Well of course not

Older workers do not steal jobs from young people and wages and job prospects for the under-50s would actually improve if baby boomers were kept in work longer, a study found.

Ros Altmann, the Government’s older workers’ champion, said the idea that older workers took jobs from the young was a “myth”.

Because the lump of labour fallacy is indeed a fallacy.

There is no fixed number of jobs in hte economy, there is no set amount of work that needs to be done. More people working creates more demand for the things those people can afford to purchase, pushing up the total number of jobs in the economy. This is true whether it’s wrinklies and crumblies working or not.

16 thoughts on “Well of course not”

  1. bloke (not) in spain

    But, BiG, that’d depend where the wages were spent. If they’re remitted home, they don’t remain in the economy..

    But I’d have thought the argument implies the Keynes multiplier does multiply.

  2. But does an oldie taking a job, rather than a youngster, generate more than one new job or less? Presumably depends on the job and the oldie.

    The same with immigrants; I thought the stats were that the ones we’ve actually had have, in aggregate, increased GDP but reduced GDP per person.

    And isn’t the problem with the Keynes multiplier that there is also a multiplier on tax, so that although the benefit of £1 of government spending is more than £1, so is the cost?

  3. Try thinking like a leftie. You’re 22 and fresh out of uni with your degree in Media Studies. You’d like to work at the BBC, but they have a fixed budget, forever under pressure from those nasty Tories / nasty New Labour. If they imposed a retirement age of 50, there’d be more vacancies each year, and you’d have a better chance of getting a job there.

    Meanwhile the rest of the economy doesn’t have a fixed budget, imposed from on high. But your leftie won’t even consider private-sector work.

  4. Andrew M: You’re 22 and fresh out of uni with your degree in Media Studies. You’d like to work at the BBC

    Top Gear has just suspended an old worker – go for it!

  5. Ros Altmann is spinning, as usual. She used to talk a reasonable amount of sense but now – as one of the people she claims to be defending/protecting (possibly *because* I am and so know a bit more about it than the majority of her audience) – I find her pronouncements speciously misleading.
    Simple fact – the old age pension is greater than JSA for a 18-25 year old. So if the old guy retires and a youngster takes his job the spending power in the range of income where spending is 100%, or near enough, of net income increases so the Keynesian multiplier effect is greater. Ros Altmann says more people will be in work if the old guy stays at work: no, because there are three or more unemployed younmgsters queueing up to take almost any job that is vacated (not mine, alas) so almost anyone retiring will be replaced and spending will increase so the Keynesian multiplier willincrease the numberof jobs in the whole economy.

  6. “because there are three or more unemployed younngsters queueing up to take almost any job that is vacated” – hmm, not so sure about that – its nice jobs the youngsters want, no crap jobs. AFAIK, employers find it difficult to fill vacancies for crap jobs at crap wages (whoddathunkit ?) and the youngsters find it difficult to get nice jobs for good wages. Its complicated.

  7. I sneeze in threes

    Of course old people in work don’t spend all of their money they just bake it in to pies or hide it under the bed.

    If we got rid of this socialist banking system all the excessive money old people unhelpfully and selfishly save would result in the banks possibly lending it to other people, enticing the borrowers in with perhaps lower interest rates. This process of magical banking would result in money circulating in the economy just as if a young person had been employed at the expense of an old person in work.

    If I won £100m on on the lotto I’d be curious to find out if they’d let you actually withdraw it and put it in a vault as this would surely fuck them up with the reserve ratio multiplier effect. I say to old people keep your jobs, bake your money in to pies and fuck the old lady of Threadneedle Street.

  8. @ johnny bonk
    We’re not short of bin-men or street cleaners round here. There are leaflet deliverers going round dropping adverts for cleaners, and window-cleaners, through letter-boxes.
    Employers will find it difficult to find people to do *any* jobs that pay less after tax and travelling expenses than doing nothing (unless it’s in the performing arts or an “internship”, where well-off parents will pay to buy their children an entree to a lucrative career). That’s thanks to manifest idiocy of the previous government. Nothing to do with them being crap jobs.

  9. “Older workers do not steal jobs from young people and wages . . .”

    If anything else, I would have said its the opposite.

    Get a young person in who can do the job 75% as well as the experienced guy, then pay him half.

  10. bloke (not) in spain
    March 11, 2015 at 9:04 am

    But, BiG, that’d depend where the wages were spent. If they’re remitted home, they don’t remain in the economy..

    But I’d have thought the argument implies the Keynes multiplier does multiply.”

    At some point those remittances have to come back – otherwise all that’s happened is someone has purchased a good or service in exchange for *paper*.

  11. @ Agamemnon
    “At some point those remittances have to come back”
    Not necessarily – it could mean that a Polish family goes on holiday in Spain instead of a British one.

  12. Pounds aren’t useful in Spain or Poland. They have to be sold for Euros or Zloty. Thus it is not possible for any “British money” to ever “leave” Britain.

    Incidentally the selling of Pounds for Zloty is balanced by the purchase of Pounds for Zloty. If there is any imbalance the market price changes until there is no more imbalance.

  13. @ BiG
    Nice theory, pity about the facts.
    For both pound and zloty the biggest amount of commercial transaction (excluding Forex gambling by banks) is into the Euro so the pound:zloty exchange rate is a side-effect of the £:€ and the €4:zloty rates. Any imbalance in £:Zloty trades is small change and has negligible impact on the £:€ rate and only marginally impacts the €:Zloty rate. Which is why we can have half a million Poles sending money home from the UK without the Zloty going through the roof since UK exports to Poland are less than half our imports from Poland.

  14. The idea there’s a “lump of labour” may be a fallacy. But labour is not the only input. Other inputs – especially land – are more lumpy.

    Given the choice, isn’t it better to live in a high-wage, low-property-price country, rather than a low-wage, high-property-price country?

    What you want is a high capital-to-worker investment. That’s how you get productivity growth, isn’t it?

  15. “john77
    March 12, 2015 at 9:58 am

    @ Agamemnon
    “At some point those remittances have to come back”
    Not necessarily – it could mean that a Polish family goes on holiday in Spain instead of a British one.”

    And then those Spaniards? What are they going to do with British paper?

    As I said – at *some* point – that paper has to come back to Britain in exchange for British goods or services or someone has simply bought a load of overpriced high quality paper.

Leave a Reply

Your email address will not be published. Required fields are marked *