Friday, January 20, 2006

Economic Rent

A friend here in the UAE hired a low income expat to walk her dog while she is at work. A kind-hearted person, she paid him much more than the going rate.

Recently a stranger appeared at her door and announced (with hand gestures and broken English) that her dog walker had left the country and assigned the job to him. This job transfer occured without consulting her! The new man even had the key to her apartment.

I suspect that the original dog walker capitalized the wage premium by selling his job to the new dog walker. In effect the new dog walker is earning the market wage, not the premium wage my friend wanted to pay.

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1 Comments:

Blogger PizzaQueen said...

Well it doesn't change much on your friend side : she paid for a service she will get.
It is something very common in Italy specially within the filipino comunity : in case one gets sick or has problems they automaticly send another.

12:50 PM  

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