The Waiter Analogy to Green Jobs

The Liberals claim they will create 50,000 green jobs with their Green Energy Act, as if the creation of jobs is the be-all and end-all of the economy. But where the money will come from to pay the salaries of those jobs is not even addressed, let alone explained. We can use a very familiar analogy why knowing where the money comes from is so important.

Take the case of a room full of patrons having dinner at a restaurant. The 100 people siting and eating are served by 10 waiters. The salaries of those waiters is being paid by the money the patrons are forking over for their meals. 10 patrons for each waiter. That means the total salary of each waiter is evenly paid by the 10 patrons. $2 from each is going towards the waiter's salary.

Now we have McGuinty wanting to create jobs. So he demands that the restaurant higher 5 more waiters, bringing the total to 15 on the floor. But the same 100 people now have to pay for those 5 more waiters. The restaurant owner has three choices.

1) Keep prices the same for patrons, and hence lose profits to pay for the extra 5 waiters. That's money not available to expand the restaurant, or pay loans.

2) Increase prices to pay for the new jobs. That means patrons pay more to cover those jobs, thus they lose purchasing power for other items, which is money not spent elsewhere, which is lost jobs elsewhere. The problem with raising prices is it puts the menu out of price range for some, so instead of 100 people coming at any given timeframe, maybe only 80 show up. That puts even more pressure on the restaurant with lost revenue, but to pay for the new waiters. A feed back spiral down can take hold, and evenually the place goes belly up.

3) Attempt to attract more patrons, by either expanding the restaurant, lowering prices, or other incentives. All of which costs the owner money, thinning profits even more.

All three show something in common. The imposition of more waiters in the name of "job creation", which are not wealth creating jobs, produces an imbalance in the natural equilibrium of the economy.

Hence, for McGuinty to create 50,000 green jobs we would first have to create 50 private industry jobs for every green job (assuming that each green job pays $50K and each private job pays $1000 a year for power all going to green wages). That's 50 x 50,000, or 2.5 MILLION new private jobs FIRST before those 50,000 green jobs can even start.

Clearly that is NOT happening. Hence those 50,000 green jobs will tip the economic balance as noted in one of the three effects above. The likely item changed being people, everyone, pays more, reducing their purchasing power, affecting other parts of the economy, hence the spiral down.

Just like we are seeing in Greece, Spain, Ireland, Portugal... We are following the Spanish model of renewable power all right, right down the same toilet.