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In a good market, only more desperate candidates will go with non-compete positions. So lower salary argument makes sense
by JS1984 13y ago
In a good market, only more desperate candidates will go with non-compete positions. So lower salary argument makes sense
- stephencanon 13y agoNo; in a good market the employer who wants a non-compete would need to pay me up front for the time period that I wouldn’t be able to work after leaving her firm, plus a premium for the expected difference between my salary at that point and my salary at hiring, which would make the wage for positions with a non-compete significantly higher than those without.
- dredmorbius 13y agoYou're making the error of deducing market conditions from price (or price from market conditions). Market price is determined (in a well-functioning market) by the intersection of supply and demand. So the salary could go other way: higher, if a non-compete makes it harder for the employer to find employees willing to sign the clause, lower, if result is fewer alternatives and/or more desperate employees interested in the position. I'd actually argue the second: that noncompetes raise employees' switching costs, and reduce their alternatives, so that a state in which noncompetes are valid and widely applied would tend to have depressed labor rates.