I’m not here to comment on Krugman’s main point in this post, which is that there isn’t any substance to the idea that high income earners contribute something called “job creation” to the economy. But I do take issue with this:
Yet textbook economics says that in a competitive economy, the contribution any individual (or for that matter any factor of production) makes to the economy at the margin is what that individual earns — period.
As someone who often works with extremely productive people I have to respectfully disagree. They teach me when they work with me. They might make me more productive directly and so earn their higher wages, but they make me more productive IN THE FUTURE, whether they stick around or not.
And the longer they stick around, the more productive I will ultimately become.
One thought on “But They Teach, Too”
On the job training is a by-product, it has no monetary value. It is valuable to the individual that receives the training and to the economy as a whole because the worker has greater job skills in the future. The value of the ojt is monetized in the future.