# 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:** 3
**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, 6:27pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/41 "2008-12-15T18:27:59Z")
> [@Ruminator](#): > > 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. It sounds like you’re interested in whether or not I accepted the orthodox view of economics. I’m asking questions about how things work in the real world, not in the Econ 101 world of widgets. Again, please feel free to provide real-world examples rather than spouting textbook examples. > [@](#): > > So in your mind, “industry” is the only source for new jobs? Can’t think of any others? Strawman. > [@](#): > > It seems like you have a constrained view of how economies (and societies) can evolve and adapt. Cocking a snoot won’t help. This thread is about life in the real world, specifically the US. Industry is a significant source of good-paying jobs. When those jobs are shipped overseas what source of equally highly paid jobs has arisen to replace them? Again, please provide cites. ---
**Author:** ![runcible\_spoon](https://avatars.discourse-cdn.com/v4/letter/r/9fc29f/32.png) [@runcible\_spoon](https://boards.straightdope.com/u/runcible_spoon)\ **Post date:** [December 15, 2008, 6:37pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/42 "2008-12-15T18:37:55Z")
> [@gaffa](#): > > AKA “Trickle-down Economics”. I didn’t believe there was anyone still around who believed in that. Hmmm. As I said, not an economist, so maybe someone who knows more than I can address this better, but I’ll take a whack first. I’m generally not for trickle-down economics, but it seems to me that there’s a difference between it being good for the people on the bottom and creating (some) new jobs. I’m not arguing that as soon as jobs are automated away, the market will instantly create new jobs - rather, I suspect that over time, it will. During that time, the people who lost jobs may be unemployed, and I’m not saying it’s necessarily an improvement for them. But I think (and, so far, history seems to agree) that eventually, everyone doesn’t end up unemployed. As for your request for specific, US-located jobs that are new? How about programming? Yeah, some of that’s getting outsourced too, but there’s still a huge number of people here in the Bay Area who have jobs in tech. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [December 15, 2008, 6:41pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/43 "2008-12-15T18:41:16Z")
> [@Lemur866](#): > > 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? I’d like to see that question answered as well. **gaffa** himself has provided a statistic that directly contradicts his own thesis. **gaffa** , let me ask you something: Just what do you think causes economic growth? Why do we have so much more stuff today than we did 100 years ago? How come our lives are better, our products better and more numerous, and our standards of living so much higher? Oh hell, I’ll give you the answer: It’s because we have become more efficient at making things. Automation is a big part of it. But so is the evolution of corporations, the modern banking system, free trade, better education, and increasing health and longevity of workers. In short, it takes fewer people to make something of value today than it did 100 years ago, or even ten years ago. We’re constantly getting better at making things with less effort. And yet, viewed as a long-term trend, unemployment is not going up. In a healthy economy, unemployment tends to hover between 5% and 10% - this represents the static snapshot of people who are not working because they are in transition between jobs. In a healthy capitalist society, jobs are constantly being destroyed and created. So you will always have some percentage of the population unemployed. This is a good thing, or new businesses would not be able to find labor. Right now, unemployment is going up. But it’s not because of automation or outsourcing - it’s because of a general decline in economic output. When the present crisis passes, new jobs will be created because demand for new things will increase, and because the larger available labor pool means it’s easier to start new enterprises. You also seem to think that when one country pays its workers more than another country, that necessarily means that jobs will flow from the highly-paid country to the lower-paid country. But this is not the case at all. How come? Because in a free market, people are paid what they are worth. If workers in America are paid more than workers in Vietnam, that’s because workers in North America are worth more. They are more productive. They create more value per hour of labor than the Vietnamese workers do. Now, this is not true in all industries, and certainly the rise of, say, garment manufacturing in Vietnam may cause a decline of jobs in garment manufacturing in the U.S. In industries where goods are easy to ship, require little training to make, and yet have a high percentage of labor costs, cheap labor in faraway countries may have a competitive advantage. But even then, all is not equal. Factories in 3rd world countries have to operate in harsher conditions. They may not have good power sources, or good roads to move materials around. There are higher shipping costs. Political instability is an added risk which the company must account for. All this makes Vietnamese workers worth less than American workers, even if they are doing identical jobs. This is why some jobs will simply not be exported, even if there is cheaper labor elsewhere. But in any event, if a 3rd world country has a comparative advantage in cheap labor, that just means Americans get to buy those goods for less money. This frees up extra capital that would have gone into those goods, which can then be used to buy other goods. For example, food costs have plummeted over the years. Poor people, who used to spend a very large fraction of their income on food, now have money with which to buy iPods and laptop computers. So now we have eliminated low-paying, back-breaking farm labor with automation and outsourcing, and used all that money to create jobs making computers and writing software. Higher pay, more productivity, better working conditions, and more stuff for poor people. I’m not sure how you can possibly spin this as a bad thing. ---
