84. What is a job?

A job simply comes into existence when one person gets another person to deliver value to him (build a wall, look after his child, cook a meal or whatever)in exchange for another value (normally in the form of a money payment). Why does the person hire another to do something; why not do the job oneself and save the money? It has to do with opportunity cost. Let me explain: I buy bread at the shop - it costs me say R 12. Why did I not bake it myself? Let us say it would have taken me an hour to bake a bread and let us say I could have earned R 100 in that hour. The opportunity cost of me spending an hour baking bread is R 100 (the money that I could have earned in stead of baking the bread). By buying the bread I have a bread and R 88; if I bake the bread myself I will just have the bread (and that is excluding the costs of the ingredients - just my time. The same principle is true when I purchase your labor - it is my interest to do so for as long as your cost is less than my opportunity cost of the alternative action that I will by performing in that time. Even if that alternative use is reading the newspaper while you mow my lawn. I must however value the reading more than what you cost me. If you charge too much the job disappears and I do it myself. A job is where the value created by an employee is greater than what an employer values the money that he will be paying you. You on the other hand value the money more than the time and effort you spend on the lob. it is a win-win situation for both parties. If you value drinking beer higher than the money the job also does not come into existence for you. Someone else with a different set of values may be mowing the lawn.