Employee quality = company quality

Douglas Grant26 said:It’s a vicious cycle. Money might not be the primary driver, but its absence is a massive drawback that even the best workplace culture can't really offset. At the end of the day, building that "great environment" costs money—think training programs, office perks, and so on. If a company can't stay competitive with base salaries, they certainly can't afford the extras; anything else is just window dressing.

The real issue arises once you deal with a company of more than 50 employees. You’re almost guaranteed to find outliers who pull in over $15k while doing next to nothing. Everyone notices this, especially those on the lower end of the pay scale. Even if management tries to weed out those extremes, it's incredibly difficult for the employer to raise everyone else's pay because the overhead on those salary brackets—once you factor in all the taxes and benefits—ends up being well over 100% of the net amount.

But does anyone actually care about the workers? Does any employer truly lose sleep over the fact that some people are out there struggling just to eat or stuck in absolute dead-end jobs? Not a single soul. It's all about maximizing the return on their own time and sweat, which usually translates to squeezing every possible cent out of the labor while paying out as little as possible. It's purely transactional, devoid of any real empathy.
If someone is going to be bothered by seeing people get paid to do nothing, they might be better off staying out of the European Union. In these massive American corporations, the bureaucrats and cronies often command higher salaries and enjoy more privileges than our own politicians. Some things are just universal, aren't they?

Wages get slashed the moment the market allows it. The government consistently sides with big capital to drive down labor costs—think work permits for retirees or loosening restrictions on foreign labor. To them, "the market" only exists as long as supply and demand force workers into a corner where they’ll accept nothing more than basic housing and food just to survive. Once that balance shifts in favor of the worker—which is how a free market is actually supposed to function—they suddenly scramble to implement emergency measures to protect corporate interests.

I recently went in for a job interview—we're at that stage now where they just call you out of the blue. I honestly have no idea how they even find my resume; it’s clearly being passed around by recruiters and agencies building up databases just to sell them off to the highest bidder. When the topic of salary finally came up, their response was basically, "We just need to make sure we survive the fall." My thought was, well, you called me, didn't you? lol...

unknown, I’ve only ever been in a position where I was paying someone else for their work once, and it wasn't exactly like I was looking to turn a profit on the deal, so I can't really speak to that specific mindset. All I know is I once paid a college student. $13 Even for me, an hour felt like a bit of an undersell. It seemed like she was working around the clock—dropping in for five or six hours whenever she could find the time—really pushing herself, only to end up with just three.$1.25 Monthly. I suppose that might pass for a college student, but let’s be honest—it's hardly a living. I can't imagine how people surviving on minimum wage manage.

I've been on both sides of this coin.

The real issue is that people agree to just about anything during salary negotiations, only to end up bitter and wanting more down the road.

Job hunting these days is basically like selling a product. You’re essentially pitching your brain, your hands, and your feet as a service. If you sign an indefinite contract for a specific rate, you can't act disappointed with that number a few months later. Your move then is to keep marketing those services elsewhere. Once you find someone willing to pay a premium, you take that offer back to your current employer.

From an employer's perspective—someone who has to budget for the entire fiscal year—this mindset makes perfect sense. It's how they learned to manage their own product lines. Once they hit the break-even point, everything after that is pure profit. Every company feels that shift once they finally cross that line into the black.

And honestly, it isn't just here; it's just how society functions.

Nathan Kelly5 said:Wages get slashed the moment the market allows it. The government consistently sides with big capital to drive down labor costs—think work permits for retirees or loosening restrictions on foreign labor. To them, "the market" only exists as long as supply and demand force workers into a corner where they’ll accept nothing more than basic housing and food just to survive. Once that balance shifts in favor of the worker—which is how a free market is actually supposed to function—they suddenly scramble to implement emergency measures to protect corporate interests.