**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, 6:41pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/44 "2008-12-15T18:41:36Z")
> [@gaffa](#): > > Please feel free to post examples of new American industries that create significant numbers of new jobs. I assume you’ve heard of an invention known as the computer, right? ---
**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, 6:57pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/45 "2008-12-15T18:57:50Z")
> [@sailor](#): > > You are ignoring all the examples which have been cited. Actually, I’m ignoring all the claims that have been made without citations. What ones did I miss? > [@](#): > > 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. It has in the past, but I’m talking about recent history and the future. As factory farms have replaced the family farm, small towns have declined and disappeared and people have re-located to cities for work in factories. Which are declining and moving to cheaper labor countries or being replaced with automation. What I’m asking is this - what will replace those lost factory jobs? The Teamsters is a good example. [Their logo is has a pair of horses on it](http://www.teamster.org/) because they originally drove teams of horses which had far less carrying capacity than a Mac truck, so fewer people carried more goods. Up until now, we’ve been able to grow past this. But when Teamsters employer UPS deploys fleets of autonomous trucks it’s going to eliminate thousands of good paying jobs.The switch from teams of horses to trucks didn’t eliminate the need for someone to steer. Automation does. > [@](#): > > 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. These sound far more like religious affirmations rather than thought-out rational positions. Please, what are these new jobs? Be specific. I can point out exactly where jobs are lost, can you do me the courtesy of showing exactly where the new replacement jobs are being created? ---
**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, 7:07pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/46 "2008-12-15T19:07:59Z")
> [@Lemur866](#): > > I assume you’ve heard of an invention known as the computer, right? Does snark make you feel good? Is it a replacement for rational thought? The computer and the Net are wonderful tools and I use them every single day. But, as has already been pointed out, they have allowed many white collar jobs to be exported to other countries. For instance, when you have an x-ray, CAT scan or MRI, your local hospital very probably sends the digital scans to a diagnostician in India who e-mails back the result. I’m not claiming that these doctors don’t do an excellent job. But when film had to be mailed and results had to be mailed back, it was not feasible or medically sensible to do so. Now, as the Net has made it possible, it has also made it inevitable. An MD in Bangalore or Mumbai is going to charge a fraction of one in Chicago or New York. ---
**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, 7:18pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/47 "2008-12-15T19:18:10Z")
You seriously can’t think of any idustries that are currently expanding? Do you need a list? Automation and outsourcing aren’t exactly brand new, they’ve been happening since the dawn of the industrial age. So why hasn’t unemployment steadily increased since James Watt first invented the steam engine? We have a lot more automation today than we did 30 years ago during the 70s so why was unemployment higher in the 70s than it is today? ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [December 15, 2008, 7:19pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/48 "2008-12-15T19:19:19Z")
> [@gaffa](#): > > Because there is no political benefit to admitting that unemployment has gone up. So the unemployment numbers only apply to people currently looking for work, and excluding those who have given up. Politics doesn’t explain your position. If jobs weren’t replaced by the market, unemployment would not be 10%, or 12%, or even 20%; it’d be 90%. Essentially everyone would be unemployed; almost all the jobs that existed a hundred years ago are gone now. We are not that far removed from when more than half the population was involved in farming, and the vast majority of those jobs are gone. Entire swaths of other job types have also been eliminated; how many switchboard operators and typing pools are there now? Most people today don’t even know what “Typing pools” were. Even your most generous estimates of unemployment can’t explain away where all the jobs have come from. > [@](#): > > The computer and the Net are wonderful tools and I use them every single day. But, as has already been pointed out, they have allowed many white collar jobs to be exported to other countries. For instance, when you have an x-ray, CAT scan or MRI, your local hospital very probably sends the digital scans to a diagnostician in India who e-mails back the result. I’m not claiming that these doctors don’t do an excellent job. But when film had to be mailed and results had to be mailed back, it was not feasible or medically sensible to do so. Now, as the Net has made it possible, it has also made it inevitable. An MD in Bangalore or Mumbai is going to charge a fraction of one in Chicago or New York. This sounds terrific to me. Where’s the problem? We get cheaper MRIs, which makes it easier for us to stay healthy and lets us save money to spend on other things. India gets more money, making them a richer society and the richer they get, the more they’ll buy from us. Sounds like a win-win. I don’t see why it’s bad for Indians to improve their lot in life. ---
