Reader 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