It is time to lay to rest the idea that rich people create jobs. I have been in the horse business for 35 years, and I can attest that customers create jobs, not rich people. No successful business owner, regardless of income or taxation, will hire more workers than needed to meet customer demand for their products and services.
In the recent great recession hundreds of thousands of people lost their jobs. They lost their jobs because customers dried up for the goods and services the workers produced. In order to stay afloat, businesses facing sagging demand had to lay off workers. Those terminated workers in turn reduced their spending, and the cycle repeated itself.
It is a basic fact of business that less customers means less jobs, and more customers mean more jobs. A simple example can be found in auto manufacturing. When the demand for automobiles goes down, less cars are produced and less workers are needed. When the demand for automobiles goes up, more cars are produced and more workers are needed. This fluctuation in jobs and production is created by customers, not the income or taxation of rich people.
Jobs are created by demand for products and services. The largest group of people in the United States who create demand is the middle class. In the 1950’s and 1960’s the middle class grew at a tremendous rate. Demand for goods and services was high. The economy was healthy. Businesses were successful. In recent years, the growth of the middle class has stagnated. At the same time, the purchasing power of the middle class has gone down. The faster growing segments of the population have been the very rich and those below the poverty line. Neither of these groups have enough purchasing power by themselves to sustain a healthy demand and a healthy economy.
Customers create jobs. In the horse industry, the super rich only make up a small portion of the market. The largest group of customers for horses in the United States is the middle class. The solution to increasing jobs is straight forward. Stop worrying about the rich as job creators and build up the purchasing power of middle class. Business owners will take care of the rest.