Myths and legends of the market
The JC’s guide to the foundational mythology of the markets.™
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employment derivatives
(n.)
A financial asset class developed in the early part of this millennium by derivatives pioneer and potboiler Hunter Barkley.
They would be like interest rate swaps. A bunch of large employers would submit, daily, how much they would be prepared to pay to hire established categories of worker, to derive some kind of London Inter-Employer Bid-Offer Rate (can we call this LIEBOR?). Then the British Human Capital Managers Association would compile and publish a list of rates. Employer could swap out their fixed costs for a floating rate, thereby hedging employment costs. Employees could do the same, hedging against their intrinsic loyalty discount, and restricting employee moves to genuine changes in role, or idiosyncratic hatred of boss, rather than just the need to rebenchmark periodically.
Lest you should think I am joking consider the cost of employment in a large financial services institution might be in the multiple billions.
