
They are smaller after the rearranging of the pieces. The total area missing is that one extra block he took out.
Something along those lines anyway
( , Tue 1 Oct 2013, 11:51, Reply)

Our eye finds it hard to spot that kind of small difference in a regular pattern, especially when it's broken up along a line.
There are other similar cut-and-rearrange paradoxes that break the missing square into a long thin diamond shape as well, but this one is particularly neat.
( , Tue 1 Oct 2013, 12:24, Reply)