2

It would seem that most people who are born will eventually enter the workforce. Maybe that entry is delayed due to college or enlistment or that very important backpacking trip through Europe, but it seems that most people born will eventually get hired somewhere.

So when you hear that the economy increased by fewer than 200k jobs, but over 300k people entered the labor pool, doesn't that really mean 100k more unemployed people? It doesn't seem like any figure smaller than 300k jobs is even breaking even against population growth. What am I missing here?

  • 59
    People die. It's true. – user22277 Apr 5 at 20:45
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    I don't really understand how this question got so many upvotes when it is failing to take into account the obvious factor of the rate at which people leave the labor force. This is not a good question. At all. – John Apr 6 at 1:04
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    @John The question entered HNQ and visitors can upvote but not downvote. – gerrit Apr 6 at 7:14
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    Lots of people don't work... students, stay at home moms (and dads), retirees, the disabled, homeless, people on extended leave (just because they have the means to do so), military (I don't think that is in your jobs numbers), kids in their 20's and even 30's that live with their parents and don't want to work, etc. – Robert Hanson Apr 6 at 13:37
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    @RobertHanson Don't forget the dead. They're by far the most important bulk of workforce lost :P – Luaan Apr 8 at 7:44
71

The obvious answer is that people get older and (presumably, hopefully) retire from the workforce.

If your country's demographic is otherwise more or less stable, it means that by the time those 300,000 people age up to enter the work force, a similar number of people retire from the work force and hopefully live on their pension plan.

  • 2
    +1, though we've also got an aging population. Figure 1 shows US population growth was largest ~1950 and 1965, which corresponds to folks between the ages of 55 and 70 – Punintended Apr 5 at 16:06
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    Or more analogously to the "300k births" number, there are also 230k deaths per month. So anything above about 70k new jobs per month is a surplus. (I know this is a vast oversimplification) – MooseBoys Apr 5 at 18:14
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    See Business Insider that did the "calculus" to arrive at an answer of how many jobs need be created to maintain balanced population/jobs. Their answer 203,000 per month. [ businessinsider.com/… ] – BobE Apr 6 at 15:55
23

In addition to the other answers, it should be noted that jobs don't just exist independent of people. The only reason jobs exist is that people create the need for jobs, so more people means more jobs.

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    A small correction. People create the need for products and services, and that need creates jobs. There are times when society creates jobs merely because jobs are needed, but that is, at best, a temporary fix. Unless the work product is of value, ultimately the job is just a tranfer payment in disguise. – Walter Mitty Apr 6 at 10:39
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    But if jobs are automated away, there is LESS need for jobs. Driving long distance trucks (3.5M) and taxis (+Uber and Lyft: 1M) might be 90% automated in a decade. All those millions of people doing it now will need to find new skills to be paid for (to be able to pay other people). – Peter M. Apr 7 at 17:35
  • Yeah, this is only true in a world where productivity per worker is constant. The need for additional production can either be accomplished by having more jobs at the same productivity or the same number of jobs (or fewer!) at an increased productivity. This is, in fact, what we might see as automation really gets going - the increase in productivity per worker may be high enough that the number of available jobs will decrease despite the continual growth in needed production. It makes you wonder how our current system of basically requiring employment will react. – probably_someone Apr 8 at 8:12
  • One way to fix this is to have wages tied to productivity, so that the few people who have jobs in production can afford to pay people to do things for them and expand the service economy to make up for the gap. Unfortunately, at least in the US, productivity and wages have not been related since around 1973 (see e.g. epi.org/productivity-pay-gap). Real wages have remained roughly constant as productivity continues to grow. – probably_someone Apr 8 at 8:18
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    On obsolescence of work, I can add a made-up quote of a working man circa 1890: Cars will make hundreds of thousands of horse carriage drivers jobless!and telephone operators 30 years later, and human computers 30 years later, and so on. There will always be new more advanced jobs that follow major changes. – Juha Untinen Apr 8 at 8:51
14

"300k people entered the labor pool" and "300k+ births a month" are very different things.

