I would like to take this opportunity to address a misconception that seems genuinely widespread. The fallacy: cut company tax rates and this will create jobs. It may stimulate investment—or just result in an improved financial position—a but not in and of itself generate employment. Why?
The stark Truth is: Companies do not want to employ people.
(In fact, it is an action of last resort.)
Corporations have no morality. They are money-making machines of our own creation. Profit is the purpose and it is never enough. When push comes to shove, notions of morality and “doing the right” things goes straight out the window.
This is why we need a robust, effective and efficient regulatory framework to shape these entities’ actions to society’s principles and science as they pursue profit.
The key exception to ethical business operations brought about by government intervention is responsiveness to consumer behaviour. But only because this affects the bottom line. Consumption of goods and services creates the demand that allows businesses to expand. Make no mistake, though – if this demand can be met using technology and automation, this will be done. Adding another person to payroll will only occur in the increasingly rare case where alternatives are not feasible or an additional worker is more cost-effective. Pride in employing more people is quaint, if it ever really existed at all.
We can scarcely imagine the extent to which automation, AI (Artificial Intelligence) etcetera will replace entire sectors of the workforce. Companies will do the math and “right-size” (i.e. sack staff) without hesitation. Many advocate for a Universal Basic Income in response, but that is a topic for another day.
Companies don’t want to employ people. We should stop deluding ourselves that this is their function at all.