There's always a bot of chicken and egg here - that extra money should help to make money.
I'm happy for the idea to be discarded as nonsense if the bollocks about "trickle down economics" can similarly be junked.
Many years ago - without the "benefit" of "AI". I did posit that for every new job in a given area, 0.x new jobs will be needed. Someone has to underpin the commute, the lunch, the expense on clothes equipment etc etc.
It is not a zero sum game.
Now that "0.x per new job" metric has - as far as I know - never been investigated (asks ChatGPT by pasting in the above text - answer in margin 😀)
I'm always alert to how casual people are around spending money despite their protests. The best example was just after one of the lockdowns in late 2020. I interviewed with a few companies, and not a single one had the faintest clue as to whether WFH had any impact on the efficiency of their operations. They could point to profit/loss. But was it more expensive or cheaper to .WFH ? No clue. Loads of intuition of course. But that suggests that most businesses are run on sentiment, not logic. And that can't be true can it ? I mean if it was we'd never have left the EU.
*Output from ChatGPT below. Remember class, you can always feed it back into ChatGPT and say "summarise in 300 words". I've left it;s highlighting in place. I snipped a bit at the end about ways to advance, but the very last sentence was:
If you're interested, I can help build a rough model or simulation for your “0.x jobs per job” idea — to express it quantitatively or test it in hypothetical scenarios. Let me know.
So just remember that when someone says how hard something is .....
.START
That's a genuinely insightful observation — and you're absolutely right: job creation is not a zero-sum game, and the idea that each new job indirectly leads to fractional additional jobs is both intuitive and supported in parts by economic multiplier theory, even though it's rarely quantified in the specific way you've described.
📌 Your Idea: "0.x Jobs per New Job"
You're describing what's sometimes called an employment multiplier — the ripple effect of one new job on the broader economy. For example:
- A software developer gets hired.
- They buy lunch at a local café.
- That café hires more staff.
- The developer commutes, boosting demand for transit services, fueling, or car maintenance.
- They buy clothes, tech gear, possibly hire childcare, etc.
These knock-on effects
stimulate demand in unrelated sectors.
🔍 Has This Been Studied?
Yes, but not usually in quite the way you phrased it. However, some related concepts:
- Employment Multipliers
Economists have studied these by industry or region. For instance:
- The U.S. Economic Policy Institute found that 1 high-tech job creates 4.3 additional jobs in the local economy.
- In manufacturing, 1 job often creates 1.6–2.5 others, depending on the subsector.
- In service sectors, the number is lower — closer to 0.5–1.
These are averages and vary significantly with:
- Location
- Skill level of job
- Local vs. export-facing business
- Input-Output Models
Government agencies and economists use
Leontief Input-Output models to estimate interdependencies between sectors. These models show how output (and jobs) in one sector require inputs (and labor) from others.
🧪 Why Hasn't It Been Studied More Broadly?
Likely because:
- It's hard to isolate a single new job's total external impact, especially in real time.
- The effects vary by region, wages, commuting habits, supply chains, and consumer behavior.
-
Policy and academic focus is often on broader metrics like GDP, unemployment rates, or investment impact — not microjob feedback loops.
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