Most of us would have played the game of musical chairs when we were younger. The game is simple. There is a fixed amount of chairs and there are always more people than chairs. Music plays and the players circle the chairs. When the music stops everybody tries to sit on a chair and those who fail are eliminated from the game. Whilst I have nothing against this game, having derived much entertainment and joy from it as a child, it is problematic when people view the labour market as a game of musical chairs.
The musical chairs analogy came from an Athenian economics professor named Antigone Lyberaki in a recent IQ2 debate on EU immigration. She was arguing against the motion that “Europe should shut the door on immigration” and made the point that most politicians misunderstand the relationship between immigration and employment. Many politicians view the labour market as a game of musical chairs. Lyberaki pointed out that the distinguishing feature is that in musical chairs the number of chairs is fixed whereas the number of jobs in an economy is not fixed.