Why do we assume everyone should be working?

I was talking to a friend of mine and I asked this. She said “of course everyone should be working, I mean, I’d like to be able to buy more stuff”

In that statement though there really is a non obvious implied logic. So the next question: does economics support that statement always? That if we want more stuff, and better lives, everyone should be working harder? No, only sometimes; in economics, utilizing a resource to it’s fullest at all times is not a given. Labor is a resource, like water, and yet we do not drain the oceans with the same fervour as we employ people, trying to find a job for every drop.

When we have implicit assumptions such as these, it drives our decision-making. A politician should not need to hunt for job creating policies, and yet they do because admittedly the alternative is poverty. Not because the economy couldn’t provide for that person, but because the only way for the economy to provide for them is through the wage.

Here is a very simple statement which may sound a bit mean: it is entirely feasible that giving a job to a “stupid” person, regardless of how much we try and train them, might cost the economy more than we benefit, in aggregate.

Disagree all you want on the definition of “stupid”, but you cannot deny that such a bar exists, and notably, that that bar moves up, and only up, as technology improves. What that means is, there may well be cases where the economy would actually like to pay someone to stay out of the labor force, but right now, it can’t. Remember when oil prices went negative? It’s hard to understand how that can happen, but at least for oil, the economy has the power to set that price negative to essentially say “hey, I don’t want more of this right now”.¹

We have to stop assuming that the economy wants everyone to be working. Otherwise, we may be silently strangling it with labor. Our current systems of taxes and benefits almost entirely assume we need everyone. By the findings of Acemoglu and Restrepo 2026, there’s already good evidence that for the past 40 something years, this assumption has been hurting us.

I’ve worked on this idea for a couple years now, and somehow, it managed to culminate in a theory of how wages are set. You can read about it here:

Working on Economics with Fable 5

Footnotes