Job Creation and Government

Job Creation and Government JOB CREATION SHOULD NOT BE GOVERNMENT'S RESPONSIBILITY Government in all capitalist nations is actually responsible for efficient allocation and diversion of resources and not for creation of employment opportunities for the people. Capitalist countries thrive on the principle of entrepreneurship and in such countries corporations literally control all economic activity. For this reason, it is impractical to expect the government to intervene when employment opportunities are scarce.

Instead government's intervention must be limited to efficient allocation of economic resources and regulation of financial markets through fiscal measures during times of economic slow-down. But under no circumstances, should the government be expected to raise employment level in the country because it is essentially incapable of carrying out the task successfully. It has been noticed that when government is assigned the task of job creation, it does so inefficiently usually hiring more people than needed for various government sponsored projects.

During the Great Depression for example, government decided to initiate a program for job creation known as WPA but it was noticed that this program was a major failure when it came to creation of real wealth. This is a very interesting example of why and how government fails to generate real jobs and explains why this task must only be handled by the corporate sector. Every time government decides to increase employment level, it announces allocation of funds for various projects.

Immediately governmental agencies embark on different kinds of projects, most of which are either not needed or are badly planned. The result is wastage of capital and labor as more people than needed are hired and their skills are wasted on useless tasks. Government would hire staff to study the feasibility of its projects, hire even more people to make financial estimates, and few more would be assigned the task of overseeing the whole project. But most of these people are simply not needed.

They are hired to show that government is serious about job creation. It is also felt that when government is assigned the task of job creation, it not only fails to create more employment opportunities but it actually decreases the number of jobs on the whole. This is because as more people are absorbed in the public sector, this results in expansion of public organizations at the cost of private ones.

In other words, people who would have otherwise been used by the private sector for creation of real wealth are not diverted to the public sector where there are used as surplus labor and never serve the real purpose of wealth generation. Milton.