You can get to 300k new people in labor pool, if you have 150k people reaching employment age, and 150k of previously long-term unemployed people (excluded from the labor pool by labor statistics bureau) started looking for a job (because they decided such with low unemployment, they have chance to get the job even if they could not get it before).

And to get to 150k people reaching employment age you need more that 150k births, 20 years earlier.

We have no idea how many jobs will be available 20 years from now for people born now. It could be singularity and robots will do all the work. Or climate collapse could start WW3.

And then there is immigration, legal and illegal.

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    thanks for adding numbers: other answers miss that part. – aaaaaa Apr 7 at 2:42
4

In addition to other answers. (+1 to Kloddant).

Note newborns will only enter the labor market after 20 years or more. The economy is supposed to grow (even when the population is stable) a lot in that time frame, so by the time anybody born today ends college the new jobs increase ratios is supposed to be a lot higher than today. Of course, no one can give us a real number of new jobs created for 2039. But we hope it will be more than 300k.

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    yes, but with automation the economy (=GDP) can grow while jobs shrink at the same time. – Fizz Apr 5 at 18:35
  • But the people entering the job market now correspond to births 20ish years ago, and he's assuming the birth rate was roughly comparable then. – Barmar Apr 5 at 18:53
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    @Fizz There are lots of things to consider. Someone talked about immigration, for example, but that is peanuts compared to job migration (when you close a facility in Europe to reopen another in Asia). Analysts try to extrapolate all those graphs and that's why you cannot correlate today birth rate with today jobs increase rate. In fact, if jobs increase rate was as big as birth rate that can mean you really need immigrants and automation badly. – jean Apr 5 at 19:53
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    That might happen even without automation; South Africa is an example economist.com/special-report/2010/06/03/jobless-growth – Fizz Apr 5 at 21:06
  • Correction: we hope newborns will only enter the labour market after 20 years or more. – Sean Apr 7 at 2:52
2

"On average, 205,300 jobs need to be created every month just to keep up with population growth"

per Business Insider Aug 2016.

Their article appears to be an analysis of this issue, however I will leave it to the reader to debate the accuracy and/or validity of the conclusion. If the analysis was valid in 2016, I would think that it is equally valid 2.5 years later.

-1

Other posters noted that you need to subtract the number of people who age out of the labor force from the number of people who reach the adulthood each year. In a thriving society, both numbers are substantially less then the number of births.

In a thriving society, a large fraction of the working age population does not work for monetary pay. They have better things to do: Homemaking, raising children well, gardening, volunteer work.

If a society manages to have 90 % of its working age men working, and 30 % of its working age women working, and does not have net immigration/emigration of working age adults, then the rate of creating net new jobs should average about 60 % of the rate of net new working age adults.

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    A society with an excess of births is not thriving, it is on the road to suffering from overpopulation, if not actually there yet. Also, it is observed that in economically healthy societies, most people do not consider homemaking, child rearing, and so forth to be better things to do. – jamesqf Apr 6 at 18:01
-2

Quick answer. Money is produced by private and corporate bank loans. With a fixed base money supply (because bond rates have been flat for 40 years now) this means debt can not be repaid because it amounts to more money then there exists. So there things allow this to continue, new loans but this grows the interest leading to the other two. Alternatively the loans can default, or the banks can essentially give money back.

The give back is why we don't need 100% employment. Most middle class can live off investment and pensions. With enough principle it is trivial matter of funding.

This is in contrast to prior where you got the give back from a know, standard source, gov bonds. Reliable, riskless, standard insertion of new currency. Today bond rates have been flat and non competitive. With growing world economy private and corporate banks use debt to create new money and give interest back through literally any way you can think of. Insanely well paying do nothing jobs, artificial investment growth, or sometimes not at all, bankruptcy.

protected by Philipp Apr 6 at 9:12

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