**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, 7:21pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/49 "2008-12-15T19:21:15Z")
> [@runcible\_spoon](#): > > Hmmm. As I said, not an economist, so maybe someone who knows more than I can address this better, but I’ll take a whack first. I’m generally not for trickle-down economics, but it seems to me that there’s a difference between it being good for the people on the bottom and creating (some) new jobs. I’m not arguing that as soon as jobs are automated away, the market will instantly create new jobs - rather, I suspect that over time, it will. During that time, the people who lost jobs may be unemployed, and I’m not saying it’s necessarily an improvement for them. But I think (and, so far, history seems to agree) that eventually, everyone doesn’t end up unemployed. Please feel free to provide examples of these new, job-producing industries. > [@](#): > > As for your request for specific, US-located jobs that are new? How about programming? Yeah, some of that’s getting outsourced too, but there’s still a huge number of people here in the Bay Area who have jobs in tech. The most recent statistics I’ve been able to find is [386,200](http://www.aeanet.org/PressRoom/prjj_cc2008_bay_area.asp) high tech jobs in the Bay Area in 2006. I’d imagine the number is lower now with the worsening economy. Agreed, those are generally well paid, excellent jobs. But those represent jobs for roughly .12% of the 305,888,047 person population. Those jobs require a high level of intelligence and education. And, as in my OP, the 9 people employed by GOOG-411 replaced the tens of thousands of people employed as directory assistance operators. Not directly, obviously, but it serves as a great example of how high tech does not create quantities of jobs to replace low tech ones. ---
**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, 7:29pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/50 "2008-12-15T19:29:46Z")
> [@Lemur866](#): > > You seriously can’t think of any idustries that are currently expanding? Do you need a list? Feel free to provide one. Specifically, industries that are not just “expanding” in the sense of making money for their owners, but actually providing substantial numbers of new US jobs. > [@](#): > > Automation and outsourcing aren’t exactly brand new, they’ve been happening since the dawn of the industrial age. So why hasn’t unemployment steadily increased since James Watt first invented the steam engine? We have a lot more automation today than we did 30 years ago during the 70s so why was unemployment higher in the 70s than it is today? Because new industries have arisen to employ those displaced workers. Factories employed displaced farm workers. Service industries employed displaced factory workers. But, and this is the difficult bit, what exactly is going to employ those displaced service workers? You seem to be hand-waving around this point. Name those industries. ---
**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, 7:31pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/51 "2008-12-15T19:31:21Z")
> [@gaffa](#): > > Does snark make you feel good? Is it a replacement for rational thought? > > The computer and the Net are wonderful tools and I use them every single day. But, as has already been pointed out, they have allowed many white collar jobs to be exported to other countries. For instance, when you have an x-ray, CAT scan or MRI, your local hospital very probably sends the digital scans to a diagnostician in India who e-mails back the result. I’m not claiming that these doctors don’t do an excellent job. But when film had to be mailed and results had to be mailed back, it was not feasible or medically sensible to do so. Now, as the Net has made it possible, it has also made it inevitable. An MD in Bangalore or Mumbai is going to charge a fraction of one in Chicago or New York. Yes the snark makes me feel good. My dad was a technician for the phone company, he worked there for 30 years and watched his department get smaller and smaller. His job doesn’t exist anymore, it’s all automated. I’m not able to have the same job my dad did. But thirty years ago my dad wasn’t able to have the same job I have today, because that job didn’t exist, it was barely imagined. The job of “remote imaging diagnostician” didn’t exist thirty years ago either. There’s a brand new job in a brand new industry. There are plenty of industries that are adding new jobs. Do you really need to be provided with a list of industries with increased demand for employment? ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [December 15, 2008, 7:39pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/52 "2008-12-15T19:39:10Z")
You want to know where jobs are being created? Here’s the Bureau of Labor Standards on the subject: [Industries with the fastest growing and most rapidly declining wage and salary employment, 2006-16](http://www.bls.gov/emp/empfastestind.htm) According to that site, by 2016: 717,000 new jobs will be created in Management, scientific and technical consulting services. 713,000 new jobs will be created in individual and family services. 480,000 new jobs will be created in home health care. 480,000 new jobs will be created in the computer industry. 512,000 new jobs will be created in residential care. 345,000 new jobs will be created in architectural and civil engineering services. 