Incomplete analysisReader comment on: Staples and Job Creation Submitted by Fast Eddie (United States), Jan 10, 2012 09:22 How interesting that the Romney critics raise the issue of the jobs lost at higher-priced/less efficient competitors and ignore the fact that the money which is saved by customers shopping at the more efficient stores (Staples in this instance) is then put into the economy as spending that would not have occurred except for the fact that the extra money is available because the customers spent less at Staples. In other words, given a fixed amount of money to spend, the customer who has a Staples available will have money left over after buying his supplies, as contrasted with the customer who must spend more money at a non-Staples. And this 'left over' money will then be spent on other goods and services, an act which itself creates jobs. The bottom line is that lower prices at stores like Staples do not have a NET negative employment effect because the money that is not spent at Staples is spent elsewhere. It's too bad for the competitiors who, indeed, shed jobs, but it is good that other jobs are created to absorb the money now not spent at Staples competitors. The sort of analysis used against Romney here is akin to that used to justify huge govt. borrowing to 'stimulate' the economy, given that the stimulus funds must be extracted from the economy somehow, usually by a combination of taxes and borrowing, both of which have long term negative effects which easily offset the stimulus effect. Note: Comments are moderated by the editor and are subject to editing. Comment on this item |
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