would bet that in some poor neighborhoods, watching TV is safer than playing sports.

ja30278• 16 years ago

Regarding "a": I don't see a refutation of the idea anywhere in your response.

Regarding "b: No. But driving the competitor out of business assumes that you're doing the same task more efficiently (with fewer people), which is theoretically better for the economy as a whole, since it means that the same goods/services are produced at less cost, and frees up labor for other things.

Regarding "c": How exactly would we be worse off as a society in this context? Replace "dig holes" with "pick up litter" or some other menial but necessary task, and it looks like a net win to me. You expend the same money, but actually get some small societal return on your investment. Can you actually argue that welfare recipients _ought_ to be idle?

Regarding "d": Aren't higher taxes and greater difficultly in obtaining starting capital "drags on efficiency"?

Regarding "e": Imagine you have a brilliant idea on how to produce, market, and sell widgets. To get started, you need new equipment, a storefront, and some working capital. How do you obtain these things? If someone lent you the capital to get started, and you created a new business as a result, are they not (at least tangentially) engaged in a 'productive' activity?

sethg3• 16 years ago

Replace "dig holes" with "pick up litter" or some other menial but necessary task, and it looks like a net win to me.

If there are already people employed by state or local governments to pick up litter, they won’t be happy to see former welfare recipients being given the same job for a much lower pay.

OTOH, one thing the current stimulus package did was give money to state and local governments, so that they didn’t have to lay off sanitation workers (or teachers or police officers or etc.) for lack of money. Recessions are particularly hard on state governments because most state constitutions require balanced budgets, but recessions cut into their tax revenue at the very same time that demands on government services increase.

steveplace2• 16 years ago

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

Yrlec• 16 years ago

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.

richieb• 16 years ago

Cringley had a similar article few days ago: http://www.cringely.com/2010/02/the-cringely-2010-not-in-sil...

How a job is created

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