The Job Market of Imperfect Information

Frictional unemployment occurs because the information exchange between hiring firms and potential candidates is imperfect. In the US alone, almost one million people work in a human resources role, trying to reduce frictional unemployment. They have difficult jobs, and I have tremendous respect for them.

And yet with all of those people working on the problem, there are still some absolute rock stars in my graduating class who don't have offers yet. I couldn't help thinking that if information flowed just a little better, the world would beat a path to their door.

At first, I was really frustrated by a system that seemed to be failing them. But then I thought, if the job market had perfect information then everyone would know who the best employees were. There would be constant competition for all of them, and only the really large organizations would be able to pay their salaries. The performance power curve would become much more concentrated to a handful of huge organizations, and the opportunity for small companies would almost disappear.

Yikes. Perhaps some frictional unemployment is a good thing.

To you all rock stars out there - thank you for preventing corporations from taking over the earth. Also know that there are people who recognize you, and appreciate that you're a powerful competitive advantage; your superpowers won't be allowed to stay inactive for long.