Wednesday, September 23, 2009
high quality, high paying jobs
I've been thinking that the goal of "high quality, high paying jobs" is a bit of a catch-22. Of course, all things being equal, we prefer them. But they also assume a static world and, if endowment effects and similar are significant, there are real downsides. I'm thinking that those are the same jobs which involve significant personal investment and have high specificity of skills (i.e., they are high paying because the employees are not easily replaced). While the industry is healthy, this is great. If the industry shrinks (whether because of something specific to the industry or macro), the displaced worker almost certainly cannot replicate his or her prior income in the near term. Which is painful. Especially if he or she took on liabilities on the assumption that the income would be there. We can't stop people seeking these jobs (and I don't think we want to) but it does suggest that economies with lots of lower skilled jobs will have (assuming away regulations that limit labor flexibility) a leg up on those that depend more on high skilled jobs. Of course, this is probably part of the natural order of things.