Jobs aren’t a resource (finite or otherwise)

There is a general hysteria around the idea of jobs being stolen, usually by foreigners, leading to an obsession with immigration and immigration curbing policies.

It seems to me that the government’s efforts to reduce immigration is partly, of course, to pander to this hysteria but also a convenient way to off-load the unemployment that their policies are causing onto foreigners. Essentially someone is going to be made unemployed by austerity so they should try to make sure foreigners are made unemployed first [1]. They can’t complain. The received wisdom is that if you deny foreigners jobs then it frees up jobs for everyone else. People generally accept this wisdom. The trouble is that it makes no sense.

It makes no sense because jobs aren’t a resource and therefor can’t consumed and can’t be finite. We don’t have a finite number of jobs to share. Nor do we ‘produce’ jobs in any meaningful sense. Individual positions can be taken. Individual positions at any one time are finite. But jobs aren’t finite in number or restricted to resources.

It’s easy to see why jobs can’t be a resource by asking “what happens when we are out of resources?” The answer, of course, is we get resources. The task of getting resources is a set of jobs. So even in a situation where we have zero resources, we still ‘have’ jobs. So jobs can’t be said to be constrained to resources at all.

Jobs are just an organizational convention. Take an analogy: activities. Can we run out of activities? No. The idea doesn’t make sense. An activity is just a name we give to make it easier to think about and organise doing things. Can someone ‘take up’ activities? Again, not really. Sure, specific activities can require specific resources, and should those resources be restricted then the activities that depend on those resources are restricted. The word ‘job’ is like the word ‘activity’ except that jobs have the property that jobs create jobs: if jobs can be said to be consumed, then consuming them creates them. That’s an unusual property for a resource.

“We need to stop immigration because they are doing all of the things and leaving no things for us to do!”

When someone works in the UK, regardless of who they are or where they’re from, they get paid in pounds. Those pounds can only be spent in the UK. They can be transfered to an account belonging to a foreigner, but even then can only be spent in the UK. They could exchange their pounds for some other currency but that would just give the pounds to someone else that can, again, only spend them in the UK economy (or in some other country that has adopted pounds as official currency).

This is what makes it wrong to think in simple terms of a job being taken up while all other factors remain the same. The worker earns pounds in order to spend them, which they can only do in the UK. This is what economists call contributing to aggregate demand. The extra spending power is extra demand that can be met by some other firm in the UK. This demand has the potential to provide the need for new work to be done, which can give rise to new jobs. The factors that decide whether or not that demand will translate into new jobs are: is supply limited and is the money supply limited?

Theoretically speaking there are two factors: Supply and Money Supply. If supply is limited then a rise in demand causes a rise in prices. This is because there is no new stuff to buy. The thing is that ‘supply’ is an economics abstraction and doesn’t come close to mapping onto any real thing in the real world. How could ‘supply’ be limited in such a way as to stop any rise in demand causing a rise in supply? Maybe during a war? Perhaps. If we were extracting all resources at their maximum rate, then an increase in demand would definitely cause prices to rise because there definitely couldn’t be in increase in supply… well, maybe, if you ignore marketing. Are we extracting all resources at their maximum rate? Of course not. Some individual ones, maybe. I’m not sure what could manifest itself as restricted ‘supply’ in real life. Supply is rarely limited across the board, if ever. It seems that the idea of supply is so abstract that it can’t be limited, ever, without something systematically limiting it on purpose. But, there is one thing that we need to order to create jobs.  It is our chosen convention to only instantiate jobs that can be financed. No new money means no new finance, which means no new jobs, regardless of demand. So you might think “ah-ha! money is in limited supply and therefor jobs are too!” Well, money is not in limited supply. Money isn’t produced, it’s issued. We don’t dig it out of the ground. Austerity by definition the choice to restrict the money supply stopping the economy from instantiating new jobs.

The irony is that jobs are constrained to the money supply, which is restricted by austerity, so what appears to be a limited jobs supply is really a limited money supply caused by austerity.

[1] It’s interesting to realise that child birth is no different to immigration. Children being born is new people arriving in the economy. The difference being that immigrants tend to appear in the economy fully grown, and so require less investment. Why is the idea of restricting immigration so naturally accepted while the idea of restricting childbirth would be seen as hugely tyrannical?

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