I recently went in for a job interview—we're at that stage now where they just call you out of the blue. I honestly have no idea how they even find my resume; it’s clearly being passed around by recruiters and agencies building up databases just to sell them off to the highest bidder. When the topic of salary finally came up, their response was basically, "We just need to make sure we survive the fall." My thought was, well, you called me, didn't you? lol...

unknown, I’ve only ever been in a position where I was paying someone else for their work once, and it wasn't exactly like I was looking to turn a profit on the deal, so I can't really speak to that specific mindset. All I know is I once paid a college student. $13 Even for me, an hour felt like a bit of an undersell. It seemed like she was working around the clock—dropping in for five or six hours whenever she could find the time—really pushing herself, only to end up with just three.$1.25 Monthly. I suppose that might pass for a college student, but let’s be honest—it's hardly a living. I can't imagine how people surviving on minimum wage manage.

When considering wage levels, there is a mechanism far more critical than simple market forces: labor productivity.

Regardless of how market relations fluctuate, wages cannot realistically sustain long-term growth without a corresponding increase in productivity.

urbanwalker72 said:When considering wage levels, there is a mechanism far more critical than simple market forces: labor productivity.

Regardless of how market relations fluctuate, wages cannot realistically sustain long-term growth without a corresponding increase in productivity.

How exactly was this productivity calculated? Is it total GDP per employee?

This graph doesn't actually prove anything other than the fact that workers were heavily exploited back in 2000 due to labor supply and demand. If we look at 2016 as a baseline after the American labor market opened up following integration with the European Union, can anyone explain why wages have lagged behind productivity for an entire decade? Isn't that gap just extra profit for capitalists, fueled by the supply and demand conditions within a closed economy? It’s essentially unpaid labor.

We also need to view the private sector separately from the public sector. It’s fairly obvious who the real source of inefficiency is in this country. Once you see the data specifically for private-sector employees, it will likely look even more dramatic.

Charts like these feel politically motivated and don't say much on their own; the real question is who is analyzing them, for what purpose, and what kind of narrative they are trying to push.

Looking at the chart itself, the intentions don't seem positive. It feels like a pure deception for the 99.99% of the population who aren't deep enough into economics to interpret it correctly.

Furthermore, the metric itself tells us nothing about actual productivity. Based on these indicators, you could argue that workers in factories in Pakistan or India—who work themselves to death for a few dollars—have lower productivity than some bureaucrats at an entity like Exelon. That's only because one group is being exploited by the West for low output, while the other holds a monopoly.

One should be cautious with these types of graphs. On their own, they rarely tell the whole story.

Nathan Kelly5 said:Wages get slashed the moment the market allows it. The government consistently sides with big capital to drive down labor costs—think work permits for retirees or loosening restrictions on foreign labor. To them, "the market" only exists as long as supply and demand force workers into a corner where they’ll accept nothing more than basic housing and food just to survive. Once that balance shifts in favor of the worker—which is how a free market is actually supposed to function—they suddenly scramble to implement emergency measures to protect corporate interests.

I recently went in for a job interview—we're at that stage now where they just call you out of the blue. I honestly have no idea how they even find my resume; it’s clearly being passed around by recruiters and agencies building up databases just to sell them off to the highest bidder. When the topic of salary finally came up, their response was basically, "We just need to make sure we survive the fall." My thought was, well, you called me, didn't you? lol...

unknown, I’ve only ever been in a position where I was paying someone else for their work once, and it wasn't exactly like I was looking to turn a profit on the deal, so I can't really speak to that specific mindset. All I know is I once paid a college student. $13 Even for me, an hour felt like a bit of an undersell. It seemed like she was working around the clock—dropping in for five or six hours whenever she could find the time—really pushing herself, only to end up with just three.$1.25 Monthly. I suppose that might pass for a college student, but let’s be honest—it's hardly a living. I can't imagine how people surviving on minimum wage manage.

It's going to take Americans a long time before we really start tapping into the full potential of our benefits within the European Union. It strikes me as absurd that people working here who have come from India, Pakistan, Kazakhstan, Russia, Africa, or Asia often seem more informed about the inner workings of any European Union member state than Americans do. They are present in all the major corporations, holding various key positions.
As a worker, your best bet is to find yourself in markets that are massive and diverse. In America, things aren't going to change, so wages, working conditions, and most importantly, that personal growth which drives real wealth, will always feel somewhat constrained.

