Recent Developments

The common-sense idea that plentiful jobs are the best way to address things like workplace discrimination, poor working conditions due to inadequate regulations, or illegal unpaid overtime: Labor Market Regulation: Freedom and Property Rights Are Red Herrings

("Lack of jobs for scientists story goes mainstream": U.S. pushes for more scientists, but the jobs aren’t there)

Low recruiting intensity continues despite a fall in the job fill rate, which critically suggests that some people might have more bargaining power than they think: Why That Great Interview Didn't Land You a Job: Recruitment Intensity Rates and Mass Unemployment

Nobel-prize winning economist says that there are no negative consequences for the economy from working less, except maybe a decrease in tax revenue: What You Add Is What You Get - NYTimes.com


It seems some people have the idea that if everyone just works hard and is nice to each other, then productivity will increase and people will get paid more, allowing them to buy more stuff. This might be based off a mental economic model of "The US's wealth vs the amount of wealth in other countries, including ownership of US government debt" and by encouraging everyone to work hard, the US will 'win' and jobs will be created due to abundant wealth.

People might even think of "success stories" where encouraging people to be 'nice' seemed to lead to positive results, like the cancellation of the plan to add a banking fee to customers of some major bank. But the well-intentioned reporting of this type of story in the news media is only a distraction from the fact that generally speaking, wages are the result of supply and demand. Maybe as a result of OWS, more people are aware that productivity gains are not being shared with workers.


Another reason people seem reluctant to work less is the idea of 'consumer surplus' when something is sold for less than what someone would be willing to pay. This assumption was mentioned in the first post on this site and described in more detail in "The Occupy movement is wrong about the rich". Specifically, the reason for this assumption seems to be a cognitive overemphasis on "people with unmet needs" as well as "situations of which one has personal knowledge". If someone is selling a product X, and other people are also selling X, someone might be inclined to discount the gain to competitors selling X that would result from a reduction in the amount of work one does, possibly to guard against invitations for collusion. Simultaneously, it is seen as beneficial to help and offer low prices to poor customers, or even rich customers, again as described in the first post on this site.

Concerning the idea that working less leads to a lower contribution to tax revenues, there are several possibilities but the end result in all cases is that working less is a morally neutral decision from the point of taxes.

Possibility 1: you are a monopoly provider, no one else can offer the same level of service you can, and if you work less someone will just not spend any money.

Compare this to a hypothetical situation: rich people collectively agreed to "starve" the nation by not spending any money, or just the bare amount needed to survive. For example see Economy is in Crisis, Yet Luxury Brands, Tiffany's, LVHM Still Report Sales Growth — "The high prices do not seem to ruffle customers – in fact, many high-end businesses have been able to mark-up items to attract clientele who liken quality with price."

If this situation were to happen, people would probably conclude that rich people did not have the nation's best interests in mind and would be much more supportive of fiscal stimulus. This option is also available in the unlikely case that many 'extremely unique' people decided to work less and customers decided not to purchase similar products from other providers as a result.

Possibility 2: you work less, but there is a shortage of other providers and so prices go up instead of the business just hiring someone else less experienced to fill in. If this is such an exclusive occupation you are probably selling to the rich who can afford to pay higher prices, both to you and to your competitors. This means increased income and taxes for your competitors will partly make up for the lower taxes paid by you, while the customers who were forced out of the market can just spend their money on something else.

Possibility 3: you work less, and a competitor offers the same product at a similar price or a slightly inferior product at a lower price. If at a lower price, then lower taxes will be paid due to both lower revenues for the entire market and the progressive tax code but the sales are being made to someone who might otherwise not have had any work and would have had to be supported by welfare from taxes.


The "decisions based on well-known local information" also applies to where money goes. When taxes are too low compared to spending, sometimes useful programs that prevent poverty etc. get cut even when the government is spending money on $100k+ pensions, $17k drip pans that could be made for $2.5k, signs announcing stimulus spending instead of on actual projects, etc. Paying more in taxes might thus contribute to keeping useful programs, and it becomes difficult to use taxes as the reason for working less.

However, when the 'taxes' go to the company one works for, such as an investment bank where the average salary is already over $200k, it can seem much more acceptable to work less time at a higher wage rate.