Tag: human capital

Labor · Saul

Opportunity Cost of Interviewing

Jadrian WootenLeave a comment

Jimmy is invited for an interview regarding a copier salesman position with Neff Copiers. During the interview, it is noted that Jimmy’s resumé shows his previous but recent employment as a lawyer and the interviewers are curious why he would want to switch into sales. From their standpoint, going from a legal career into copiers’ sales seems like a demotion.

Upon making his case, Jimmy takes the chance to analyze his decision from a cost-benefit analysis standpoint. He admits that he doesn’t have traditional sales experience, which would definitely be a significant cost to Neff copiers, if he gets employed by them. The tradeoff is that his skills as a lawyer are transferable to a sales job because it still involves “selling” to different people. His argument is essentially that the skills he gained as a lawyer are general, human capital, which can be transferred to a more traditional sales role.

Before leaving, he decides to come back and make his case using the foundational economic concept of opportunity cost. While they wait to interview more candidates, they are giving up that opportunity to see if he can really do it. When hiring candidates, there are a variety of quasi-fixed costs, and many students don’t recognize that the cost of hiring a worker goes beyond their wage. The second half of this scene provides and excellent chance to explore the opportunity cost of not only the missing salesman, but also the two managers who could be doing other things with their time. Jimmy’s story about his experience with copiers is an attempt to make the opportunity cost of waiting seem more real to the two managers.

Once Jimmy gets the job he highlights how dumb the two are because they know nothing about him. He argues that there they haven’t done their due diligence in hiring because he could be a crazy person. This level of asymmetric information in labor markets is why the search process can take longer than traditional competitive models suggest.

Looking to emphasize jus the human capital aspect and transferability of skills? Check out the clip that includes only the beginning of this scene.

See more: Asymmetric information, Better Call Saul, cost benefit analysis, general human capital, hiring costs, human capital, interviewing, labor, opportunity cost, search costs, skill transferability, specific human capital

Labor · Saul

General Human Capital from a Legal Career

Jadrian WootenLeave a comment

Jimmy is invited for an interview regarding a copier salesman position with Neff Copiers. During the interview, they not that Jimmy’s resume shows his previous employment as a lawyer until shortly before the interview and they are curious why he would make such a drastic change. From their standpoint, it seems like a demotion to go from a legal career to a sales job.

Jimmy takes a chance to analyze his decision from a cost-benefit analysis standpoint. He admits that he doesn’t have traditional sales, which would definitely be a cost of hiring him. The tradeoff is that his skills as a lawyer are transferable to a sales job because it still involves “selling” to different people. His argument is essentially that the skills he gained as a lawyer are general human capital and can be transferred to a more traditional sales role.

This scene is the shorter version of a longer scene, which includes Jimmy arguing in favor of his employment from an opportunity cost perspective. If you have the time, check out that clip!

See more: Better Call Saul, cost benefit analysis, general human capital, human capital, interviewing, labor, skill transferability, specific human capital

Labor · Saul

General and Specific Human Capital for a Paralegal

Jadrian WootenLeave a comment

Jimmy and Kim are looking for a paralegal for their new firm, but they both have very different needs. Jimmy is in a rush to get through the interview because he has a commercial airing later and the phones will be busy. During the interview, they ask some different screening questions to see if the applicant is qualified. During the interview, Kim asks why the candidate wants to leave her government job with good benefits for a paralegal job. She notes a variety of unpleasant conditions of working with the DMV, notably the bureaucracy.

People are willing to accept lower levels of compensation if the working conditions are more pleasant. This scene is a good example to use when discussing compensating differentials. Workers are not only income maximizers but instead care about the non-pecuniary aspects of employment. Another component of the interview was the identify particular skills she may possess, either general or specific. While the candidate isn’t familiar with specific training associated with being a paralegal, she highlights some of the general human capital that she believes would aid her in her new role. These include patient and attention to detail, as well as interacting with elderly clients. She also notes that she has experience with Microsoft Word and Excel.

See more: Better Call Saul, compensating differential, general human capital, human capital, interviewing, labor, skill transferability, specific human capital

Inequality · Jesse · Macroeconomics · Walter

Cost of Getting Even

Jadrian Wooten

The scene brings forward a discussion between Jesse and Walter. Their dialogue is centered on how their competitors choose to protect their turf and the shooting of their partner Combo, for which Jesse seeks revenge. The scenes within are particularly useful for discussing the importance of property rights delivered by a functioning legal system and the consequences brought about by the impossibility of enforcement, for instance, in the black markets for drugs. For example, when Combo sells “blue” methamphetamine in the competitors’ turf he ends up being killed by an 11- year old boy. The rival gang seizes and sells the “blue” methamphetamine, distributed by Combo and cooked by Walter and Jesse, as their own. Outside of black markets, courts or specialized branches of the police would have handled such disputes. However, when the rule of law and property rights are absent, vaguely defined, or not enforceable, agents resort to other means of enforcement such as violence, which breeds more violence – Jesse is obviously seeking revenge for Combo’s death.

The clip is also useful for illustrating the socio-economic costs and the unintended consequences of illegal drugs and the black markets that form in response. The loss of life and the use of children, often from poor neighborhoods and low-income families, as labor are obvious. A discussion about social mobility and human capital development may also originate within these scenes. In broad terms, children who end up dealing drugs and protecting turfs fail to accumulate the much-needed human capital, which should allow them to fare better than their parents. The scenes within may also be used to discuss how failure to accumulate human capital or make meaningful investments in tomorrow’s labor force diminishes a jurisdiction’s ability to produce goods and services, or, in other words, shifts that jurisdiction’s production possibility frontier inward.

This description comes from Duncan, Muchiri, and Paraschiv (Forthcoming)

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Jesse · Labor · Mike

Squatters

Jadrian WootenLeave a comment

Mike and Jesse need to get in touch with a dubious individual, who currently lives in a blocked off house. Mike’s plan is to wait until the person comes out of the house on his own. However, Jesse thinks he can speed up the process. After he fails to talk the person out of the house, he starts digging a hole in the front yard. Very soon after, the individual comes out and asks Jesse if he can continue digging instead. This account emphasizes that Jesse has skills that Mike does not, and, therefore, he can contribute to the success of the daily operations.

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Jesse · Labor · Macroeconomics · Unemployment

Getting a Job

Jadrian Wooten

This clip shows Jesse interviewing for, what he thinks it is, a standard sales position. However, he soon finds out that he is in for a sign-twirler job. Nevertheless, the employer would have considered Jesse for the sales position if he possessed the required skills (i.e., a sales license, two-year and on-the-job sales experience, and a college degree). Even though Jesse has significant (on the street) sales experience, he is not qualified for the standard sales position he thought he applied for. Since Jesse lacks the prerequisite skills, he must continue to be frictionally unemployed (until he can find a suitable position).

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