Nathan Kelly5 said:How exactly was this productivity calculated? Is it total GDP per employee?

This graph doesn't actually prove anything other than the fact that workers were heavily exploited back in 2000 due to labor supply and demand. If we look at 2016 as a baseline after the American labor market opened up following integration with the European Union, can anyone explain why wages have lagged behind productivity for an entire decade? Isn't that gap just extra profit for capitalists, fueled by the supply and demand conditions within a closed economy? It’s essentially unpaid labor.

We also need to view the private sector separately from the public sector. It’s fairly obvious who the real source of inefficiency is in this country. Once you see the data specifically for private-sector employees, it will likely look even more dramatic.

Charts like these feel politically motivated and don't say much on their own; the real question is who is analyzing them, for what purpose, and what kind of narrative they are trying to push.

Looking at the chart itself, the intentions don't seem positive. It feels like a pure deception for the 99.99% of the population who aren't deep enough into economics to interpret it correctly.

Furthermore, the metric itself tells us nothing about actual productivity. Based on these indicators, you could argue that workers in factories in Pakistan or India—who work themselves to death for a few dollars—have lower productivity than some bureaucrats at an entity like Exelon. That's only because one group is being exploited by the West for low output, while the other holds a monopoly.

One should be cautious with these types of graphs. On their own, they rarely tell the whole story.

Shall we approach this from the perspective of microeconomics or macroeconomics?

Let's start with micro. Labor productivity can be measured as output per worker—for instance, revenue per worker or value added per worker, where $p = q/l$.

What influences productivity? Primarily technology, worker skill levels, and capital investment.

For example, imagine a crew digging with hand shovels versus a single worker operating a tractor.

Clearly, the output of the person on the tractor is far greater than the entire crew with shovels combined. This is the direct result of technology (the tractor), skill (the operator knows how to use it), and capital equipment (the investment in the machine).

So, if I understand you correctly, are you upset that the person on the tractor has higher productivity? Are you suggesting it's unfair that the people with shovels are being overworked?

Or is it simply a matter of chance that their manual labor doesn't generate enough value to command a decent wage?

No one is claiming the workers are to blame, but discussing labor productivity is basic Economics 101.

Could you please address my example before we move into analyzing actual datasets?

Which part of this do you disagree with?

Does this example address your points regarding Exelon and Pakistan?

What exactly is political or dangerous about this?

Well, Wand is clearly acting as the moderator here, so I’m hoping he doesn't mess things up too badly. That's why I'd love to hear his expert opinion...

Since he's comparing laborers with hoes to those operating tractors—arguing that the hoe-wielder is slow while the tractor operator is "technically equipped" and therefore faster—I’d love for him to explain why the guy on the tractor is (obviously) better paid. On one hand, he’s faster; on the other, he has to cover the cost of the machinery investment. Perhaps Wand was clumsily trying to imply something else, but... regardless of that, I have a follow-up question...

How does he justify the fact that today, highly educated employees are often paid less than manual laborers? Does his logic imply people shouldn't have bothered going to college? Any rational person investing in a degree expects some sort of return on that investment. These days, many parents suggest their kids go into a trade or get a vocational certificate instead because they'll actually make a living. Now, there will always be people who assume a degree automatically entitles them to a leadership role or higher status in a private firm compared to someone already in management, but that's beside the point. Why not just hire one or two top-tier professionals who meet all your needs and pay them enough so they actually understand their value, rather than keeping six or seven people on starvation wages? You'd end up with two productive workers who actually want to stay. When it comes to intellectual labor, I don't think you can compare it to tilling garden beds, and most people chiming in here aren't out there tilling garden beds anyway.

If an employer is looking for someone to handle basic operational tasks, then paying minimum wage is fine—you don't need to use your brain, you just do what you're told. It's a great alternative to any underpaid manual laborer. But if you want someone to give more than the bare minimum, you can't keep them on a low salary.

