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So, instead of increasing demand we decrease supply by having people work and thus produce less?

Simplifying that, we will gain more by producing less?

No, this is basically just a way of increasing headcount without increasing production.

They're basically arguing that e.g. instead of 10 workers producing 10 widgets, you have 12 workers produce 10 widgets with each of them taking more vacation. Labour costs go up, some more wealth gets shifted back to labour, and this increases aggregate demand without changing supply.

But it never works like that. If I have a company, I'll hire as many people as can produce more for me than they cost me. If you reduce the amount they can produce, that means that I will hire fewer people - not because I'm evil and manipulative, but because that's the way the economics works out for me, the employer.

If they still produce more than they cost you, then you should hire more people. There certainly is a threshold where people become too expensive but the questions is when this is reached. looking at sky high corporate profits these days I think people produce much more more value than they are being paid.

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