# Why do people insist that the market will produce new jobs? **URL:** \ **Category:** Great Debates\ **Created:** [December 15, 2008, 6:17am UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216 "2008-12-15T06:17:29Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [December 15, 2008, 4:17pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/21 "2008-12-15T16:17:30Z")
> [@brazil84](#): > > For reasons expressed elsewhere, I will not engage with this poster. You don’t have to “engage the poster”. You only need to answer the question. Your post makes no sense. You say old people, sick people, children, do not have to work and you say that like it is a bad thing. We have come all the way to a society that is productive enough where old people, sick people, children etc do not need to work. It has taken a lot of work and effort to get to this state which I think everybody finds is a good thing and you say it like it is a bad thing. And yes, if we could reture comfortably after only ten years of productive work that would be a good thing. Why not? How on earth would it be bad? (BTW, I do not remember where you said you would not engage me. Care to remind me?) ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [December 15, 2008, 4:18pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/22 "2008-12-15T16:18:15Z")
When I don’t have a dishwasher, I wash my own dishes. When I have a dishwasher, I do something else instead of wash dishes; I don’t just sit there and stare at the dishwasher, lamenting the work I’m not doing. When I had a typewriter, I spent a lot of time formatting documents and correcting mistakes or starting a page over. When I got a word processor and a printer, much of that time was saved. Did I spend it twiddling my thumbs? (Perhaps I spent it making better documents.) As mentioned, resources are scarce, and this includes time. When time is saved in some process, it is used for something else. It isn’t like we’re running out of things to do. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [December 15, 2008, 4:23pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/23 "2008-12-15T16:23:48Z")
> [@Vox\_Imperatoris](#): > > Or maybe the robots will be so productive, everything will be essentially free, Star Trek style. Remember, without scarcity, economic theories break down. > > Valete, > Vox Imperatoris Of course, [that’s not the only scenario SF writers have envisioned for a post-scarcity society.](http://boards.straightdope.com/sdmb/showthread.php?t=466663) ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [December 15, 2008, 4:28pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/24 "2008-12-15T16:28:52Z")
> [@Grumman](#): > > He said nothing of the sort. His implied belief that high unemployment is bad does not automatically mean that he sees the opposite extreme as good. No, this is what he said: > [@brazil84](#): > > I don’t insist it. It seems to me that the percentage of the American population which performs essentially no productive work has grown over time and continues to grow. > > This includes people who are retired (and idle); people who are in school; people who are trust fund babies; people who are institutionalized/incarcerated, etc. (I would count homemaking as productive work.) > > If this trend continues, we could easily wind up in a situation where a large majority of the population is unemployed. How is it bad that people like the old, the children, the sick, the mentally ill, who centuries ago would have been forced to work to survive can now live without being forced to work? Our society has become more productive and people can work fewer number of years of their lives. How is this bad? I cannot think of anything better. I wish we could work five years of our lives and dedicate the rest to enjoying life, raising our children, being with our friends and family, etc. I cannot think of anything more desirable. In fact, I think a very good indicator of a wealthy society is that people can afford NOT to work if they wish. So what if we have more “trust fund babies”? Isn’t that a good thing? Or is it better to have a society where such a thing cannot exist? ---
**Author:** ![Indistinguishable](https://avatars.discourse-cdn.com/v4/letter/i/90ced4/32.png) [@Indistinguishable](https://boards.straightdope.com/u/Indistinguishable)\ **Post date:** [December 15, 2008, 4:48pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/25 "2008-12-15T16:48:12Z")
I would note that nowhere in this thread has **brazil84** actually said the situation he is describing is one he considers bad. ---
**Author:** ![brickbacon](https://avatars.discourse-cdn.com/v4/letter/b/898d66/32.png) [@brickbacon](https://boards.straightdope.com/u/brickbacon)\ **Post date:** [December 15, 2008, 5:02pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/26 "2008-12-15T17:02:45Z")
> [@gaffa](#): > > Given this evidence, why do people insist that the market will produce new jobs to replace all the old ones? Because, in general, it will. I think the related issue that we need to worry about it that globalization has made the world a lot smaller, thus enabling far more people compete with us. They have the built-in advantages of lower wages, less regulation, a lower starting point, and the ability to learn form our missteps. Based on the above, and our trade deficit, it seems like we are exporting more (better) jobs than we are creating through their dissolution. It also becomes harder in this economic climate to convince foreigners that our services are worth the premium. However, I think the general point your making is demonstrably false (thus far). ---
