The efficiency of the job market
I have spent a lot of time looking into jobs in different industries, and the more I look, the more I’m convinced that the job market is priced efficiently. In other words, you get what you’re paid for.
For some reason, when comparing jobs, most people focus their attention on one thing: the salary. Higher paying jobs are better than lower paying ones. This is a ridiculous presumption, yet we all make it. We are smarter than that when talking about buying something, but we have a hard time considering the variables–especially risk–when we’re receiving money (wages, investment returns, etc.). Maybe that’s because we spend more of our time and active mental energy as consumers, rather than producers?
In a given area, if we heard about person A buying a house for $100,000, and person B buying a house for $500,000, we would automatically factor in the fact that the $500,000 house is probably bigger, in a nicer neighborhood, has more amenities, is built better, or generally nicer. Not many people would automatically be jealous of person A for paying so much less for his or her house than person B.
But yet when we hear that person A makes $50,000 and person B makes $100,000, we automatically think person B to be luckier, or at least better off. We don’t consider the fact that person B may be working 60+ hour workweeks, or had to go to 4 more years of school, or bugs (begs) customers for sales, etc. I’m suggesting that, generally speaking, when all of the variables are considered, person A and person B get compensated equally.
Obviously, exceptions may exist, but I was surprised to find that not as many existed as I would have thought. Do you think the job market is priced efficiently?
(Somewhat) Similar Posts:
From the EPA: Since 1975, the fuel economy of the combined car and light truck fleet has moved through several phases: (1) a rapid increase from...The housing bubble is bursting, interest rates are falling, the stock market is a rollercoaster, oil's increasing in price. What's the best financial move? {democracy:9} ...1: Time your visits You'll generally find the cheapest gas before noon. Gas retailers at large corporate stores sets their prices at about 10 a.m. or...MYTH 1 - It's all about your MPG rating How you drive can be more important than your car's miles per gallon rating given by the...