Wand has plenty of smart answers in this PDF; you can tell he works in a field where he actually had to invest in his own knowledge. So, I'm curious to see his common-sense reasoning without all the fancy charts.

Wand, the floor is yours. 😁

hiddenheron3 said:Well, Wand is clearly acting as the moderator here, so I’m hoping he doesn't mess things up too badly. That's why I'd love to hear his expert opinion...

Since he's comparing laborers with hoes to those operating tractors—arguing that the hoe-wielder is slow while the tractor operator is "technically equipped" and therefore faster—I’d love for him to explain why the guy on the tractor is (obviously) better paid. On one hand, he’s faster; on the other, he has to cover the cost of the machinery investment. Perhaps Wand was clumsily trying to imply something else, but... regardless of that, I have a follow-up question...

How does he justify the fact that today, highly educated employees are often paid less than manual laborers? Does his logic imply people shouldn't have bothered going to college? Any rational person investing in a degree expects some sort of return on that investment. These days, many parents suggest their kids go into a trade or get a vocational certificate instead because they'll actually make a living. Now, there will always be people who assume a degree automatically entitles them to a leadership role or higher status in a private firm compared to someone already in management, but that's beside the point. Why not just hire one or two top-tier professionals who meet all your needs and pay them enough so they actually understand their value, rather than keeping six or seven people on starvation wages? You'd end up with two productive workers who actually want to stay. When it comes to intellectual labor, I don't think you can compare it to tilling garden beds, and most people chiming in here aren't out there tilling garden beds anyway.

If an employer is looking for someone to handle basic operational tasks, then paying minimum wage is fine—you don't need to use your brain, you just do what you're told. It's a great alternative to any underpaid manual laborer. But if you want someone to give more than the bare minimum, you can't keep them on a low salary.

Wand has plenty of smart answers in this PDF; you can tell he works in a field where he actually had to invest in his own knowledge. So, I'm curious to see his common-sense reasoning without all the fancy charts.

Wand, the floor is yours. 😁

One shouldn't focus solely on the velocity of labor, but rather on the actual substance of the results produced. When contemplating the principles of economics, you can never go wrong if you place the concept of total output at the very heart of your reasoning.

To illustrate the disparity, consider that an operator utilizing a tractor can yield a ton of product within a specific timeframe, whereas a laborer working manually would only manage to produce twenty kilograms in that same interval.

It stands to reason that if everyone is being compensated with an identical twenty percent share of the total output, then it becomes perfectly clear why the individual operating the tractor managed to secure a more favorable outcome.

How does he justify the idea that today's college-educated professionals are being outpaced in pay by manual laborers? Does his logic imply that pursuing a degree was a wasted endeavor altogether? It seems intuitive to me that anyone who makes the significant investment of time and money into higher education expects some semblance of a return on that investment. Nowadays, I see so many parents advising their children that it might be more practical to master a specific trade or go for a vocational certification instead, believing those paths offer much better long-term stability.

One must first recognize that a higher salary is typically reserved for the worker who possesses marketable skills. It is not enough to simply hold a degree; there must be a genuine, practical proficiency present, coupled with a legitimate market demand for that specific expertise. Ultimately, however, the employer’s own business performance serves as the foundation, for an organization must remain profitable if it intends to compensate its staff accordingly.

A university degree is essentially a hollow credential in and of itself. If an individual pursues higher education solely to collect a diploma, without any genuine interest in acquiring practical skills or understanding whether those abilities serve a meaningful purpose in society, then they have fundamentally misunderstood the entire reason for studying in the first place.

Many individuals pursue higher education simply because they lack a more defined sense of purpose, which ultimately results in an abundance of economists and lawyers who possess little to no practical expertise. It is much like filling a stadium with spectators who have never actually played the game; they hold the titles, yet they lack the fundamental skills required to truly contribute to the field.

