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Understanding Job Creation: The Role of Effective Demand and Wealth Distribution

Inequality contributes to unemployment, with effective demand being crucial for job creation. Contrary to the belief that wealthy individuals create jobs, it is the poor and middle-income earners who drive demand by spending their income. Rich individuals often save their wealth, leading to a lack of consumer confidence and investment opportunities. This analysis highlights that when everyone has spending power, jobs are created. The need for economic policies that empower the lower and middle classes is essential for sustainable job growth and economic stability.

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Understanding Job Creation: The Role of Effective Demand and Wealth Distribution

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Presentation Transcript

  1. Inequality Creates Unemployment.

  2. What Creates Jobs? • Production creates jobs! • Production is the result of effective demand.

  3. What Is Effective Demand? • Effective Demand exists when the masses of people purchase goods and services.

  4. Who Creates Jobs? • Poor and middle income people spend their money to support their lifestyle. • This creates demand and produces jobs.

  5. The Rich Do Not Create Jobs • Rich people have too much money—they cannot spend it on every day expenses. • So much of it waits for investment opportunities. • Investment opportunities are created by effective demand.

  6. After-tax corporate profits at an all-time high. Corporate profits: Bureau of Economic Analysis • The problem isn't lack of profit!

  7. It is lack of confidence that consumer demand will pick up in the future. • People CANNOT AFFORD to buy… • So corporations are not hiring to produce.

  8. Want to Create Jobs? • Give money to people who have little. • They will spend it • Create Jobs • And give the Rich an opportunity to invest and make more money!

  9. Income Growth 1979 - 2007

  10. Wages, Profit & Productivity If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.

  11. Who Gained from Economic Growth?

  12. Wealth Distribution: Actual vs. Perceived & Desired

  13. Historically, Who Pays Tax?

  14. The Top Marginal Tax Bracket

  15. Austerity Prolongs Recession

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