How much investment will create 1 job

Legacy_user

So I can feel morally good I was wondering how much stock market/ bond investment is necessary to create 1 minimum wage job? On the belief that higher share prices enable companies to grow by issuing new stock, or that cheaper bonds would aid growth.

I wonder what asset class is the most efficient at this?
I suppose compounding helps create more jobs over time

AndyT678

Why do you think that the money you pay for a share or a bond goes to the company? Unless it's a brand new issue your money goes to the previous owner.

Even if it is a brand new debt issue for example the company might want the money to spend on new machines to eliminate jobs

System

Andy - when share prices rise the company can issue new shares to essentially get that money

It's a fair point that some companies are eliminating more than they create, however at least increasing the general supply of goods and services should help to suppress prices for everyone. The end point of capitalism and socialism is the same - full automation, and the poor need to become owners of the means of production (shares) or else become charity cases at the mercy of the rich and government

Malthusian

MatthewAinsworth wrote: »

The end point of capitalism and socialism is the same - full automation

You've been reading too much Marx, or one of his acolytes. Capitalism, unlike socialism, doesn't have an end point. To suggest it does is an anthropomorphic strawman. It's like imagining that the law of gravity cares about whether an object reaches the ground.

As to the headline question, no idea. You could find an insolvent business and acquire all the shares for £1, then use the company's remaining cash in the bank to create as many jobs as you wanted - just go out onto the street and give people a fiver to wear sandwich boards for half an hour, or dig holes and fill them in again. Job creation is not an end in itself.

System

Malthusian - I think automation weakens the link between work and money and, when humans nolonger work at all and supply side economics has made everything virtually free, capitalism will feel satisfied, people would have everything they desire

Malthusian

MatthewAinsworth wrote: »

Malthusian - I think automation weakens the link between work and money and, when humans nolonger work at all and supply side economics has made everything virtually free, capitalism will feel satisfied, people would have everything they desire

Capitalism will feel satisfied? There's that anthropomorphism of laws of nature again.

They said that when the hoover and the steam iron was invented, and on 1,000 other occasions in the history of human ingenuity.

When the iron and hoover were invented people thought that housewives would suddenly have hours of free time they wouldn't know what to do with, as they'd no longer have to spend hours cranking a mangle or sweeping a broom. What actually happened was that people spent roughly the same length of time doing housework as they did before, and it became socially unacceptable to have a dusty house or a rumpled shirt.

This idea that we are on the verge of a time when humanity is largely unemployed seems very popular at the moment. In the same way as in the 1950s everyone thought that we were on the verge of flying cars and videophones. In twenty years' time this vision of the future will seem as quaint as The Jetsons does now.

System

Malthusian - I think working days are shorter and some choose to do less housework, standards have raised as you say, but there may be less room for that to happen now and we have benefited from improved hygiene, apart from on the allergy front maybe - on the other hand we have HEPA vacuums now which might help previously unfortunate people. I think the housework of today is certainly less labour intensive, we don't have to scrub as hard. I don't think consumption either will necessarily rise like it did before, again because there are fewer problems to solve

coyrls

MatthewAinsworth wrote: »

Andy - when share prices rise the company can issue new shares to essentially get that money

That’s not how it works.

Probably the most direct way for you to support job creation is for you to pay your taxes to fund direct employment (e.g. NHS, Teachers, Civil Servants) or indirect employment through government funded projects (e.g. Crossrail) and procurement.

[FONT=&quot]With a collective investment, you could look at VCTs as having a much closer link to employment than a global small company tracker fund.[/FONT]

System

Coryls - you don't believe that companies can take advantage of rising share prices by issuing new stock? And that buying we are increasing bid prices?

coyrls

MatthewAinsworth wrote: »

Coryls - you don't believe that companies can take advantage of rising share prices by issuing new stock? And that buying we are increasing bid prices?

There are many scenarios in which a firm could require an equity capital infusion; funds may simply be needed to cover expenses. In a scenario where a firm does not have the capital to service current liabilities and the firm is hindered from issuing new debt due to covenants of existing debt, an equity offering of new shares may be necessary.
Growth opportunities are another indicator of a potential share dilution. Secondary offerings are commonly used to obtain investment capital that may be needed to fund large projects and new ventures.

(http://www.investopedia.com/articles/stocks/11/dangers-of-stock-dilution.asp).

There is no mechanical causal relationship between rising share prices and the issuing of new stock.

Thrugelmir

MatthewAinsworth wrote: »

So I can feel morally good I was wondering how much stock market/ bond investment is necessary to create 1 minimum wage job? On the belief that higher share prices enable companies to grow by issuing new stock, or that cheaper bonds would aid growth.

I wonder what asset class is the most efficient at this?
I suppose compounding helps create more jobs over time

Spend your pound in a local business that sells home produced product. Buying a share in Amazon will do nothing for the UK economy.