**Author:** ![brazil84](https://avatars.discourse-cdn.com/v4/letter/b/8491ac/32.png) [@brazil84](https://boards.straightdope.com/u/brazil84)\ **Post date:** [December 15, 2008, 5:07pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/27 "2008-12-15T17:07:00Z")
> [@Indistinguishable](#): > > I would note that nowhere in this thread has **brazil84** actually said the situation he is describing is one he considers bad. That’s correct, and I think that if approached with the right attitude, life might be quite nice with 90% unemployment. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 15, 2008, 5:16pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/28 "2008-12-15T17:16:36Z")
> [@brazil84](#): > > I don’t insist it. It seems to me that the percentage of the American population which performs essentially no productive work has grown over time and continues to grow. > > This includes people who are retired (and idle); people who are in school; people who are trust fund babies; people who are institutionalized/incarcerated, etc. (I would count homemaking as productive work.) > > If this trend continues, we could easily wind up in a situation where a large majority of the population is unemployed. The problem you are attempting to allude to is a “greying” of the population where labor shortages are caused by excessive numbers of people retireing at once. This is more due to demographic anomalies than any sort of modernization. It is actually a concern in Europe where population growth has flattened and might become a concern here when all the Boomers start to retire. I don’t, however, see why you consider “homemaker” productive work but “student” not. A student may not produce anything directly or immediately, but they are preparing themselves to do so in the near future. ---
**Author:** ![gaffa](https://avatars.discourse-cdn.com/v4/letter/g/e68b1a/32.png) [@gaffa](https://boards.straightdope.com/u/gaffa)\ **Post date:** [December 15, 2008, 5:21pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/29 "2008-12-15T17:21:54Z")
> [@Vox\_Imperatoris](#): > > Because that’s what the market does. It has been proven to increase total wealth over time, and an increase in wealth causes an increase in spending. People spend to get other people to do stuff for them. Historically, yes. But why do you insist that this is going to remain so? Previously, if you wanted a phone answered in the US, it was only economical to employ someone in the US to answer it. But the Net and cheap long distance has made it possible to hire people in lower-income areas to answer that phone. What you haven’t addressed is the question of what happens if fundamental aspects of the economy change? > [@](#): > > Why do you assume that jobs must be directly involved with production of goods? If robots end up controlling all factory and menial service jobs, then everyone will either control robots for a living or be involved with the arts or sciences. That sounds pretty good to me. Ummm…how many people do you think are needed to “control robots”? In 1900, [41% of the population of the US was involved in agriculture. In 2000? 1.9%.](http://www.ers.usda.gov/publications/eib3/eib3.htm) That’s an example of an industry that has very successfully automated. Fewer farmers are farming more acres and producing more food. The latest trend is fully automated, [GPS-controlled tractors.](http://www.gpsfarm.com/) Again, this has been a net benefit for consumers, and has kept food prices down. But consumers have to have an income in order to be able to consume. At this rate, the number of farmers will shrink to be the same as the number of executives. As for being involved in “the arts of sciences”, exactly how many people will that employ? ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [December 15, 2008, 5:27pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/30 "2008-12-15T17:27:05Z")
> [@brazil84](#): > > It doesn’t seem all that ridiculous to me. > > Is the US prison population higher now than it was 50 or 100 years ago? > > Is the percentage of the population which is in college higher now than it was 50 or 100 years ago? > > Is the percentage of the population which is elderly and retired higher now than it was 50 or 100 years ago? > > I claim that (1) the US prison population is higher now; (2) the US college population is higher now; and (3) the US elderly/retired population is higher now. > > I will try to find cites for these issues if you like, but first . . . . are you seriously skeptical of my claim? > > (I also am pretty confident that there are more institutionalized people and trust fund babies now than in the past, but I’m not sure I will be able to find cites.) Unless you can show that the definition of the employment rate has changed, all of that is meaningless. ---
