View source for Skilled vs. Unskilled Labor

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Economist Paul Krugman cites what other economists call a "lump of labor fallacy", which is the idea that there is an exact amount of work that needs to be done in the world, thus making any increase in the amount of work each worker does detrimental to the number of available jobs left (Krugman 1). This fallacy has resurfaced in times of sluggish economic growth, and it is a dangerous mentality when considering the job market.

Krugman states that such a mentality leads people into the false belief that new jobs are impossibility, therefore discouraging efforts to influence policy to help create new jobs. This can also lead to protectionism as Americans feel that jobs must be protected by preventing outsourcing, which would not spell well for the economy as it would close American markets to new producers, hurting both economic and diplomatic development.  

It is true that developing technologies have replaced and/or rendered jobs previously held by people obsolete. While new jobs can be created in the wake of these innovations, it is normally skilled laborers who profit from these new positions. For example, the advent of a self cleaning bathroom facility for use in places such as stadiums and gas stations has severely reduced the need for janitorial services in the locations using them. This reduction in needed labor benefits the businesses using these devices because it has boosted efficiency while cutting out required paid hours for custodians. Believers in the "lump of labor fallacy" Krugman highlighted might state that if these devices become more widespread in their use, that thousands, if not millions of custodial jobs would be at risk. The emergence of these bathrooms does benefit the more educated and specialized skilled labor class, as it creates job positions for designers, engineers and marketers, who would be needed to service, develop, and sell these units to businesses. It is clear in this case how the advent of newer technology has decreased the need for unskilled laborers and increased the need for skilled laborers.

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