Is this good or bad for the economy?

[Praxis101]

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A certain man owns a small business. He works five days a week, and makes $50,000/year.

After a few years, he decides that he would much rather take Fridays off. He values the time to sleep in, have fun and enjoy life for another day of the week more than the $10k/year that he makes working Fridays.

He takes Fridays off and now makes $40k/year. He makes less money, but enjoys his life more. Other consumers can no longer shop at his store on Fridays, but this also helps the competition.

Is this singular instance (however minute) good or bad for the economy? If good, why? If bad, what should be done about it?

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I'm thinking that as long as the competitors can do an equal or better job comperable to the job this man is doing (Meaning producing more value), there is nothing wrong with this economically.

[Praxis101]

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I think "the economy" should be serving people, not the other way around.

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When he takes his day off, fewer people are being served.

/devil's advocate

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If fewer people are being served, the thought process should be similar, but slightly more complicated. If the competitors do a better job quality-wise and are able to add an equal value in terms of the whole economy, it is still a good thing.

It all comes down to value added. We don't have enough information about competitors to give viable, definite answer.

[madnak]

Here's a question. If everyone were a robot, and worked 160 hours per week, would it be good or bad for the economy?

[madnak]

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I'll take that to mean the GDP

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Why do you believe GDP is the best measure of economic health? You can claim it's all semantic, but you jumped straight to GDP so it must have some appeal for you.

[MidGe]

It is an interesting question.

I have no doubts that in most western countries the income of individuals has increased over, say the last five decades, and so has their purchasing power. From my personal viewpoint, I am also certain that this has been accompanied by a lowering of my, and most people, standard of living, albeit in a somewhat pernicious way. I measn, I realised I was working extra to buy convenience foods that had nowhere near the same taste aa wholesome home cooked fresh ingredients, meaning, I was working hard to be able, to have the time, to work harder/longer!

I am definitely enjoying a perhaps less affluent (altough that is moot, whether a car is 2 or 5 years old makes little difference, etc..) but much more satisfying way of life from my hedonist perspective. [img]/images/graemlins/smile.gif[/img]

I am somewhat understanding the goals of economic affluence differently nowadays.


I do hardly work at all nowadays. [img]/images/graemlins/smile.gif[/img] But I eat, drink and smoke well! [img]/images/graemlins/smile.gif[/img]

[Daisydog]

[ QUOTE ]
[ QUOTE ]
A certain man owns a small business. He works five days a week, and makes $50,000/year.

After a few years, he decides that he would much rather take Fridays off. He values the time to sleep in, have fun and enjoy life for another day of the week more than the $10k/year that he makes working Fridays.

He takes Fridays off and now makes $40k/year. He makes less money, but enjoys his life more. Other consumers can no longer shop at his store on Fridays, but this also helps the competition.

Is this singular instance (however minute) good or bad for the economy? If good, why? If bad, what should be done about it?

[/ QUOTE ]

I'm thinking that as long as the competitors can do an equal or better job comperable to the job this man is doing (Meaning producing more value), there is nothing wrong with this economically.

[/ QUOTE ]

The problem is that by him producing less by taking off Fridays, there is less competition. Therefore, the market price for the product will probably go up a little. In the extreme, if this man had only one competitor and he quit working altogether, then the other competitor would probably be able to charge drastically higher prices for the same product.

[Daisydog]

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I'll take that to mean the GDP

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Why do you believe GDP is the best measure of economic health? You can claim it's all semantic, but you jumped straight to GDP so it must have some appeal for you.

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I don't believe GDP is necessarily the best measure of economic health. But if we want to have a discussion about "the economy" we have to define what we are talking about. I chose GDP as a convenient definition. Feel free to propose an alternative definition and we can all have a discussion about your preferred measure of economic health.

[Exsubmariner]

GDP would be neutral. His revenue from Friday would be spent Monday of the next week if the customer stayed with him, it would be spent at his competition if the customer was not loyal.

[Exsubmariner]

[ QUOTE ]
Here's a question. If everyone were a robot, and worked 160 hours per week, would it be good or bad for the economy?

[/ QUOTE ]

GDP would go up. But does that really mean anything?

[Exsubmariner]

No. Just less competition on Friday. A competitor raising prices on that day would just encourage someone to wait til Monday or shop on Thursday.