**Author:** ![gaffa](https://avatars.discourse-cdn.com/v4/letter/g/e68b1a/32.png) [@gaffa](https://boards.straightdope.com/u/gaffa)\ **Post date:** [December 15, 2008, 5:30pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/31 "2008-12-15T17:30:05Z")
> [@Ruminator](#): > > \ > > I thought I anticipated your reaction to those stats by asking you to “set aside the various data collection flaws of the BLS.” My OP, my thread. You’re welcome to handwave unemployment figures in your own thread. Employment, in this thread means “a full-time job that provides an individual with means to sustain at least one life, preferably an entire family”. > [@](#): > > What I’m trying to get you to think about and answer is why we are not at 40+% or even 99% unemployment. Since automation has been happening since the dawn of civilization, would that logic dictate that virtually everyone should be unemployed except for the folks that scrub the toilets? Because, up until now, new industries have also created new jobs. But, as my examples hopefully show, most new industries that have been created in ways that either create as few new jobs as possible, or create them elsewhere. Please feel free to post examples of new American industries that create significant numbers of new jobs. > [@](#): > > Ok, so the govt lies about statistics. Even accounting for that, why are we not at 99% unemployment? That sounds like a lovely topic for a completely different thread. In this one, it looks to be made of straw. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [December 15, 2008, 5:39pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/32 "2008-12-15T17:39:43Z")
> [@Indistinguishable](#): > > I would note that nowhere in this thread has **brazil84** actually said the situation he is describing is one he considers bad. It seems like he wanted to say things were getting worse over time. If he meant to say things have been getting better over time then we agree. So, if things have gotten better over time, what’s the problem again? ---
**Author:** ![Ruminator](https://avatars.discourse-cdn.com/v4/letter/r/b9bd4f/32.png) [@Ruminator](https://boards.straightdope.com/u/Ruminator)\ **Post date:** [December 15, 2008, 5:47pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/33 "2008-12-15T17:47:52Z")
> [@gaffa](#): > > > [@Ruminator](#): > > > > Ok, so the govt lies about statistics. Even accounting for that, why are we not at 99% unemployment? > > That sounds like a lovely topic for a completely different thread. In this one, it looks to be made of straw. I was trying to gauge your fundamental understanding of society’s incentive/equilibrium for employment. If you didn’t understand basic economic “creative destruction” then there would have been no point in quibbling over unemployment statistics. > [@gaffa](#): > > Please feel free to post examples of new American industries that create significant numbers of new jobs. So in your mind, “industry” is the only source for new jobs? Can’t think of any others? It seems like you have a constrained view of how economies (and societies) can evolve and adapt. ---
**Author:** ![Dangerosa](https://avatars.discourse-cdn.com/v4/letter/d/22d042/32.png) [@Dangerosa](https://boards.straightdope.com/u/Dangerosa)\ **Post date:** [December 15, 2008, 5:48pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/34 "2008-12-15T17:48:24Z")
> [@msmith537](#): > > Your rule of thumb is not entirely correct. It is not always economically advantageous to automate or outsource all jobs. It largely depends on whether capital or labor are less expensive in your country. Labor is very expensive in the US compared to other countries. But we also have a lot of capital and it’s relatively inexpensive for us to automate. Think of it as whether it is more efficient to hire one bulldozer or a hundred workers with shovels. We also have a business friendly infrastructure - with the exception of our tax structure. Businesses in the U.S. do not worry that one day the people will decide to socialize the business and take it over. Generally speaking, we don’t confiscate property. We aren’t prone to revolutions or sudden and severe changes in public policy. Our corporations can run with what is fairly minimal security compared to other parts of the world. We have a workable infrastructure - you can drive trucks on our roads and get from major city to major city easily. We aren’t prone to power shutoffs. Generally, these sorts of things tend to go hand in hand with higher labor costs and higher taxes. In some countries - like China and India - there is excellent infrastructure in place in certain locations - but outside those locations it becomes hard to rely on power or roads. The business world is a different place once you run your first “should we open a factory in Northern Ireland or France - Malaysia or China - Alabama or Tennessee” analysis. ---