472,000 new jobs will be create in recreation, amusement and gambling industries. And the list goes on. And this chart just shows the heaviest hitters - it completely ignores the myriad jobs created in small businesses and specialized niches that together make up a large percentage of the work force. That same chart also shows the most rapidly declining jobs - garment manufacturing, tobacco farming, fabric mills, pulp and paper factories, etc. You’ll note that the jobs created greatly exceed the jobs destroyed. If you think about it, this has to be the case, and has been the case throughout the history of the U.S., since the population is growing but the unemployment rate is not. Is that good enough for you? And of course, a chart like that can’t predict the jobs that will be created due to innovations we aren’t aware of yet - just as the predictions from 1970 had no way of estimating the number of jobs that would be created at Microsoft and [Amazon.com](http://Amazon.com) and Federal Express. But you can be sure that there WILL be new innovations that will create jobs. Your premise is flawed, your claims are invalid, and the data refutes everything you are saying. ---
**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, 7:39pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/53 "2008-12-15T19:39:17Z")
> [@RickJay](#): > > Politics doesn’t explain your position. If jobs weren’t replaced by the market, unemployment would not be 10%, or 12%, or even 20%; it’d be 90%. Essentially everyone would be unemployed; almost all the jobs that existed a hundred years ago are gone now. We are not that far removed from when more than half the population was involved in farming, and the vast majority of those jobs are gone. Entire swaths of other job types have also been eliminated; how many switchboard operators and typing pools are there now? Most people today don’t even know what “Typing pools” were. > > Even your most generous estimates of unemployment can’t explain away where all the jobs have come from. That’s easy. The automobile industry and associated suppliers was a significant source of employment for displaced farm workers - witness the migration of African-Americans from the agricultural South to the industrial North. But new manufacturing is not producing new US jobs. If you create a new product, you’ll employ a tiny number of US designers, marketers and executives. But you’ll probably outsource the engineering to India. You’ll definitely outsource the manufacturing to China, unless the product is so heavy that it needs to be shipped by truck or rail, in which case it will be made just over the border in Mexico. > [@](#): > > This sounds terrific to me. Where’s the problem? We get cheaper MRIs, which makes it easier for us to stay healthy and lets us save money to spend on other things. India gets more money, making them a richer society and the richer they get, the more they’ll buy from us. Sounds like a win-win. I don’t see why it’s bad for Indians to improve their lot in life. The point I was making is this is an example of a very well-paid job being exported. The end result is the US being reduced to income parity with India. ---
**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, 7:40pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/54 "2008-12-15T19:40:56Z")
> [@gaffa](#): > > It sounds like you’re interested in whether or not I accepted the orthodox view of economics. I’m asking questions about how things work in the real world, not in the Econ 101 world of widgets. Again, please feel free to provide real-world examples rather than spouting textbook examples. Sorry if our examples of actual economic theory conflicts with your cherry-picked annecdotal examples, strawmen and gut-feelings.:rolleyes: You want specific examples of industries that create jobs, someone already pointed out “computers” to you. How many MILLIONS of jobs have been created in the IT and telecom field in the past 15 years? 15 years ago, there was no such thing as corporate email, the Internet, or instant messaging. How many cell phone companies were there 15 years ago? How many web developers? Database administrators? MP3 player manufacturers? And that’s just the fields I am personally familiar with. The healthcare industry is also growing. People are living longer and looking to stay healthier. That is creating increased demand for jobs in that field. So your X-rays can now be processed in India at a fraction of the price? Should society not benefit from reduced health care costs? It’s like Walmart. The market has determined that it’s more economical to create a company of 2,100,000 people to sell and distribute cheap products made in China than it would be to have those people working in the factories that create those products (and I can speak from experience that I would definately prefer to work in a WalMart storeas ANYTHING than run an injection molding machine in some smelly, noisy, hot factory). Here is what people like you do not seem to understand about the market. The market does not exist to make sure teamsters and x-ray technicians keep their jobs. It exists to attempt to maximize the value of the goods and services produced, based on the overall needs and wants of society as a whole. If you are in a field that is becoming obsolete, you need to look at what society is paying people to work on and figure out how to do it. ---
**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, 7:41pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/55 "2008-12-15T19:41:33Z")
> [@gaffa](#): > > The point I was making is this is an example of a very well-paid job being exported. The end result is the US being reduced to income parity with India. Why isn’t it an example of India being raised to income parity with the US? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 15, 2008, 7:44pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/56 "2008-12-15T19:44:11Z")
