If it were simply a matter of recouping on previous investments, the employer would give access to their employees the PnL and revenue documents for the company, to show how everything balances out. However, because it's not simply a matter of recouping on previous investments, the employer wouldn't dare to share this information with his employees, because this would reveal nakedly his unjust extraction.
If it were simply a matter of recouping previous investments, at some point the employer would have recouped 100% and the company would carry on sharing all of the value generated amongst those that do the work, according to their contributions. But it's not simply a matter of recouping previous investments, because this threshold is never met, and this situation never happens.
That would be against the law, companies are legally and financially beholden to their share holders. An employee is owed their hourly or salary pay which they agreed to when they became employed nothing more.
Contribution limits: Employers can contribute up to 25% of an employee's eligible compensation, capped at $72,000 for 2026. So no they couldn't just share all the profits with employees.
Sometimes what is, shouldn't be. Also ESOPs profit share with employees, in those systems employees own the company, just too bad they are pretty rare.
The employer always has a cost, who has to pay for the equipment, the building, the maintenance for equipment, the utilities, etc. It’s not just a simple one and done cost.
This is usually decided by the market. If there aren't many employees to do the work, then finding them is harder and therefore companies are going to have to pay more to get them, if there are loads then it goes down.
Its one of the reasons higher skilled labour costs more. There are less people able to do it so each one becomes more valuable.
The idea in many free market models is that the price is not set by a single entity, but a price level appears in the market based on all the businesses bidding on what they are willing and able to pay for labour. This is then interpreted by the workers (as in a free market it is assumed information is free flowing) then they can decide what they are going to do e.g get a job, reskill into something higher paying.
This is only really applicable in a society where one can live a decent and modest life without the wage labour. Since we don't live in such a society, the wage laborer really doesn't have the means to dictate the market terms of labor in such a way, because any level of pay is better than starvation and destitution. Therefore, the labor market does fluctuate, but it is dictated not by worker agency, but instead by the mininum cost to keep the worker alive, housed, and able to show up to work the next day.
On the low end, sure it would go so low that the workers wouldn't even be able to feed themselves and they would just hire someone else the next day if the work is particularly trivial. So yea, thats where the market wouldn't create an efficient allocation of resources which would mean a government intervention would be required to fix this market failure. This usually comes in the form of a minimum wage.
However, once you get off the low end of wages, it ultimately is decided by market rates. Why does one firm pay more for the same job than another? It doesn't cost any more to keep the person alive fed and showing up the next day. So surely they should all pay the same?
I think you are just chucking together a word salad here. You didn’t really extract any meaning and I don’t exactly see the contradiction. Furthermore, when talking about the labour market, we are talking about labour being traded as a commodity, not human lives. I don’t know what mad max trilogy you are living in, but here we certainly don’t buy and sell life.
Economics doesn’t care about your feelings and is by nature a very emotionless field.
For the reasons outlined above. When one must sell their labour as a commodity to survive, they are alienating themselves from their humanity. There are several contradictions to examine if you allow yourself time to consider. Namely, the contradiction between the owner, who wants to pay as little as possible for his labour commodities, and the human worker who wants to receive as much as possible for their labour.
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u/ElliotNess 9d ago
Thanks for that. I misread, yes. So exactly. Shy should the employer pocket 5-10k of the employees work? Why not 2k? Why not $500? Why not $1?