More Workers Is Good for Workers

Moneybox
A blog about business and economics.
Oct. 8 2012 1:35 PM

More Workers Is Good for Workers

Workforce participation among older Americans has gone up since the 1990s due to diminished wealth and perhaps some demographical factors, and some people see it as something that "squeezes" younger workers out of jobs. But Suzy Khimm writes that a study from the Center for Retirement Research shows the opposite and "the evidence suggests that greater employment of older persons leads to better outcomes for the young in the form of reduced unemployment, increased employment and a higher wage."

This is is important because it intersects with two other issues that are a much bigger deal in terms of scale—formal legal curbs on international immigration and informal curbs on domestic migration via anti-density policies. Part of why people misunderstand the policy issues in those areas is that they have this same suspicion that more workers competing for a fixed pool of jobs will hurt the incumbents. But while there are certainly specific scenarios you can devise in which that's the case, the general case is the opposite. If more people come somewhere wanting to work—or more of the people who are already there decide they want to work—that has a positive impact on the other people around.

Advertisement

To see why, start with a time when things were different. During the Black Death, wages rose as population fell because the key input to the medieval economy was arable land. When the population is dense, all the returns go to the entrenched landowners and normal people need to live on a subsistence diet of grain. But eliminate a huge share of the population and suddenly there's plenty of land available for grazing animals and everyone gets to eat meat and cheese and butter along with their bread. Hooray!

But a modern, advanced economy is mostly made up of people. People are the key customers for the services that the majority of us produce for a living. And we produce things in teams that are composed of diverse clusters of labor. Slate has writers and copy editors and developers and art people and sales people, and we can only scale so far in any given direction without scaling across the board. A scarcity of qualified developers or skilled ad sales reps could stop us from being able to hire more writers. An ambitious sous chef might get hired as a head chef at a new restaurant but only if there are waiters and busboys to hire to staff the rest of the place. More workers means more dry cleaning gets done, and more people in town means more customers who prefer your particular approach to styling hair. Doctors are more productive when there's an ample supply of good nurses and health care technicians, and the arrival of more doctors means a greater demand for the skills of everyone else in the health care value chain. You lose out as a worker when more people with your exact skill profile show up. (Higher flows of Latin American immigration, for example, appear to depress the wages of a metro area's existing stock of Latin American immigrants.) But you win when people with different skill profiles arrive in the workforce.

And since people who are different from you outnumber the people who are the same, more people means more opportunities.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Smash and Grab

Will competitive Senate contests in Kansas and South Dakota lead to more late-breaking races in future elections?

Stop Panicking. America Is Now in Very Good Shape to Respond to the Ebola Crisis.

The 2014 Kansas City Royals Show the Value of Building a Mediocre Baseball Team

The GOP Won’t Win Any Black Votes With Its New “Willie Horton” Ad

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

Technocracy

Forget Oculus Rift

This $25 cardboard box turns your phone into an incredibly fun virtual reality experience.

One of Putin’s Favorite Oligarchs Wants to Start an Orthodox Christian Fox News

These Companies in Japan Are More Than 1,000 Years Old

Trending News Channel
Oct. 20 2014 6:17 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
The World
Oct. 20 2014 1:50 PM Why We Shouldn’t Be Too Sure About the Supposed Deal to Return the Abducted Nigerian Schoolgirls
  Business
Moneybox
Oct. 20 2014 7:23 PM Chipotle’s Magical Burrito Empire Keeps Growing, Might Be Slowing
  Life
Dear Prudence
Oct. 20 2014 3:12 PM Terror Next Door Prudie advises a letter writer whose husband is dangerously, violently obsessed with the neighbors.
  Double X
The XX Factor
Oct. 20 2014 1:10 PM Women Are Still Losing Jobs for Getting Pregnant
  Slate Plus
Tv Club
Oct. 20 2014 7:15 AM The Slate Doctor Who Podcast: Episode 9 A spoiler-filled discussion of "Flatline."
  Arts
Brow Beat
Oct. 20 2014 9:13 PM The Smart, Talented, and Utterly Hilarious Leslie Jones Is SNL’s Newest Cast Member
  Technology
Future Tense
Oct. 20 2014 4:59 PM Canadian Town Cancels Outdoor Halloween Because Polar Bears
  Health & Science
Medical Examiner
Oct. 20 2014 11:46 AM Is Anybody Watching My Do-Gooding? The difference between being a hero and being an altruist.
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.