**Author:** ![Lemur866](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lemur866/32/434_2.png) [@Lemur866](https://boards.straightdope.com/u/Lemur866)\ **Post date:** [December 15, 2008, 6:01pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/35 "2008-12-15T18:01:04Z")
> [@gaffa](#): > > Ummm…how many people do you think are needed to “control robots”? In 1900, [41% of the population of the US was involved in agriculture. In 2000? 1.9%.](http://www.ers.usda.gov/publications/eib3/eib3.htm) Why don’t we have 39% unemployment now that all those agricultural workers have been thrown off the farm? What happened to all those millions and millions of farmers that lost their jobs? ---
**Author:** ![gaffa](https://avatars.discourse-cdn.com/v4/letter/g/e68b1a/32.png) [@gaffa](https://boards.straightdope.com/u/gaffa)\ **Post date:** [December 15, 2008, 6:03pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/36 "2008-12-15T18:03:37Z")
> [@Superfluous\_Parentheses](#): > > I think a couple of reasons are fairly obvious. > > As long as we will be exchange goods or money for necessary goods and services, people will go out of their way to produce goods or money. This doesn’t mean they’ll all get jobs in factories or offices - quite a few of them will start a business of some kind, creating jobs for themselves and possibly others. Unless the economy is broken in a fundamental way by civil war, a real depression, famine, things like that, this by itself will already mean the % of unemployment will remain fairly low. This is assertion. What is it’s basis? Plenty of people create small businesses, and always have. But what small businesses are going to be created that will create enough jobs to offset the losses to automation? I’d like to see examples. > [@](#): > > If technological advances (or lower wages somewhere else) make certain activities “too cheap” to do by hand, that just means that that particular job isn’t available anymore in that particular place. You’ll still need people to manage the technology, manage the overseas workers etc. And besides, look at the number of jobs the Chinese have created in the last couple of decades. Again, the number of people necessary to “manage the technology, manage the overseas workers” is dramatically _smaller_ than the number of people necessary to actually do those jobs. This is like other poster’s insistence that thousands of factory jobs that have been automated out of existence are someone “replaced” by one manager and a small team of repair people. The math simply doesn’t add up. > [@](#): > > If whatever you’re now manufacturing cheaper is “essential” - like cars, energy, food - this now means that the price of essential goods and services will go down: cheaper food, cars & energy for everybody, which is good for all kinds of reasons, but it will also stimulate the growth of (new and old) businesses, probably increasing the number of available jobs. Please name and describe these new jobs. As I said, new industries, like GPS makers, do not create significant numbers of new jobs in the US. They create management and marketing jobs here, but not engineering or manufacturing ones. And the end result is a net loss of jobs. Again, feel free to post genuine counter-examples, with cites, rather than regurgitating Econ 101 homilies. > [@](#): > > Most of these large “transitions” do not happen painlessly. Yes it sucks that record stores are going extinct - for the record stores, and probably for the record companies too. But 120 years or so ago there weren’t any record stores or record companies. In 20 years time probably nobody will be buying CDs anymore. It’s much more efficient to just download the music (legally or not). One way or another this will probably kill off (or significantly shrink) most of the larger record companies too - but on the other hand, it has **never** been cheaper to release your own albums or start your own record company. I agree that it is cheaper to record and release music (I used to work in a recording studio and doing PA). But the entire record industry destroyed far more jobs in music than it created. Before recorded music, every event that required music required musicians - orchestras, string quartets, pianists, jug bands, etc. Since then, recorded music has replaced musicians for virtually every occasion. In 1900 there were [139,310 American employed as musicians. In 2001, 161,000.](http://answers.google.com/answers/threadview?id=127434) But in 1900, there were only 76 million people in the US, while in 2001 the population had more than tripled. Admittedly, US record stores have been staffed almost exclusively with her failed musicians, providing a cushion of sorts, but iTunes does not provide employment anywhere near the number of people employed by bankrupt and closed record stores. In every stage of this evolution, fewer people have been employed. The history of recorded music has, in the latter half of the 20th century, consisted of a shrinking number of corporations on selling the work of fewer (and, IMO worse) musicians to more and more people. Janis Ian pointed out that when she had her first hit, [there were 22 record companies in New York City alone](http://www.janisian.com/articles-perfsong/Majors-minors.pdf). Now, there are [4 huge labels](http://en.wikipedia.org/wiki/Record_label#Major_labels_today_.28Big_Four.29) providing 70% of of the entire world market of music. Please, feel free to offer counter-examples, with citations. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [December 15, 2008, 6:07pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/37 "2008-12-15T18:07:13Z")
