Maker, Taker, Patriot.

Wall Street Journal senior economist Stephen Moore recently wrote a column about “takers and makers“, revealing that “More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined.

Twice as many people (22.5 million) work in government than in manufacturing (11.5 milion).

Upon hearing this, many will launch into their political persuasion’s talking points (regardless of leanings). But it isn’t that simple.

It’s not the 60s anymore

In 1960, about 8.7 million people were government employees. In 51 years, that number has almost tripled. I don’t have a breakdown of the increase in front of me, but a 300% increase is large no matter how you look at it.

Moore derisively calls these 22.5 million “bureaucrats”, which to me coveys the image of the corrupt Daley regime in Chicago or an uncaring, inefficient Department of Motor Vehicles (not what you get in Kalispell’s blue building).

Based on the comments I hear, most don’t view rank and file firefighters, police officers, teachers, train conductors, military personnel and the like as bureaucrats.

In one example, Moore mentions the doubled public school employment between 1970 and 2005, referencing a University of Washington study, as an example of government inefficiency given that standardized test scores haven’t doubled in that time.

Electric shock and cages

In the 1960s, students with Down’s Syndrome, mental deficiencies, autism or physical challenges were treated as second class citizens. Today, they learn as a part of mainstream student populations, just as employers do. Doing this requires increased staff. Some kids have a single staff member dedicated to them. Today we teach topics in school that didn’t exist in 1960, like computers, robotics and computer-aided design (CAD).

I don’t think anyone, with the possible exception of the current Montana Legislature, would wish for a return to the 1960s. Yes, that was sarcasm. Mostly.

If you look at the manufacturing and industrial changes since the 60s, it’s hard not to see the migration of the steel, textile and heavy industries overseas as having a significant impact on employment numbers.

While government numbers have gone up markedly, Moore didn’t address the disappearance of manufacturing and industrial jobs during that same period.

The falloff of employment in those industries didn’t happen in a vacuum.

Blame the third world

The industrial revolution in the U.S. transformed business: Steam, electricity, internal combustion.

In the last 20-30 years, it happened again; fueled by computers, industrial automation and the rise of the third world.

While these changes were decimating U.S. presence in industries like heavy equipment, steel and textiles manufacturing, we retain a reticence to pay anything above 1960s prices for commodities like steel, lumber and textiles.

We kept prices down and competed with cheap overseas labor through industrial automation and computers, but that cost jobs. When someone is laid off from a foundry job, where do they go?

If someone laid off after two decades in one of these industries has an opportunity to share their skills with young people looking to learn a trade, and in doing so, keeps their family off of taxpayer-funded public assistance – are they a maker, a taker or a bureaucrat?

If in that 20 years they didn’t take the initiative (on their personal time) to remain employable by learning a new skill (welding, software, repairing industrial robots, etc), who’s responsible?

Meanwhile…

Industrial automation is replacing cheap third world labor with labor that’s even cheaper. China supplants India, who “stole” the work from US workers. Advances in automation allow us to keep prices low and allow our businesses to avoid paying modern wages for dangerous work now done by machines, but they also eliminate third-world jobs here in the states.

Are those jobs we want? That laid off industrial worker who now teaches…do we *want* them teaching a 1960s or 1970s skill in a 2011 economy?

Businesses of all sizes outsource work because it’s not efficient to keep people on staff to do that work. Business is then more flexible and the jobs we keep are usually more secure, but low-value employment is hammered by it. Is that good or bad?

Nothing is as simple as the politicos and power hungry want you to think.

Want to be patriotic? Invest in yourself, make something that people want/need, and create your own future.

Business owners: Do the math when putting on a promotional event

I ran across a couple of whining news stories recently that talked about paying celebrities like Paris Hilton or Donald Trump $10000 to $20000 to appear at a party or other event for 2 hours. In Trump’s case, it’s more like $250k per appearance, but it doesn’t really matter.

The news reporters don’t get the big picture because they aren’t looking at the economics. The bright shiny celebrities distract them from the business that is going on.

What Time Is It ??
photo credit: 708718

Let’s consider for a moment that you are having a small business seminar in Seattle, Dallas or Chicago. You plan to charge $3000 and you know for a fact that you are going to deliver far more value than that.

Your problem is this: demonstrating that you’re going to deliver $3000 worth of value.

Certainly you can do that, but look at what it might take to allow you to get Trump at your event – for free.

If his price is $250k, then you need to get an extra 83 people to show up at your event. In a city of 3-5 million people, are there 83 business owners, real estate people or entrepreneurs who would be interested in hearing Donald Trump speak, get a photo with him and have a brief word with him?

Sure there are. 83 people gets Trump at your business event for nothing out of your pocket.

People line up to pay $25k to have lunch with Warren Buffett every year. He donates that money to charity, but the concept is the same – and in fact, you could do this at your event with Trump (or whoever).

So when you read these celebrity stories (regardless of where they are – even in the WSJ), don’t gloss over them and think those people live in another world. Business-wise, they don’t. They are making hay while the sun shines. They know that you only need to get (for example) another 83 people there to pay their fee and they know what that does for you, your business and your event.

You simply have to do the math to make it easy to get someone like that for your promotional event.

What does this have to do with your small business? Lots.

Local businesses have promotional store events all the time. Anyone can do a live radio spot. Do the people in your market really want to talk to the DJ? Who in your market can you get at your store for a big event that will blow away your local market and position you as the only place to do business with?

For example, if you’re an attorney and you held a private event for your best clients, what would it cost you to get George Ross (Trump’s attorney) there? On the other hand, what positive can come of it? Be sure that you think that part through. Your guest needs to be strategic to your long term business goal, not just someone to ooh and ah over.

Think bigger and do the math to make amazing things happen when you hold a local promotional event.

PS: Don’t forget to record the event on digital video and put pieces of it (drip, drip, drip) out there on all the social media sites you use to promote and position your business (ie: Facebook, YouTube, and so on). Your event isn’t a one time thing. It should pay dividends for a long time.