Only if you assume that there are a fixed number of jobs available. And even if you do believe that, why is 40 hrs the optimal number? Just think, rather than 100 people accomplishing 5000 hours of work per week, we could hire 5000 people and then they only have to work 1 hour per week! Everybody wins!

On the other hand, perhaps everyone is better off if those 20 people go out and start companies that create jobs?

> "why is 40 hrs the optimal number?"

This number was determined during the industrial revolution to be the general maximum working hours for productivity to remain constant over a long period.

Which is to say, over 40 hours it was observed that factory workers' productivity decreased over the long term.

Without scientific evidence, I would say it's a pretty good estimate for software work also.

Would society benefit if the output of that company were 25% more costly?

Let's say that the company sells a serving of food for $4, or clothing or clean water or some other neccessity of life, which would go up by 25% to account for the need of that company to feed 25% more mouths.

Suppose company A (your exemplar company) raises its prices from $4 to $5 and company B holds its price constant at $4 (and maybe works its staff 50 hours a week). Which company would you expect to be more successful in the marketplace? Which company would you expect would ultimately employ more people over time? I'd bet on company B.

Your math ignores retraining costs. A corporation of 100 employees that hires 20 more will in fact temporarily have just created extra work for the existing 100 for some time before they see a benefit from the hires.

And given normal turnover, retraining would become a higher portion of that corporation's costs permanently, resulting in permanently decreased productivity.

It forgets wasted time, too. In most situations that are not manual labor, you can't just trim 10 hours from one person's schedule, give them to someone else, and expect equivalent or better performance. In most clerical positions, time is spent accumulating knowledge, socialising, and waiting for process related bottlenecks.

No doubt about the fact that ( more employees == more inefficiency ) for the corporation. But the benefit to the 20 members of the community that have gone from zero income to working is enormous.