How much investment will create 1 job

ColdIron

Or break some windows

Then someone will have to give an order to a glazier, that's an order he wouldn't have had before. He orders some glass, another new order. With his extra profit his son can buy more sweets, his wife can get a new scarf and he can order a few more pints down the Dog and Duck. That's a sweet seller, an accessories merchant and a publican better of than before. Scale this up to a national level and you will have full employment in no time

So, go out and break LOTS of windows

Apodemus

ColdIron wrote: »

Or break some windows

Then someone will have to give an order to a glazier, that's an order he wouldn't have had before. He orders some glass, another new order. With his extra profit his son can buy more sweets, his wife can get a new scarf and he can order a few more pints down the Dog and Duck. That's a sweet seller, an accessories merchant and a publican better of than before. Scale this up to a national level and you will have full employment in no time

So, go out and break LOTS of windows

I think you missed the other half of that story... where the baker whose windows you broke, doesn't buy the new shoes, so the cobbler's son doesn't buy his sweets...etc!

Besides, doesn't most of our glass come from France these days?

System

Yeah create problems for the economy to satisfy! Lol
I was thinking storms do that...

Corlys - it's probably a drop in the ocean but I suppose maintaining a company avoids it shrinking and losing jobs, if the company actually created jobs. It's up to the company when it wants to reap rewards of rising share prices

coyrls

MatthewAinsworth wrote: »

Corlys - it's probably a drop in the ocean but I suppose maintaining a company avoids it shrinking and losing jobs, if the company actually created jobs. It's up to the company when it wants to reap rewards of rising share prices

No, you've still got it wrong, owning shares in a company does not stop the company shrinking and losing jobs and companies do not issue shares to "reap rewards of rising share prices".

bigadaj

Apodemus wrote: »

I think you missed the other half of that story... where the baker whose windows you broke, doesn't buy the new shoes, so the cobbler's son doesn't buy his sweets...etc!

Besides, doesn't most of our glass come from France these days?

Saint gobain are a huge manufacturer and supplier of glass, though they still make most if it in the uk.

System

Coryls - buy owning the share you are reducing supply, so price will be higher than it otherwise would, issuing shares is one method of raising funds, without taking on debt, so it supports the business

bowlhead99

MatthewAinsworth wrote: »

Coryls - buy owning the share you are reducing supply, so price will be higher than it otherwise would, issuing shares is one method of raising funds, without taking on debt, so it supports the business

Issuing capital to investors in a fund raising is not cost free for a business and its existing investors, even ignoring the direct operational and legal costs of doing it.

In fact rewarding a bank for lending you £10000 by paying them 5% a year on a loan is pretty cheap, the £500 a year is a running cost and saves you £100 on your corporation tax due to having lower taxable profits - so it only costs the company (and therefore the owners of the company) £400 really.

Whereas issuing £10000 of capital to a new investor can be expensive because that new investor might demand 5% in dividends (which costs £500 with no tax shield) and the new investor also gets a slice of all future profits no matter how high they are and he gets a share of the company's assets on a winding up no matter how valuable they are.

So, many companies do not want to issue new shares to new investors to support their business, if they are doing fine already and not seeking new money in the capital markets. As such, you buying a second-hand share in their company today, temporarily pushing the price up now but forgotten about later, does not inherently "support" them in financial terms, or allow them to take on new employees.

System

Bowl - good point, I think there must come a point when a company bond would be a higher rate, I see adverts for 8% bonds sometimes, I suppose depending on credit quality or ability to borrow. For companies to decide to float at all they must believe that they'd pay less in dividend or not be able to borrow enough. With dividends they aren't obliged.

tacpot12

£33000 of revenue = one minimum wage job. So the investment required to create the job will be whatever it takes to create £33,000 of revenue. This can vary wildly based on the industry and the age of the organisation, but for an organisation that you can invest in easily, I'd expect the investment needed would be about 20% of the salary, so say £2500. Bear in mind that a job paying minimum wage probably isn't creating a lot of value (the value created will about 2 x the salary at the level of the minimum wage).

Malthusian

MatthewAinsworth wrote: »

Bowl - good point, I think there must come a point when a company bond would be a higher rate, I see adverts for 8% bonds sometimes, I suppose depending on credit quality or ability to borrow.

Those 8% interest rates have nothing to do with credit quality or ability to borrow. 8% is the rate at which you attract the maximum number of naive/greedy people willing to chuck their money at capital-at-risk products without considering the risk or reading the small print. Lower than 8% and they don't have sufficient incentive to leave the regulated arena. Higher than 8% and they start reading the small print.

There is a reason that unregulated self storage investments, unregulated car parking investments and unregulated Google-squatting property speculators all offer a "guaranteed" 8% and it isn't because they're of equal credit quality.