Fixing an Imperfect Labor Market Information System

摘要

Adam Smith explained that market economies operate through an "invisible hand," but what was that hand? In 1945 Friedrich Hayek argued that a market is an information system, and the challenge facing economies is to efficiently allocate resources and goods through societies with millions of participants, both people and firms, where each has only partial information According to Hayek, market pricing is "a mechanism for communicating information." Markets work, then, through the aggregation and transmission of information among the participants, and the better the underlying information, the sounder the market. Hayek maintained that markets with good information systems could be far more efficient than, for example, groups of central planners who inevitably have only partial information. The United States has the most decentralized workforce management of any developed nation. Its labor market is highly individualized and localized, and thus fragmented with relatively few information connections among participants. On the supply side, younger workers face difficult education decisions, especially at ages 17 or 18, that will largely determine their work futures; yet they act with limited understanding about their options and the implications of their choices. Displaced workers are in a worse box; they lack the tools to understand job opening, education, and training options. And managers are increasingly frustrated in their ability to hire and retain the talent they need.