Reciprocal Scarcity: A Treatise in Two Parts

This week I read an interesting if poorly-written article in the Wall Street Journal regarding workplaces providing alcohol for onsite social hours. The comments section was littered with squares wringing their hands at how unprofessional and dangerous a practice this was, but I was most struck by one Alan Maxwell:

“I keep reading unemployment is high, especially amongst less experienced/college grads. But, then I see the weekly articles on this site on “cutting edge” practices to attract workers, especially millenials (recent college grads). Which is to be believed?”

The answer is both, and frankly the fellow’s comment may be glib rhetoric but it’s lousy economics. The fact is that people can be desperately looking for jobs at the same time employers are desperately trying to hire. It’s not enough to say “there are X jobs open and Y people applying.” It needs to be understood who wants to work these jobs, who the employers want to fill them, and what the two sides are willing to give each other to make the deal work.

I’m not an economist by trade, but I know enough to understand that in a diversified white-collar economy, neither workers nor jobs are fungible commodities – some are better than others, and that reality produces bargaining asymmetries. In short, employees want to work at the best jobs (defined by pay, benefits, psychic reward, or potential for advancement) while employers want the best workers (be it the most productive, least demanding, most trustworthy, or best cultural fit).

The real mind-blower here is that those asymmetries can go in both directions simultaneously.

(Vocabulary note: A good is “fungible” if one unit of the good functions the same as another unit and they can be mutually exchanged with no loss of utility. Gasoline and stock shares are frequent examples – it doesn’t matter which gallon or lot I have, it’s all the same as long as I have the same amount.)

dilbert-fungible

The thing is, if you look like the rest of the field (where “look like” is to say have a resume and background typical of your demographic), you’re in the “presenter” role, and you have to try to get employers’ attention. You avoid mistakes that bounce people out of interviews, and hope that someone in the process liked you enough to give you the job above a bunch of other cookie-cutter candidates, because when they have more suitors than spots, they start making decisions on ever more petty criteria.

However, if you have some trait that makes you desireable for a particular niche (you have a special skill or educational experience, or maybe your family name is politically advantageous), you will be more of a selector, and employers will fight over you. Those who need someone to do, say, international tax law, or arcane circuit design, or precision welding, or to close deals that couldn’t otherwise be closed, will find themselves adapting to the applicants more than the other way around, lest they be caught entirely without someone to do essential work for their business.

I didn’t understand this when I was young and job-hunting – it was easy to think that we were all chasing the same internships and jobs and that they just had to pick those of us they liked. There was some truth to it, because most of us had next to no experience and no durable reason for them to choose us. But when I got older and started to see how real recruiters at top-flight companies were approaching the talent chase, I observed that it was an all-out war. These were not “HR ditzes,” but serious salepeople whose product was their own company and whose “leads” were future coworkers. Intense and sometimes bitter rivalries flared amongst competitors, all chasing that small patch of bumper-crop workers who could take their firms to the next level.

We saw jobs as scarce resources and did whatever it took to stand out; meanwhile, those companies themselves saw top candidates as scarce resources and did whatever it took to stand out.

The same reciprocal scarcity exists, incidentally, in college applications and recruiting. Achievement-oriented kids stuff the top colleges’ mailboxes to the tune of ten times the number of enrollees they can allow. Meanwhile the top schools viciously compete to land the best crop of top students in each incoming class. Administrators are deathly afraid of losing students to other schools because they didn’t get enough financial aid or they perceive the campus to be unfriendly to a demographic or academic interest they fancy.

Standing out is one of the key factors that’s driving this proliferation of office-comfort perks and alternative benefits at startups and small firms, including meals, free booze, massages and medical services, daycare, laundry, even financing subsidies – the payoff of those top employees is so critical to the business that they need this stuff to get them in the door and make them want to stay. The movement that has moved into the political realm as well: companies are scared to death of being perceived as unwelcoming to women or minorities or some other demographic and go to great lengths to tout and even sponsor their commitment to various flavors of openness. This is not just motivated by the typically-left-of-center politics that adorn today’s educated entrepreneurial class; it’s also a marketing strategy for recruiting, and it’s not just about recruiting those demographics. It’s about recruiting and retaining people who would say “I don’t want to work at a company where XXX aren’t welcome” or even “I don’t want to work here if I have to explain this blight to my friends.”