> [@Sage\_Rat](#): > > Unless you can show that the definition of the employment rate has changed, all of that is meaningless. I would even qualify that further. What is important is the percentage number of _unemployed_ people, the people who want jobs but cannot find them. On the whole it is much better that we spend less time working than we did 100 years ago. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [December 15, 2008, 6:17pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/38 "2008-12-15T18:17:19Z")
> [@gaffa](#): > > This is assertion. What is it’s basis? > > Plenty of people create small businesses, and always have. But what small businesses are going to be created that will create enough jobs to offset the losses to automation? I’d like to see examples. > Again, the number of people necessary to “manage the technology, manage the overseas workers” is dramatically _smaller_ than the number of people necessary to actually do those jobs. This is like other poster’s insistence that thousands of factory jobs that have been automated out of existence are someone “replaced” by one manager and a small team of repair people. The math simply doesn’t add up. > Please name and describe these new jobs. As I said, new industries, like GPS makers, do not create significant numbers of new jobs in the US. They create management and marketing jobs here, but not engineering or manufacturing ones. And the end result is a net loss of jobs. Again, feel free to post genuine counter-examples, with cites, rather than regurgitating Econ 101 homilies. > … > Please, feel free to offer counter-examples, with citations. You are ignoring all the examples which have been cited. Where did all the agricultural workers go? Where did all the teamsters go? Where did all the accountants and clerks who were displaced by computers go? Are they all unemployed? Or did society create new needs and more activities for those people. Anything which increases productivity is good in the long run even if some individuals are inconvenienced in the short run. And productivity can be increased in many ways. Automation is one but buying from suppliers who are more efficient is another. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 15, 2008, 6:21pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/39 "2008-12-15T18:21:46Z")
> [@Dangerosa](#): > > The business world is a different place once you run your first “should we open a factory in Northern Ireland or France - Malaysia or China - Alabama or Tennessee” analysis. This is true. Lay-people underestimate the complexities of doing business in a foreign country. It’s not as easy as flipping a switch from “Wisconsin” to “Bangalore”. > [@gaffa](#): > > Because, up until now, new industries have also created new jobs. But, as my examples hopefully show, most new industries that have been created in ways that either create as few new jobs as possible, or create them elsewhere. > > Please feel free to post examples of new American industries that create significant numbers of new jobs. So…new industries aren’t creating new jobs anymore? If I invent a machine that automatically builds office parks, that doesn’t create jobs in my Office-Park-A-Tron 3000 factory? Have you also considered that because my Office-Park-A-Tron 3000 can crank out office parks much more cheaply and quickly, it creates additional opportunities for business that would not have been profitable before? I mean your own examples disprove your point. 41% of the population was involved in agriculture in 1900. Now it’s 2%. They just didn’t grind up the difference into Soylant Green. ---
**Author:** ![CalD](https://avatars.discourse-cdn.com/v4/letter/c/7feea3/32.png) [@CalD](https://boards.straightdope.com/u/CalD)\ **Post date:** [December 15, 2008, 6:24pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/40 "2008-12-15T18:24:29Z")
**Why will the market produce new jobs?** If automation saves an employer from employing 3 people at $50,000 each per year, that employer now has an extra $150,000 per year to spend. As long as he spends it, and doesn’t set fire to it, he will be pumping $150,000 a year back in to the economy, which will produce a net benefit of +3 $50,000-per-year jobs in other companies. … or… The employer will employ 3 people at $50,000 per year to perform some other, new task. This is why “consumer confidence” is so important. The more willing people are to spend their money, the better shape the economy is in. [Previous page](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216.md?page=1) [Next page](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216.md?page=3)