The Economics behind Job searching

 This blog post is inspired by my macroeconomics class, where we’ve been discussing models that show our job search model. Most recently we’ve been analyzing the McCall Model, bathtub model and soon the DMP model. Essentially the McMall Model shows the cost of accepting a job offer and the benefit of not accepting a job offer. It gives us a very simple framework to understand why people may not accept a job offer. With this framework we are viewing preferences as a choice, where one wants to maximize income and thus will make decisions accordingly. 

However, this model doesn’t capture certain flaws that Sen pointed out. It doesn’t show why there may be some outliers who have a very low “reservation wage” which is the minimum wage one will work for. As Sen noted, there are some people who are in a disadvantaged position and live in poor circumstances, as a result their reservation wage may be very low. This means their standard of living may be very poor, and there is no way to capture this issue of low wages using this model. This point connects to Sen’s next point about capabilities. Since people’s low reservation wage may be determined by their living situation, lack of education, or another factor, they may have poor living conditions. With that, they will be receiving extremely low income and have limited means to live the kind of life they value. I will just put a few critiques to show the errors of this model through Sen’s perspective. 

Now, I will pivot to discuss what actually determines one’s decision to accept a job offer. In most cases there are certain jobs that the majority of people, depending on their living conditions, will rule out. These jobs include directly illegal jobs, these types of jobs do not include one’s where people do illegal acts within that job. Instead, these illegal jobs are one’s where just being involved in that occupation puts you at risk for being found breaking the law. Using the principle of expected utility, assuming your maximizing income, one may find working these types of jobs to be rational. Since these jobs may lead to high levels of income, with very small punishment, the marginal benefit of choosing this job is higher than the marginal cost. Obviously many people, not all, would find this to be irrational. Using Anderson's priority of identity to rational principle, one would see that working this illegal job is not good for the membership of people in that society. By that, not every person in society would want this person to work in this illegal society as it may be harmful, or have other negative effects. Thus, it’s not universalizable to the membership, and in that sense would be considered irrational. 

However, it becomes more complicated when you get into issues of jobs being “morally bad” jobs but not necessarily illegal. It especially becomes more complicated when these jobs are associated with extremely high wages. In that, one would have the means to do a lot of different activities, however it will be at a cost. Whether that cost is deceiving the public, hurting the environment, or outsourcing to countries with unsafe labor conditions, it will ultimately hurt a person or humanity as a whole. Anderson states for rational choice theory that “[t]he only sort of individual that everyone can be is one who identifies with multiple collective agencies as well as with humanity as a whole, and who therefore accepts multiple commitments, not grounded in individual preferences, as reasons for action.” Therefore would Anderson argue that since these reasons for actions are not based on someone who identifies with multiple collective agencies and humanity as a whole, this person should not be working in jobs that are ethically wrong?