Do Jobs Matter?

Abstract

The golden thread of this book can be woven with a few words: jobs are costs, not benefits. The benefits are what is desirable, and must be distinguished from the costs incurred to enjoy them. I have reviewed many objections to this apparently revolutionary, but rather standard economic principle.¹ There is no reason to fear technology: even if, admittedly, it can create short-term disruptions, it allows people to work less and consume more. There is no fixed pool of jobs or incomes to be divided among people. Each supplier creates his own demand and, thus, his own job and his own income. Exports are also a cost: the more jobs exported, the better, because this means more consumption for less work. The ultimate normative criterion is welfare, not jobs nor even consumption. Only efficient jobs—jobs that serve to produce at the lowest cost what people want—contribute to welfare. By preventing exchange, public policies destroy efficient jobs. Economic growth is of interest not because it creates jobs, which it might or might not do, but because it increases most individuals’ welfare. Even during a recession, it is far from obvious how government can create efficient jobs when the costs of intervention are taken into account.