Jobs, jobs, jobs – will put us back where we started

So Bunnings is going to open new stores, with a promise of “6000 jobs in the next three years”.

So Australia will have 6,000 more people employed than otherwise would have been, right?

Wrong.

Bunnings is a classic big-box retailer with relatively low staffing levels and very efficient backend logistics. The net result is that they require fewer staff to sell the same amount of stuff than the smaller hardware stores that they compete with.

So that means there will be fewer Australians employed, right?

Wrong.

The money saved by getting Bunnings to sell stuff, compared to some other hardware store, will end up in the pockets of Bunnings customers or Bunnings shareholders (including me, as I hold a few Wesfarmers shares). The odds are that they will use the money to buy other goods and services. Unless they blow all of it on overseas holidays or digital downloads from iTunes or Amazon, the providers of those alternative goods and services will expand to meet the demand.

Net result? Almost certainly, we end up with pretty much the same numbers of people employed, but producing more goods and services leading to a higher standard of living.

But the jobs created by one company’s expansion are really neither here nor there.

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