> [@sailor](#): > > 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. In the US the transition has been made. In other countries, these people can be found in slums around the main cities, or, if they are lucky, in sweatshops. Over time these people migrate into better jobs (in the US, at least, I’m not sure about Egypt and Rio) but displaced farmers don’t magically get good jobs immediately. > [@](#): > > 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. I think what is lacking here is an understanding of globalization. Everyone, including the OP.) In primitive societies jobs migrated around one town or village. In the US, jobs migrated across state boundaries. Grapes of Wrath ring a bell? When the mill jobs moved from Boston to the South, people moved to follow them. Today, jobs are moving across national borders, and it is a lot harder for people to move to follow them. I’m pretty certain that the global unemployment rate is falling thanks to automation, but the US unemployment rate is not guaranteed to improve. Thinking globally, the market will no doubt produce new jobs. That may not be true locally. Perhaps the Detroit autoworker may be excused for not being happy that three Vietnamese now have his job. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 15, 2008, 7:49pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/57 "2008-12-15T19:49:05Z")
> [@CalD](#): > > **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. You think that money put into the market automatically is used for creating jobs? Assuming he is wealthy, he is unlikely to spend it on consumer goods, since he no doubt has enough of them. Money in the market might create jobs, but it might also go into mortgage backed securities and down a rathole. > [@](#): > > .. 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. Unless there is an increase in demand requiring new workers to meet it, why would he hire three new people? Employers don’t hire for fun, they hire to fill an actual need. More likely the $150K will go into the bank to improve the company’s cash position. I’m sure you’ve noticed that the bailout money didn’t go into new jobs, right? ---
**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, 7:49pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/58 "2008-12-15T19:49:33Z")
> [@Lemur866](#): > > Yes the snark makes me feel good. Glad to give you a nice, warm feeling then. > [@](#): > > My dad was a technician for the phone company, he worked there for 30 years and watched his department get smaller and smaller. His job doesn’t exist anymore, it’s all automated. I’m not able to have the same job my dad did. But thirty years ago my dad wasn’t able to have the same job I have today, because that job didn’t exist, it was barely imagined. You and your Dad are two data points. The question is, what are the rest of the people who were working with him doing? Do they have your job, or similar jobs? I worked for Lucent for six months on a project. The team I was on consisted mostly of laid-off telecom former “lifers” who had been fired, and were now working as for temp agencies with no benefits, no retirement, etc. From what I gathered, this seemed to be pretty standard in that industry - fire, then re-hire without benefits. > [@](#): > > The job of “remote imaging diagnostician” didn’t exist thirty years ago either. There’s a brand new job in a brand new industry. Please…it’s the same job done elsewhere. Every x-ray has been read by a doctor. Hiring a doctor in another country to read the same x-ray means one less doctor in the US reading that x-ray. Making it cheaper to have an x-ray read may slightly increase the number of x-rays taken, but it’s not going to impact the need for x-rays. People don’t have unnecessary x-rays taken. > [@](#): > > There are plenty of industries that are adding new jobs. Do you really need to be provided with a list of industries with increased demand for employment? Yes. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [December 15, 2008, 7:57pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/59 "2008-12-15T19:57:14Z")
> [@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. Not just shovels - I’ve seen papers by high tech companies about how many tasks which it would make sense to automate in the US don’t make sense in China. However, as soon as the workers start making more money, the benefits of automation increase, so there is a ceiling on their income growth. So, I don’t think your point is really helpful to workers in general. ---
**Author:** ![Superfluous\_Parentheses](https://avatars.discourse-cdn.com/v4/letter/s/8edcca/32.png) [@Superfluous\_Parentheses](https://boards.straightdope.com/u/Superfluous_Parentheses)\ **Post date:** [December 15, 2008, 7:57pm UTC](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216/60 "2008-12-15T19:57:43Z")
> [@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. When it comes down to it, they’ll do whatever is necessary. Which is a cynical approach, but see below. > [@](#): > > 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. Yeah of course. But reducing costs in one aspect of the economy can enable other parts to grow where it just wasn’t viable before. > [@](#): > > 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. Ok, I’ll take cheap energy, and I’ll narrow it down to just cheap electricity. Cheap electricity means: Practically everybody can afford to have their house wired and lit, which means lots of electricians, light bulbs, being able to work when it’s dark, access to telephones, radio, TV, the internet and much more and all the jobs involved in that. > [@](#): > > 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. … I agree mostly. But you maybe can see that technological advances right now actually improve the situation for musicians compared to 30 years ago? That should mean more musicians will be able to make a living of producing recorded music, because they have much less overhead than they used to. [Previous page](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216.md?page=2) [Next page](https://boards.straightdope.com/t/why-do-people-insist-that-the-market-will-produce-new-jobs/477216.md?page=4)