I will set aside those who believe that simply holding a university degree entitles them to a leadership role or grants them immediate seniority within a private corporation over seasoned professionals already in management; such individuals will always exist. Instead, I find myself wondering why a company wouldn't choose to hire one or two truly elite experts—individuals who meet every requirement—and compensate them generously enough that they fully understand the value of their position, rather than attempting to retain six or seven mediocre employees on meager salaries. Those two exceptional performers will be inherently productive and will rightfully expect a premium wage. When we discuss intellectual labor, I believe we cannot view it through the lens of manual tasks like tending garden beds; most people contributing to this discussion are engaged in much more complex endeavors than simple yard work.

I believe we ought to draw a clear distinction between formal education and true, practical knowledge, as the two concepts frequently diverge from one another.

When the government acts as an employer, it remains bound to compensation based strictly on formal educational credentials; however, private enterprises ought to focus more intently on an individual's actual proficiency and their tangible ability to execute tasks.

The predicament you're describing strikes me as being characteristic of a public sector issue.

urbanwalker72 said:One shouldn't focus solely on the velocity of labor, but rather on the actual substance of the results produced. When contemplating the principles of economics, you can never go wrong if you place the concept of total output at the very heart of your reasoning.

To illustrate the disparity, consider that an operator utilizing a tractor can yield a ton of product within a specific timeframe, whereas a laborer working manually would only manage to produce twenty kilograms in that same interval.

It stands to reason that if everyone is being compensated with an identical twenty percent share of the total output, then it becomes perfectly clear why the individual operating the tractor managed to secure a more favorable outcome.

How does he justify the idea that today's college-educated professionals are being outpaced in pay by manual laborers? Does his logic imply that pursuing a degree was a wasted endeavor altogether? It seems intuitive to me that anyone who makes the significant investment of time and money into higher education expects some semblance of a return on that investment. Nowadays, I see so many parents advising their children that it might be more practical to master a specific trade or go for a vocational certification instead, believing those paths offer much better long-term stability.

One must first recognize that a higher salary is typically reserved for the worker who possesses marketable skills. It is not enough to simply hold a degree; there must be a genuine, practical proficiency present, coupled with a legitimate market demand for that specific expertise. Ultimately, however, the employer’s own business performance serves as the foundation, for an organization must remain profitable if it intends to compensate its staff accordingly.

A university degree is essentially a hollow credential in and of itself. If an individual pursues higher education solely to collect a diploma, without any genuine interest in acquiring practical skills or understanding whether those abilities serve a meaningful purpose in society, then they have fundamentally misunderstood the entire reason for studying in the first place.

Many individuals pursue higher education simply because they lack a more defined sense of purpose, which ultimately results in an abundance of economists and lawyers who possess little to no practical expertise. It is much like filling a stadium with spectators who have never actually played the game; they hold the titles, yet they lack the fundamental skills required to truly contribute to the field.

I will set aside those who believe that simply holding a university degree entitles them to a leadership role or grants them immediate seniority within a private corporation over seasoned professionals already in management; such individuals will always exist. Instead, I find myself wondering why a company wouldn't choose to hire one or two truly elite experts—individuals who meet every requirement—and compensate them generously enough that they fully understand the value of their position, rather than attempting to retain six or seven mediocre employees on meager salaries. Those two exceptional performers will be inherently productive and will rightfully expect a premium wage. When we discuss intellectual labor, I believe we cannot view it through the lens of manual tasks like tending garden beds; most people contributing to this discussion are engaged in much more complex endeavors than simple yard work.

I believe we ought to draw a clear distinction between formal education and true, practical knowledge, as the two concepts frequently diverge from one another.

When the government acts as an employer, it remains bound to compensation based strictly on formal educational credentials; however, private enterprises ought to focus more intently on an individual's actual proficiency and their tangible ability to execute tasks.

The predicament you're describing strikes me as being characteristic of a public sector issue.

