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So we have 1,000 jobs filled by 1,000 people and they all have paychecks. We add an extra 1,000 people so we have 2,000 people and 1,000 jobs. 1,000 of those p

So we have 1,000 jobs filled by 1,000 people and they all have paychecks. We add an extra 1,000 people so we have 2,000 people and 1,000 jobs. 1,000 of those people are unemployed and have no money. Somehow this benefits our economy because those 1,000 unemployed people without jobs are going to buy things. Sorry I don't understand "economics."

davidw 10y ago
> Sorry I don't understand "economics." I would suggest reading this: https://en.wikipedia.org/wiki/Zero-sum_game#Economics https://en.wikipedia.org/wiki/Zero-sum_game#Economics https://en.wikipedia.org/wiki/Lump_of_labour_fallacy https://en.wikipedia.org/wiki/Lump_of_labour_fallacy Paul Graham also has a good article: http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html There are number of good books on the subject. Tim Harford has some pretty approachable books that are aimed at a general audience. Perhaps others have further suggestions. As a consideration to others, strongly arguing something you have little understanding of lowers the signal to noise ratio of this site, and might be avoided.
polyfractal 10y ago
The number of jobs wouldn't remain static. The number of jobs would naturally increase to support the increased density of people. Also, some (hopefully large) fraction of the newly unemployed will find employment elsewhere. Few people get fired from their only job and they say "welp, guess I'm unemployed for life". Also, 1000 of those jobs are presumably lost because the new workers are willing to work at a lower rate. That leads to two situations: - The product/service they are creating will be cheaper (e.g. cheaper commodities out of China, cheaper fruit harvesting by migrant workers, etc). The average person spends less of their paycheck on these purchases, which means they obtain more value for less money. Or purchase more things using the same amount of money as before. - The owner of the business pockets more profit by employing cheaper labor but keeping prices the same. This segues into the idea of "trickle down" or "supply side" economy, where the owner employs more people, expands business, invests more capital etc because they are now spending less on salaries. Not saying I agree with this analysis, but it's at least one viewpoint :)
dasil003 10y ago
The 1000 new people also need to buy goods and services, this increases demand, which requires the producers of goods and services to scale up their production and hire more employees. Money is not a fixed thing, it's debt created by producing something that someone else values. Rather than a personal IOU we all agree to use money as a common means of exchange. Economic health is not the fixed amount of cash that everyone has, but by how many times it changes hands. Poor people who are living paycheck to paycheck are therefore the best contributors to the economy per dollar earned. Your scenario that 1000 people show up and the jobs remains fixed is nonsensical, the number of jobs is very much correlated to how many people there are. This is somewhat abstracted away by globalization, but it still has to work itself out in the end.
- jklinger410 10y ago
  >The 1000 new people also need to buy goods and services How do people without jobs, and therefore without money, pay for goods and services?
  - dasil003 10y ago
    You'd be surprised at the resourcefulness of a person faced with the threat of starvation.

davidw 10y ago

> Sorry I don't understand "economics." I would suggest reading this: https://en.wikipedia.org/wiki/Zero-sum_game#Economics https://en.wikipedia.org/wiki/Zero-sum_game#Economics https://en.wikipedia.org/wiki/Lump_of_labour_fallacy https://en.wikipedia.org/wiki/Lump_of_labour_fallacy Paul Graham also has a good article: http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html There are number of good books on the subject. Tim Harford has some pretty approachable books that are aimed at a general audience. Perhaps others have further suggestions. As a consideration to others, strongly arguing something you have little understanding of lowers the signal to noise ratio of this site, and might be avoided.

polyfractal 10y ago

The number of jobs wouldn't remain static. The number of jobs would naturally increase to support the increased density of people. Also, some (hopefully large) fraction of the newly unemployed will find employment elsewhere. Few people get fired from their only job and they say "welp, guess I'm unemployed for life". Also, 1000 of those jobs are presumably lost because the new workers are willing to work at a lower rate. That leads to two situations: - The product/service they are creating will be cheaper (e.g. cheaper commodities out of China, cheaper fruit harvesting by migrant workers, etc). The average person spends less of their paycheck on these purchases, which means they obtain more value for less money. Or purchase more things using the same amount of money as before. - The owner of the business pockets more profit by employing cheaper labor but keeping prices the same. This segues into the idea of "trickle down" or "supply side" economy, where the owner employs more people, expands business, invests more capital etc because they are now spending less on salaries. Not saying I agree with this analysis, but it's at least one viewpoint :)

dasil003 10y ago

The 1000 new people also need to buy goods and services, this increases demand, which requires the producers of goods and services to scale up their production and hire more employees. Money is not a fixed thing, it's debt created by producing something that someone else values. Rather than a personal IOU we all agree to use money as a common means of exchange. Economic health is not the fixed amount of cash that everyone has, but by how many times it changes hands. Poor people who are living paycheck to paycheck are therefore the best contributors to the economy per dollar earned. Your scenario that 1000 people show up and the jobs remains fixed is nonsensical, the number of jobs is very much correlated to how many people there are. This is somewhat abstracted away by globalization, but it still has to work itself out in the end.

jklinger410 10y ago
>The 1000 new people also need to buy goods and services How do people without jobs, and therefore without money, pay for goods and services?
- dasil003 10y ago
  You'd be surprised at the resourcefulness of a person faced with the threat of starvation.