Misconception in economics about allocation of work.
In economics, the lump of labour fallacy is the misconception that there is a finite amount of work—a lump of labour—to be done within an economy which can be distributed to create more or fewer jobs. It was considered a fallacy in 1891 by economist David Frederick Schloss, who held that the amount of work is not fixed.[1]
The term originated to rebut the idea that reducing the number of hours employees are allowed to labour during the working day would lead to a reduction in unemployment. The term is also commonly used to describe the belief that increasing labour productivity, immigration, or automation causes an increase in unemployment. Whereas opponents of immigration argue that immigrants displace a country's workers, this may not be true, as the number of jobs in the economy is not fixed: it is possible that immigration could increase economic activity to such an extent that more new jobs are created than the immigrants themselves go on to occupy.[2][3]
The lump of labor fallacy is also known as the lump of jobs fallacy, fallacy of labour scarcity, fixed pie fallacy, and the zero-sum fallacy—due to its ties to zero-sum games. The term "fixed pie fallacy" is also used more generally to refer to the idea that there is a fixed amount of wealth in the world.[4] This and other zero-sum fallacies can be caused by zero-sum bias.
^"Economics A-Z: terms beginning with L". The Economist. Retrieved 21 December 2016.
^Bercow, John (October 2005). "Incoming assets: Why Tories should change policy on immigration and asylum". SMF.co.uk. Social Market Foundation. Archived from the original on 28 September 2007. Retrieved 16 September 2006.
^Cooley, Laurence; Farrant, Macha; Sriskandarajah, Dhananjayan (November 2005). "Selecting wisely: Making managed migration work for Britain". Institute for Public Policy Research. Archived from the original on 11 March 2007. Retrieved 16 September 2006.
^Perry, Mark J. (23 December 2006). "The Fixed Pie Fallacy". American Enterprise Institute. Retrieved 23 March 2019.
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