I remember thinking that when Ronald Reagan first proposed the idea of “trickle down economics” aka “supply side economics” back in the early ‘80s that it sounded like a good idea. The rich invest in new businesses which create jobs which means a good deal all around, right?
Since then we’ve seen a lot of rhetoric about economics, and precious little of it seems supported by anything other than propaganda. So I’d like to add a few anecdotes from my own life on this subject. Now, any statistician will tell you that a sample of one is inherently biased. So perhaps those of you reading this would like to consider your own experiences and weigh in on the subject.
The first full-time job I had after college was an extension of a part-time job I had during my last year in school. I worked for several years as night manager of a fast food restaurant. The interesting thing about this is that my boss, the guy that signed my paycheck, wasn’t rich. At least he wasn’t borne rich. He’d come over from Cuba at 15, in 1960, with the shirt on his back. He worked 60 hours a week for $60 washing dishes when he landed in New York City, became a waiter, saved his money, then he and his wife bought the restaurant franchise where I worked. Jesse, the last I heard of him, owned two restaurants and a half-interest in a jewelry store. I always thought of Jesse as a great American and a true success story. In the time I knew him, he kept a payroll of three full time and anywhere from six to twelve part-time employees going, mostly college students.
The second full-time job I had was working in a small flying school as a dispatcher. Look, no one who hasn’t been in that business will appreciate it when I say that Norman, the owner, who probably didn’t make a hell of a lot out the school, kept it going for at least ten years that I know of. Any business in aviation is chancy; look how many major airlines have failed in the last twenty years. Business in general aviation is almost like asking to fail. Somehow, though, Norman kept going. While I worked for Norman I saw dozens of instructor pilots come and go, student pilots get their ratings and hire on as instructors, then leave for charter jobs. Pilots, most of whom don’t know much about anything other than flying, were always criticizing Norman for the way he ran the business. I don’t recall ever seeing any of them bring in a single new student pilot, which, somehow, is what Norman managed to do fairly regularly. Even in the lean times Norman kept the school going and paid his employees regularly.
I have a lot of respect for Norman. I hope he managed to sell out for something decent and live comfortably. He sure as hell earned every penny the hard way.
I worked for a firm of lawyers for about six years. Most law firms are relatively small businesses, a couple of partners, some associates, maybe a paralegal or two, a secretary, perhaps a receptionist if it’s a well-to-do firm. This too was a family-owned business, and I worked for the family. No one invested in us. If people needed the service we provided, they came through the door, and we helped them when we could, and they paid us accordingly.
Most recently I’ve worked for an engineering firm. I won’t say much about that except this: it’s a small business, family owned, and except recently, with the down-turn of the economy, the only investment that business has had is in the hard work and devotion of its owners, people for whom I have the utmost respect.
So out of a career spanning nearly forty years and I truthfully don’t know how many jobs, almost all of them have been for small businesses that usually were family owned. One thing I’m sure of: the only investment made in those businesses was by the owners and operators. I don’t want to get into any discussion of whether they did it themselves; that’s true up to a point, certainly.
My point is this: my experience, this sample of one, is that jobs come more from entrepreneurs and small businesses, people with a dream, if you will, than large businesses. Does this refute trickle-down economics? That isn’t my intent. I think one should consider, however, that the American Dream isn’t about the little guy going to work for the big guy which is the essence of “trickle-down economics” however you look at it. I’ve worked for people who lived the American Dream, and I sure as hell know the difference.
How about you?