Let's say I'm a good neighbor and I take your trash to the curb. I decide to stop, you now have to take out your own trash or pay someone. That change brings a real cost to you, but it is not my externality.
If I put my trash in your bin, that would be an externality.
Not employing someone is neutral.
Laid off workers and the state are not harmed by the company that stops sending paychecks.
