Job Search Advice, 5/4
In a 2011 paper Arnold Kling introduces a more complex model that expands the simple job matching model, which he calls Patterns of Sustainable Specialization and Trade. The basic idea is that before the job matching process can even begin, employees need to figure out what jobs they need, and workers need to figure out what skills they need (these are the “patterns of specialization”). If there is a mismatch then there will inherently be unemployment, regardless of how much work is spent on job matching or stimulus. It can take time to create new patterns, and because these need to be sustainable, taking short-term actions to address it (for example, stimulus) will be ineffective.
This model predicts that increasing productivity might increase unemployment (contrary to traditional models), if that increase is not uniform. This seems to explain the post-Internet unemployment increase we see in the chart above. What happens is that increasing productivity in one sector means fewer jobs are needed, but because it takes time to figure out what new jobs arise from that, in the short run there is increased unemployment.
The set of opportunities that officially exist within a company are not necessarily the optimal set that should exist. There are always new areas to explore and new technologies to discover. It might be that the best role for a given employee doesn’t exist yet, and needs to be created. This might mean a different project, team, or job responsibility for that person, but a company can be more successful by allowing this flexibility. As an employee you should be thinking about this while working–what job do you see as your comparative advantage? Does it exist already? If not, can you make an argument that it should?
Broune’s new substack looks interesting.
Note Kevin Kelly’s succinct advice:
Don’t ever work for someone you don’t want to become.
My most succinct advice is: Work for a profit.
Young people assign high status to non-profits and low status to profit-seeking firms. The should do the opposite.
Profit-seeking firms are generally more sociotropic (the opposite of sociopathic) in two senses.
Externally, a profit means that the value of what you provide to consumers exceeds the cost of the inputs that you use to provide it. Almost by definition, profits indicate social betterment.
Internally, profit-seeking provides an incentive for employees to be treated well. The business needs to satisfy customers. In order to do that, it needs employees to be well trained, well supported, and well led. When employees are empowered to succeed, customers are satisfied. The businesses that thrive are those that encourage employee success.
A non-profit does not need to please customers. It only needs to please donors. This involves putting on good shows: powerpoint presentations; award ceremonies; annual reports. This gamesmanship permeates the organization. You get ahead by looking good to the manager above you, not by bringing out the best in the staff below you.
When you take a job, you want your boss and the employees around you to be aligned with your interests. You want to learn and develop. You want to be given opportunities to succeed in challenging situations. You don’t want to be set up to fail or stabbed in the back.
In short, you want to work in a sociotropic environment, not a sociopathic one. Profit-seeking firms are under more pressure to filter out the sociopaths. If you take a job at a non-profit and discover that your boss is a sociopath, don’t say I didn’t warn you.
@Arnold, did you find that the profit motive at Freddie Mac made them much more customer oriented than the Fed? My experience at very large profit seeking institutions is that many workers end up shielded from customers and markets, leading to behavior that is like that of workers the non-profit sector. Yes, senior managers have that focus and line employees might too, but lots of folks don't.
My career advice is to pick a job you enjoy from the set of jobs that provides enough money, reasonable enough working hours, and in a location with a short commute to have stable home and raise a family. It won't do to hate your job for 40 years. It won't do to make so little that you can't live a decent life. It won't do to spend your whole life in traffic. If, after that, you have remaining degrees of freedom to optimize further, at that point I would worry about managerial quality, profit motivated institutions, and what human capital to develop to further your career.
I agree with the overall idea of PSST, but my experience and the larger forces at work have indicated the opposite with respect to employment.
There's a lot more going on than "status".
More concretely, there's risk-aversion and long-term profit maximization. In a purely private sector job, I may make a higher salary, but I'm much more likely to have insecurity in my job. In the private sector, it's my experience that even when people are individually doing a "good job" they can lose their jobs. That's a significant cost.
At a societal level, it always seems to me that there should be a better possible tradeoff between "government job with almost complete security and stability" and "market job with utter insecurity and stability".
The current status quo heavily skews the talented but risk averse into government and education, where, frankly, most talents are wasted.
Market firms, on the other hand, make better use of talents, but the pressure and threat of being fired or simply having to uproot your family and move or change jobs is orders of magnitude higher, and that's something that a lot of people rightly shy away from.
I don't know that this is a market failure, per se. It's systemic, but it is a failure that's over time leading to bigger divergences and hence, bigger problems.