Job destruction can be beneficial to a healthy economy. This is something that Donald Trump fails to understand, says policy analyst.
A policy analyst at the Washington Center for Equitable Growth, Nick Bunker, published an article in Vox about Donald Trump's failure to understand the concept of job destruction and job creation. He stated that both concepts are important in a country's economy.
Bunker writes that jobs are constantly being created and eliminated in an economy that is healthy. Job destruction does not simply mean that people are losing their jobs but in a healthy economy, it especially signifies that individuals are quitting their work.
If workers are quitting their occupations it means that they have found a new job. Bunker added that more quitting means that companies are poaching workers who already have jobs, leading to a competition for workers, which in turn ends up increasing wages.
This is called creative destruction. Trying to suppress such a destruction can lead to reducing its benefits which is what Trump, says Bunker, does not understand.
Trump wants companies to keep jobs in the country. For instance, he made a deal with Carrier to keep 800 jobs in its factory in Indiana instead of transferring it to a factory in Mexico.
Bunker writes that that kind of decision would lock out workers from new opportunities and job creation. In the end, Trump's so-called victory with Carrier and his other attempts to "save jobs" in the future will not significantly affect employment figures.
In another report made by Jobs & Hire, it is expected that Trump's presidential term will see the rise of automation instead of jobs. More companies are moving towards automation, which is negatively affecting jobs.
Visit the news website here to read more of Bunker's article as well as understand job creation and job destruction.