Who says we were going to get 1.6M new workers?
No one and nothing. There is no way to be that specific on an issue like this, it was an example. But common sense, historical observation, economic theory, and economic studies, suggest that higher prices reduce quantity demanded. Were 1000 jobs lost, 10,000,100,000, 500,000? No way to know for sure, but its close to certain that some jobs were lost.
but the extra money in circulation
That money was transferred not created. If it was actual new money, an increase in the effective money supply, then that could help during the depths of a downturn (depending on the exact nature of, and situation in the downturn, but
1 - 2014 was well in to the expansion, not the depths of the recession.
2 - During the depths of a recession, where increasing the money supply could be useful, increasing wages is particularly likely to be harmful. The fact that wages don't adjust downwards very readily is one of the reasons you have reduced employment and a deeper recession when times get bad. That's mainstream Keynesian theory (not that other schools disagree with the idea that pushing wages up in bad times is likely to be bad for employment). |
