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ISSUE 116 VOL 5 PUBLISHED 10/11/2002

Jobs bring financial considerations

By Anonymous
Contributing Writer

Friday, October 11, 2002

Some things in life cannot be assigned a price. Things like memories, vacations from work, taking a cut in pay to accept a dream job are what we call "priceless," because we value them no matter what the opportunity costs associated with choosing them may be. On the other hand, some things that have been assigned a price by the market, but the price assigned may not be representative of the true bottom line cost. The job market is a perfect example of this phenomenon. One example can be found while searching for a job. A reputable corporation such as ADC, Corp., located in the cities may offer a starting pay of $20/hour full time. The job is ideal for its great reputation, but sometimes, a love for discount clothing shopping lures people into a job in retail such as Marshall Fields, where some figure they can earn a modest income and receive a discount on all purchases. A common misconception is that this will help save a great deal of money, since some people are always spending money on new clothes. But of course, there is a catch. This is the part that often gets forgotten about: when someone takes a retail job instead of the office job, they may very well be forgoing more money than they are saving on the clothing discounts. An economist would tell them that the opportunity cost – the cost of the forgone alternative – of taking the Marshall Fields job over the job at ADC, Corp. is equal to the difference in salary between the two jobs less the total dollars to be saved by the discount on clothes that would be purchased regardless of where they work. Many people may find themselves a little too familiar with this situation, and can relate to the difficult decision-making involved in choosing between alternatives. If ever faced with such a situation, remember that there are two sides to the coin, financial advantages, and non-financial rewards. Certain questions can help perspective employees to put a price tag on a job offer. Is the office located in the cities, where one would have to pay for parking every day? How much does parking cost? How far is the commute? How much would gasoline cost per week? Are there enough hours available to work? Retail jobs may not offer as many hours to full time employees as a corporation that runs from 8 a.m. to 5 p.m. Fewer hours worked usually means less income earned. There are also the "priceless" considerations to think about. If one job is considerably more fulfilling and enjoyable, one may decide that the extra income forgone is worth the added enjoyment for working the job they love. Another factor to consider is work-related stress. Does one alternative involve a higher level of stress than the other? If so, the stress may lead one to seek out a new job shortly after one starts, or even cause health problems and/or a shortened life span. Some look to have weekends off and less work during the weekdays, while others prefer to spread hours more evenly throughout the week. Corporate offices are usually only open Monday thru Friday, whereas retail stores are open every day. One job may also be more flexible than another. Creating a list of important objectives can aid in seeking out the perfect job. The price tag is only the starting point of decision-making analysis.

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