top | item 8414803

(no title)

QuantumChaos | 11 years ago

Labor markets are inefficient, that's the primary reason the field of "Labor Econoimcs" exists.

However, these inefficiencies do not explain why Facebook bus drivers make so little. Classical economics is sufficient for that.

You cannot simply point to frictions as a get-out-of-jail-free card from classical economics.

discuss

order

rtpg|11 years ago

Likewise, you cannot simply hand wave away prerequisites if they're big enough. The friction here is enormous (the cost to move to another city can be extremely large).

QuantumChaos|11 years ago

The argument was that people should move to a cheaper city if being a Facebook bus driver can't support them.

But that doesn't imply that Facebook is forcing people to move cities. Facebook isn't altering the labor market by employing drivers at market rates.

I hope you'll agree that the frictions from moving arise from changes in cost of living (or in the labor market, which doesn't appear to be changing). If the change in the housing market is gradual enough, the frictions need not be very significant, since they are amortized over a longer period of time.

DannyBee|11 years ago

"the cost to move to another city can be extremely large"

In what sense? Monetarily, i don't believe you. Emotionally, sure.