As for the employment lawyers wagging their fingers/salivating at the prospect of things going wrong on company premises, employers need to be responsible in bringing in employees who aren’t going to make fools of themselves. If you are hiring people of at least passable character, and you are giving them a working environment they really enjoy and can thrive in, and you set some expectations up front, you can expect that most of them won’t abuse the privilege – any more than one of them might go on a bender once they get home from work. And what you get in exchange for that is a deep level of trust and commitment on the employees’ part. It’s not just that they’ll stay at work because you’re buying them a beer, it’s that they actually want to have a drink with their colleagues, and this probably pays off in passion and creativity.

If on the other hand you are hiring the creatures of interminable excess that made Wall Street and Barbarians At The Gate resonant cultural texts, and you rationalize it by saying “we have to tolerate their workplace asshole behavior to make the numbers this quarter,” your in-office drinking parties might get out of hand, because those are the personalities you have selected for.

The fact that the startups and firms doing this tend to be small is a key factor in keeping the liability risk under control, as they can keep a pretty close eye on both individual behavior and office culture, crafting collective expectations out of the team’s natural camaraderie. This is impossible to do at a corporate level, where employers invariably start seeing workers as autonomous drones who need to be shamed and forbidden from activities that might escape the rigid controls that are the only option of the macro-manager.

As can be gleaned from the comments on the WSJ article, it’s been a big shock to baby-boomer types who grew up in the corporate economies of the 70’s and 80’s, with highly structured work weeks, constrained benefits, cafeteria lunches and strict distinctions between management and the people doing the actual company work (a white-collar, right-to-work version of the union factory). It’s curious, then, to consider how these new office structures are becoming the new company towns.

Regular readers will be chomping at the bit at this point to analogize this situation to the sexual marketplace and mating practices. Fear not – the interpersonal analysis will be discussed in the next post.

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12 Comments

Filed under original research, Uncategorized

12 responses to “Reciprocal Scarcity: A Treatise in Two Parts

  1. Pingback: Reciprocal Scarcity: A Treatise in Two Parts | Viva La Manosphere!

  2. Thanks for pointing out that economics bit. It’s hard to point out to people that “yes there are plenty of jobs if you can make yourself really useful at a valuable skill”.

    The inflationary nature of college has led to a lot of pissed-off students and well-lined pockets, as well as a dearth of high value skill.

    Top-flight talent can, and should, get concessions. Same as the best men and women can always negotiate more in their favor towards variety or resources.

  3. The Scolds' Bridle

    Ultimately, specialization is the key to prosperity, and the thing that also guarantees its eventual doom.

    It’s like intelligence. Better a 100 IQ than 80. Better 120 than 100.
    But an IQ of 170 can make a person almost non-functional.

    There is a sweet spot of specialization in the economy, and human nature practically ensures that this line will be overshot substantially.

    And as technology increases, the retraining period gets longer and longer, with less chance of success.

    Sheetrock put the plasterers out of work, but then they could always install sheetrock. Copper and steel pipe plumbers learned to install PVC and now PEX.

    But it can be too large a jump to retrain persons across technical fields requiring much higher skill levels.

    The up-front and opportunity costs associated with highly technical fields will eventually make those fields more of a lottery-style gamble than a guarantee of high income.

    By the way, Badge, you seem to be posting according to a timeline based on the Fibonacci series, although it is good to see you back.

  4. This is excellent. Looking forward to the game analysis bit.

  5. Forget about arcane tax law or top schools, if you want a $140K to $250K per year job, learn how to code. Writing Java code or Javascript has not changed since 1995 and anyone with a reasonable IQ can learn it, by themselves, in about 40 hours.

    Let me be very specific about what I mean by reasonable IQ. If you can remember the name of the newspaper this blog post referenced, you have a high enough IQ to write code.