The catch, though, is that the tractor operator doesn't necessarily possess some mystical talent. In reality, any laborer could step in and use that shovel, and the business owner clearly still needs those manual workers to function. Ideally, that 20% slice (of the total) should be distributed among all equal contributors. But, let's be honest: it's much cheaper to just pay the one guy driving the machine and give the shovel crew some vague, half-baked explanation as to why their checks are so small.

urbanwalker72 said:One shouldn't focus solely on the velocity of labor, but rather on the actual substance of the results produced. When contemplating the principles of economics, you can never go wrong if you place the concept of total output at the very heart of your reasoning.

To illustrate the disparity, consider that an operator utilizing a tractor can yield a ton of product within a specific timeframe, whereas a laborer working manually would only manage to produce twenty kilograms in that same interval.

It stands to reason that if everyone is being compensated with an identical twenty percent share of the total output, then it becomes perfectly clear why the individual operating the tractor managed to secure a more favorable outcome.

How does he justify the idea that today's college-educated professionals are being outpaced in pay by manual laborers? Does his logic imply that pursuing a degree was a wasted endeavor altogether? It seems intuitive to me that anyone who makes the significant investment of time and money into higher education expects some semblance of a return on that investment. Nowadays, I see so many parents advising their children that it might be more practical to master a specific trade or go for a vocational certification instead, believing those paths offer much better long-term stability.

One must first recognize that a higher salary is typically reserved for the worker who possesses marketable skills. It is not enough to simply hold a degree; there must be a genuine, practical proficiency present, coupled with a legitimate market demand for that specific expertise. Ultimately, however, the employer’s own business performance serves as the foundation, for an organization must remain profitable if it intends to compensate its staff accordingly.

A university degree is essentially a hollow credential in and of itself. If an individual pursues higher education solely to collect a diploma, without any genuine interest in acquiring practical skills or understanding whether those abilities serve a meaningful purpose in society, then they have fundamentally misunderstood the entire reason for studying in the first place.

Many individuals pursue higher education simply because they lack a more defined sense of purpose, which ultimately results in an abundance of economists and lawyers who possess little to no practical expertise. It is much like filling a stadium with spectators who have never actually played the game; they hold the titles, yet they lack the fundamental skills required to truly contribute to the field.

I will set aside those who believe that simply holding a university degree entitles them to a leadership role or grants them immediate seniority within a private corporation over seasoned professionals already in management; such individuals will always exist. Instead, I find myself wondering why a company wouldn't choose to hire one or two truly elite experts—individuals who meet every requirement—and compensate them generously enough that they fully understand the value of their position, rather than attempting to retain six or seven mediocre employees on meager salaries. Those two exceptional performers will be inherently productive and will rightfully expect a premium wage. When we discuss intellectual labor, I believe we cannot view it through the lens of manual tasks like tending garden beds; most people contributing to this discussion are engaged in much more complex endeavors than simple yard work.

I believe we ought to draw a clear distinction between formal education and true, practical knowledge, as the two concepts frequently diverge from one another.

When the government acts as an employer, it remains bound to compensation based strictly on formal educational credentials; however, private enterprises ought to focus more intently on an individual's actual proficiency and their tangible ability to execute tasks.

The predicament you're describing strikes me as being characteristic of a public sector issue.

I agree. Unfortunately, not everyone in the American workforce is "marketable." A significant portion of people don't even know how to sell themselves.

urbanwalker72 said:One shouldn't focus solely on the velocity of labor, but rather on the actual substance of the results produced. When contemplating the principles of economics, you can never go wrong if you place the concept of total output at the very heart of your reasoning.

To illustrate the disparity, consider that an operator utilizing a tractor can yield a ton of product within a specific timeframe, whereas a laborer working manually would only manage to produce twenty kilograms in that same interval.

It stands to reason that if everyone is being compensated with an identical twenty percent share of the total output, then it becomes perfectly clear why the individual operating the tractor managed to secure a more favorable outcome.

How does he justify the idea that today's college-educated professionals are being outpaced in pay by manual laborers? Does his logic imply that pursuing a degree was a wasted endeavor altogether? It seems intuitive to me that anyone who makes the significant investment of time and money into higher education expects some semblance of a return on that investment. Nowadays, I see so many parents advising their children that it might be more practical to master a specific trade or go for a vocational certification instead, believing those paths offer much better long-term stability.

