9/14/2010

Business owners might be hesitant to fire a new employee if they found a second prospect who was more qualified. But Paul Downs argues that the issue "is really about the best allocation of scarce resources." Look at it in terms of financial capital rather than human capital, he suggests: "Suppose you deposited your money in a savings account making 5 percent interest and then found another bank that was offering twice the return. Wouldn't you move your money?"

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