Comparative Advantage and Job-Hunting

1 The concept of comparative advantage is not just an abstraction. Nor is it

applicable only to entire national economies. A job-hunter would do well to
recognize his or her personal comparative advantages and use this
recognition both to choose the best jobs to apply for and to stand out
among other job-seekers. The savvy person looking for a job will look at the
galaxy of employment possibilities through the lens of global economics.
2 Perhaps the clearest focus provided by comparative advantage theory is
on the phenomenon of opportunity cost (OC). If a job- hunter spends time
applying for jobs that do not suit him or her very well, an OC is incurred.
He or she cannot spend that time applying for more appropriate positions.
The costs might not be the OC of applying for it would increase. measured
in money (unless you assign a certain dollar value to an applicant's time)
but could be quantified in terms of some other unit you might invent to
measure success or satisfaction, some sort of "fruitfulness factor." Potential
employment that has a high fruitfulness factor, that is, a strong chance of
being offered to a candidate and a strong chance of being accepted, is far
better for a job-seeker to pursue than employment with a low fruitfulness
factor. Such a job would be unlikely to be offered or unlikely to be accepted,
or both. So a candidate would incur higher OC by spending time applying
for low-fruitfulness positions rather than jobs that are better suited to him
or her.
3 Of course, in calling a position "better suited" and assigning a fruitfulness
factor, we have to consider a number of attributes, most of which are only
indirectly about money. Some relate to the likelihood that an offer will be
made. Others relate to the likelihood that an offer will be accepted. The job-
seeker's skills and experience are the main criteria for appropriateness to
the stated requirements of the job-a given level of education or training, an
ability to do certain tasks, prior work on. The candidate presents such
qualifications, and in return the prospective employer assigns a certain
salary to the position (plus a package of other money-related benefits, such
as health insurance). But other factors also figure into the calculus, such as
location, corporate culture, the character of one's fellow workers, and
innumerable other features of the job. Without such nonmonetary
enticements, the position's fruitfulness factor would decrease, and the OC
of applying for it would increase.
4 The lessons of comparative advantage theory extend beyond the realm of
the job search. There is also the matter of the worker's own comparative
advantages in terms of skills, a calculus that looks very much like what
economists do in figuring a nation's comparative advantage. Imagine
someone looking for web-development work in a job market where many
applicants are competing for every available position. Our web developer is
good at coding in Java and C++, and she has two years of web-development
experience. Not bad, but nearly every other job-seeker in that field can say
the same. It is best for her to avoid competing for jobs based on those skills
alone even though she may feel that she's better than most competitors. By
analyzing her comparative advantages rather than absolute skills, she might
recognize that she has other, less common talents she wants to leverage,
something like proficiency in Spanish or a sophisticated knowledge of film
production. If there are employers that value those characteristics-and if
there are, she is quite likely to enjoy working there-she stands above the
crowd.
5 A corollary of the theory of competitive advantage is the principle that
some things are worth doing and others are worth trading for. In fact,
David Ricardo's first exposition of the theory (1817) involved the question
of which product(s) Britain and Portugal should produce and which they
should trade for-wine, cloth, both, or neither. Ricardo concluded that even
if a country-he postulated Portugal-were more efficient at producing both,
it made economic sense for it to concentrate on the product where its
advantage is greatest (wine, in Ricardo's example) and to buy the other
product from elsewhere. A job- seeker has to recognize that a full
exploitation of comparative advantage in the search for employment
involves analogous judgments.
6 Some of these judgments are obvious. In almost no case is it to a job-
seeker's advantage to cut his or her own hair or sew clothes for the
interview. However, the principle is helpful in less obvious cases as well.
Should the job-seeker compose his or her own résumé? Most do, and many
of them do well enough that the time spent in this writing has a low OC-that
is, it is a sufficiently profitable use of time that they should not pay
someone else to write résumés for them. However, a job-seeker may
recognize that résumé writing is not the sharpest of his or her skills. It may
be worth the person's time to trade out that task-to hire one of the many
professional résumé-writing companies-while concentrating time and effort
on some higher-return task, like researching the histories of prospective
employers or watching videos about how to behave in job interviews.

Multiple Choice Questions:

1. What is the main lesson that a job seeker can learn from
comparative advantage theory?
A. How to maximize income
B. How to choose the best jobs to apply for
C. How to negotiate better salaries
D. How to work more efficiently
2. What is the primary standard for suitability to the specified
requirements of a job, according to the text?
A. The candidate's education level
B. The candidate's previous work experience
C. The candidate's ability to perform certain tasks
D. All of the above
3. Which of the following is an example of a comparative
advantage in job-hunting?
A. Having experience in Java and C++
B. Being fluent in Spanish
C. Having a degree in web-development
D. Knowing how to write a resume
4. According to the theory of competitive advantage, what should
a country do when it is more efficient at producing both products
in a trade relationship?
A. Produce both products
B. Produce the product with the lowest cost
C. Pay close attention to the product where its benefits are highest
D. Trade with a different country
5. According to the text, when might it be worth a job-seeker's
time to hire a professional resume writer?
A. When the job-seeker is skilled at resume writing
B. When the job-seeker has a low opportunity cost for time spent writing
resumes
C. When the job-seeker recognizes that resume writing is not their
strongest skill
D. When the job-seeker wants to save money

True/False/Not Given:

6. Comparative advantage theory only applies to national economies.

7. The opportunity cost of applying for jobs that are not a good fit is not
always monetary.
8. Portugal is considered as a country produces cloth effectively in the
area.
9. Web development experience is a common skill among job-seekers in
the field.
10. According to the theory of competitive advantage, it is best for a
country to produce both products in a trade relationship.

Fill in the Blank Questions: No more than two words

11. If a job seeker wastes time looking for positions that are not a good
fit, an ……………………..is paid.
12. The principle of comparative advantage involves the idea that some
things are worth doing and others are worth……………………. for.
13. A job seeker may be aware that creating resumes is not one of his or
her……………………… competencies.