What Really Matters: The Long Run (I)

If you own the only grocery store in your small town, you are clearly harmed if a competing store opens across the street. If you work in a small telephone equipment store and a large company starts taking away business via Internet sales, you will obviously be worse off. If you used to be employed at a call center for customer service at Wal-Mart and have just lost your job because Wal-Mart outsourced to a cheaper Indian firm, you will have to look for a new job.

These kinds of “losses” of income or jobs have occurred since the beginning of commerce. They will always exist in any dynamic economy. Indeed, if we look over the American economy as a whole, in a typical year roughly one million workers lose their jobs every week . But in a typical year slightly more than one million people find a new job every week.

So on balance, employment in the United States keeps growing, even though the average person will change jobs every three years—some, no doubt, because of international competition. But job turnover like this is an essential component of a labor market that is continually adjusting to economic change. It is a sign of health, not sickness, in the economy.