Are All Jobs Commodities ?

The other day an IT professional in charge of staffing for his company said to me, "All labor is a commodity, including the CEO".  "Including the labor of doing your job?", I asked.  "Absolutely, of course", he said.  A lot of IT jobs have become commodities and work is moving offshore.  It got me thinking, what is a commodity in the labor market?  How do you avoid competing in a commodity market ?

A job is a commodity when enough people can do it good enough that employers choose the lowest cost laborer.   The key here is good enough.  Performing a job better than the competition doesn’t matter when better means more than good enough.  Are all jobs commodities ?  No, take the CEO as an example.  CEO pay keeps going up.  The worse CEO’s do, the faster their pay goes up (as a group).  Instead of complaining about CEO pay, assume it is rational and ask why are compensation committees willing to pay.  It is because the job is getting harder, and fewer are capable or willing to do it.  The lesson is clear.  Try to work on the hardest most consequential problems you can find.

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