One of the most common topics people complain about is the amount of money they are earning. Many people think they just aren’t earning enough money. They usually share this revelation after complaining about the fast-rising prices of goods and services. They then launch into how they can’t make ends meet because they can’t earn enough money.
If you are dealing with a particularly negative person, their complaints of low pay will then be followed up by complaints about their boss and the evils rich corporations cause.
The sad truth is that everyone is getting exactly the amount of money they deserve. That’s how the job market works. People are paid based on what they deserve. This might come as a shock to you – especially if you think you should be making more.Â But the truth is, the market can’t afford to pay people too little or too much.
If people are paid too little, they will be hired away by competing employers who are willing to pay them what they are worth. If they are getting paid too much, the company they work for might get into all sorts of financial trouble and they will end up getting paid what they deserve when they switch to another company. So how exactly does the labor market determine how much a person deserves to earn? One word: productivity.
Productivity is one word you won’t hear from people who make it a habit to complain about how little they are earning. For these people, the amount they are earning has less to do with productivity and more to do with the fact that life is unfair.
However, if you look at productivity levels and how they are tied up to wages, you would probably walk away with the conclusion that there is nothing unfair about paying low wages for low productivity.
The bottom line is that a person can only produce up to a certain amount of value every day. If an employer were to pay the worker more than the worker’s productivity, the employer will be running a loss since the value of the worker’s work is lower than the amount being paid to him or her.
If, on the other hand, the worker is producing more than he or she is getting paid, it would be to the employer’s advantage to pay that worker moreÂ or else he or she might get recruited by a competitor. The key is productivity. It establishes our price tags as employees. So if you want to increase your price, you need to boost your productivity. The higher your productivity, the more indispensable you get, the more you earn.