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How Do We Create Enough Jobs?


     There is no such thing as 'not enough jobs'.  There is no limit to the total number of potential jobs.  It is only a matter of price (wage rate).  Let's demonstrate this with a simple illustration.     

     If some unemployed people were willing to work for $0.30 per hour, I and others would be happy to hire them to wash windows, pull weeds, and do other things for which we would be willing to spend $0.30 per hour to accomplish.  (At $1,000.00 per hour, these tasks would not get done or we would do them ourselves.)  When all the formerly unemployed become employed, other potential employers would be unable to get in on this good deal.  However, those who missed out would soon realize that they could get almost as good a deal by hiring the formerly unemployed away from us by offering $0.45 per hour.  The wages would be bid up until, at some level (actually 'levels', depending on various skills available from 'employees' and desires of potentail employers), no more of the formerly unemployed would be offered higher wages to lure them away.

     To sum up, when people can gain by hiring others, they will.  When they don't think they can gain by hiring others, they won't.  Of course, this process is going on all the time.  If someone invents a widget that people will buy at a sufficient price, even if there is already 'full employment', he can hire workers away from other jobs by offering higher wages and still make a profit.  For many very important ramifications of this principle, see my booklet “Must Trades be Equal in Value to be Moral?”.

     One more very important question.  What about the $0.30 per hour (or whatever) I and others no longer have available to spend because of our new employees?  What effect will this have on the rest of the economy?  No problem.  Our new employees will spend it, although possibly for different things than we would have.

     The moral of the story: there are always enough jobs.  It is just a question of price, i.e., wage rate.