    Forget about the university, school or highschool you went to or your age, Silicon Valley is so desperate for the skills that a reasonable person can acquire in 40 hours; the Mark Zuckerbergs, Bill Gates, Marissa Meyers and Reid Hoffman’s of the world invest millions of their own money to do what universites/colleges/high schools don’t care enough to do. Please see: http://www.code.org/

    The great tragdey of all this, is that most people are too lazy to help themselves. It’s easier to complain about top colleges or company beer socials than it is to look in the mirror, admit that you’ve put yourself exactly where you deserve to be and realize that if you’re not where you want to be, the only person responsible is the person looking back at you in the mirror.

    I love your writing and as a fellow UW graduate I enjoy your perspective. And I’m willing to bet that the same people who are willing to burn the calories to raise their value in the employment world, also successfully raise their value in the sexual marketplace, a $200K a year job helps.

  6. Tiger

    Great post, looking forward to your followup.

  7. LongLostFriend

    In addition to acquiring truly marketable skills, as ameyer32 mentions above, I have found that there are many other parallels between relationship/sex Game and the landing the jobs you want.

    In taking a page from Stephen Pollan’s excellent book Fire Your Boss, I approach jobs from a position of abundance rather than one of scarcity. Rather than “job hunt” when I am dissatisfied with my current position, I am constantly “job fishing” (courting job offers no matter how much I enjoy my present job).

    Two weeks ago, I interviewed for a decent job I had no intention of leaving my present job to accept. I was offered the position and subsequently turned them down. I have another interview tomorrow, and I most likely will remain where I am regardless of the outcome.

    Knowing that there are people who would take me should things go sour where I am places me in a much more dominant position than I would be if I were clinging to my current job for dear life.

  8. Pingback: Lightning Round – 2013/07/03 | Free Northerner

  9. Scolds Bridle,

    “But it can be too large a jump to retrain persons across technical fields requiring much higher skill levels.”

    There’s always a kink in skill work somewhere, and it’s not always about the technology per se but sometimes is about the mindset joined with the technology – in computers for example, the jump from C/C++ to Java is trivial; however the jump from writing say machine-control code to writing graphical user interfaces is huge.

    An analogy might be the switch from big-band jazz to bebop: a totally different aesthetic using a different instrumental arrangement.

    Becoming skilled in something of value is a huge boost in today’s economy but might leave one obsolete when the music changes and new paradigms emerge. Whether you work in a knowledge field or a skilled-labor field, it’s essential to diversify and keep training. And you have to know how to market yourself so people know you are keeping current. Here’s a great post on marketing for engineers:

    http://www.codinghorror.com/blog/2008/10/the-one-thing-every-software-engineer-should-know.html

    “If there was one thing I could teach every engineer, it would be how to market.”

    A large part of the style of game I try to teach young men is how to market themselves as men, as social goods, to the world (obvs to women in particular).

  10. LongLostFriend,

    That’s a brilliant strategy, one that more people should do. I actually got a phone call yesterday from an old friend who was doing exactly that – happy in his current position, he applied for a job he doesn’t think he’d take but wants to make sure. Obviously he couldn’t list anybody he works with as a reference so he put me down.

    A mentor once told me, “don’t turn down a job you haven’t been offered” which was his way of saying be an active job-hunter at all times.

    The job I am in now is one that I didn’t really intend to take when I interviewed. Only after I got the offer did I seriously start to think it might be a good move, and I did it and it was absolutely the right choice.

  11. The Scolds' Bridle

    LongLostFriend-

    Isn’t that job hypergamy? You’re keeping those poor employer orbiters in terrible suspense. Are you letting them buy you dinner too?

    Oh, the shame…

  12. Master Dogen

    This is a good post, but that Dilbert cartoon is awful. If the man gets a more fuel-efficient car, the total world-demand for oil goes down by a tiny but real amount. The oil “saved” would indeed get bought by someone else, but the overall price will decline by whatever infinitesimal fraction caused by the buying of the fuel-efficient car, thus achieving the man’s original goal of trying to take away his support from a system that was “funding terrorists.” The one who doesn’t understand what “fungible” means is the dog and the author of the cartoon. In his attempt to come across as all smart, he completely misstated and misunderstood his own central point!

    Although I think Priuses are gay and a waste of time, it is *precisely* the fungible nature of petroleum that makes driving them a technically defensible thing to do, if the driver’s aim is to reduce world oil demand, by whatever tiny amount.

    /end rant

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