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The technical term for this idea is the “lump of labor fallacy”. Contrary to the idea that there is only a fixed amount of work to do, increasing an economy’s
by rz2k 3y ago
The technical term for this idea is the “lump of labor fallacy”.
Contrary to the idea that there is only a fixed amount of work to do, increasing an economy’s population tends to increase its aggregate output at an even greater rate than the headcount, ie average wages increase. One of the reasons is that it increases the ability for greater specialization. If some other economy paid for the unproductive years of childhood, the benefit is even greater.
- deleted 3y ago[deleted]
- ChuckNorris89 3y ago>increasing an economy’s population tends to increase its aggregate output at an even greater rate than the headcount, ie average wages increase. That's true only if you cherry-pick certain countries with already booming economies, like the US, where adding more workers adds more fuel to the fire, especially in the low interest environment of the past 10 years. But most other countries with much slower economies, won't benefit from even more workers the way you described ( average wages increase) but more like average wage decreases. Adding more workers won't benefit a stagnating economy.