Working for the Money

Fishing is dangerous.

Photo by ROSLAN RAHMAN/AFP/Getty Images

Matt Bruenig is a little puzzled by the way hiring works for fancy jobs:

And again:

I don’t think this has much to do with vulgarity. It has to do with bosses trying to get a good deal on workers. If you look at jobs that don’t typically go to people with fancy degrees, what you’ll often find is that dangerous or otherwise unpleasant work (commercial fishing, garbage collection) pays better than your average retail job. That’s a “compensating differential.” If commercial fishing paid Taco Bell wages, people would just work at Taco Bell where the job is much less likely to kill you.

At the high end of the labor market, you get the opposite effect. People are willing to trade off salary in order to do a job that they find pleasant. I really like blogging, and I gather than philosophy professors generally enjoy researching and teaching about philosophy. But if you threw me into a “publish or perish” tenure track academic philosophy job, I would be miserable and if you took a promising young academic out of the tenure track and told him to write a half dozen short items a day and spend a lot of time thinking about Search Engine Optimization and content shareability he’d be miserable.

If you’re an employer, that’s a dynamic you want to exploit. You want to hire people who you can get away with paying a negative compensating differential because they have an idiosyncratic love of the particular job. This basic phenomenon where people would like to find jobs they find relatively enjoyable and employers would like to take advantage of that desire is all around us, but unduly neglected in economics. But this is what interviewers are driving at. They want to get a good deal on a worker. And you do that by finding workers who would prefer your job to some other job even if the money was equal.