Reinventing the Digital Labor Market: How Job Boards Without Trust Mechanisms Fuel Inefficiency

Online hiring platforms have become central to the U.S. labor market infrastructure, yet they lack the most fundamental feature present in nearly every other digital marketplace: user-side trust mechanisms. While economists and public policy experts have long focused on issues like wage stagnation, labor force participation, and skill mismatches, they have largely ignored how the structure of job boards actively exacerbates inefficiency.

This paper argues that the absence of feedback systems for job seekers is not merely a design flaw but a structural market failure. When platforms prioritize employer engagement without requiring reciprocal accountability to job seekers, they create perverse incentives that result in ghost jobs, scam postings, resume spam, and costly talent shortages. A functional labor market requires trust on both sides. Without it, inefficiency is not incidental—it is engineered.