A fallacy: a more efficient way of doing a thing destroys jobs, and its necessary corollary that a less efficient way of doing it creates jobs. There is just a fixed amount of work to be done in the world. If we cannot add to this work by thinking up more cumbersome ways of doing it, at least we can think of devices for spreading it around among as large a number of people as possible.
Analysis of arbitrary subdivision of labor
The householder who is forced to employ two men to do the work of one has, it is true, given employment to one extra man. But he has just that much less money left over to spend on something that would employ somebody else. By doing that, the labor market is not better off but the householder is worse off because he has to spend extra money on one stuff but has to sacrifice something else he treasures.
Analysis of the proposal of shortening the working week by law
(1)A reduction in the standard working week from 40 to 30 without any change within the hourly rate of pay.
There will be no increase in production because there is no net increase in man-hours. The workers previously employed is subsidizing the workers previously unemployed.
(2)A reduction in the working week from 40 to 30 hours, hut with a sufficient increase in hourly wage rates to maintain the same weekly pay for the individual workers already employed.
The consequence is to raise the cost of production. The least efficient firms will be thrown out of the market, least efficient workers will lose the job; the rise of cost and decrease of supply makes the price rise
No comments:
Post a Comment