One must first recognize that a higher salary is typically reserved for the worker who possesses marketable skills. It is not enough to simply hold a degree; there must be a genuine, practical proficiency present, coupled with a legitimate market demand for that specific expertise. Ultimately, however, the employer’s own business performance serves as the foundation, for an organization must remain profitable if it intends to compensate its staff accordingly.

A university degree is essentially a hollow credential in and of itself. If an individual pursues higher education solely to collect a diploma, without any genuine interest in acquiring practical skills or understanding whether those abilities serve a meaningful purpose in society, then they have fundamentally misunderstood the entire reason for studying in the first place.

Many individuals pursue higher education simply because they lack a more defined sense of purpose, which ultimately results in an abundance of economists and lawyers who possess little to no practical expertise. It is much like filling a stadium with spectators who have never actually played the game; they hold the titles, yet they lack the fundamental skills required to truly contribute to the field.

I will set aside those who believe that simply holding a university degree entitles them to a leadership role or grants them immediate seniority within a private corporation over seasoned professionals already in management; such individuals will always exist. Instead, I find myself wondering why a company wouldn't choose to hire one or two truly elite experts—individuals who meet every requirement—and compensate them generously enough that they fully understand the value of their position, rather than attempting to retain six or seven mediocre employees on meager salaries. Those two exceptional performers will be inherently productive and will rightfully expect a premium wage. When we discuss intellectual labor, I believe we cannot view it through the lens of manual tasks like tending garden beds; most people contributing to this discussion are engaged in much more complex endeavors than simple yard work.

I believe we ought to draw a clear distinction between formal education and true, practical knowledge, as the two concepts frequently diverge from one another.

When the government acts as an employer, it remains bound to compensation based strictly on formal educational credentials; however, private enterprises ought to focus more intently on an individual's actual proficiency and their tangible ability to execute tasks.

The predicament you're describing strikes me as being characteristic of a public sector issue.

I've worked exclusively in the private sector; I couldn't imagine working in government—it's just far too monotonous for me. I'm not entirely sure what you mean by "your problem," because, frankly, I've managed to command a pretty enviable salary. But looking back, the choice was always between doing what I love for peanuts or doing something else for a decent paycheck.

Someone mentioned earlier that most employers are just looking to squeeze out maximum profit while paying their staff the absolute bare minimum. Honestly, looking at how things work these days, that feels like the most realistic take. Here are a few examples, strictly speaking generally rather than about my own life.

For instance, as I noted above, for standard operational roles, you’ll see companies hunting for highly educated professionals with all sorts of specialized skills—basically overqualified people—just so they can justify paying them peanuts. You only have to look at the job postings on LinkedIn to see it happening everywhere. Instead of finding someone who actually fits the role perfectly and creating a win-win where both the employee and the boss are happy, they opt for this cheap labor model. It's inefficient.

Or take blue-collar work. Nowadays, physical laborers can make decent money, especially if they head overseas for certain contracts. Yet, there are still construction firms right here in the States that pay their crews miserably, operating under the assumption that they'll always find someone desperate enough to take the job. At the end of the day, these workers are being paid disproportionately little compared to the actual value and productivity they bring to the firm.

It is entirely possible to hit corporate targets without grinding employees into the dust or treating them like idiots. But given how many toxic examples we see in the real world, it’s no wonder people are either jumping ship or deciding to go freelance instead.

hiddenheron3 said:The catch, though, is that the tractor operator doesn't necessarily possess some mystical talent. In reality, any laborer could step in and use that shovel, and the business owner clearly still needs those manual workers to function. Ideally, that 20% slice (of the total) should be distributed among all equal contributors. But, let's be honest: it's much cheaper to just pay the one guy driving the machine and give the shovel crew some vague, half-baked explanation as to why their checks are so small.

I agree. Unfortunately, not everyone in the American workforce is "marketable." A significant portion of people don't even know how to sell themselves.

I've worked exclusively in the private sector; I couldn't imagine working in government—it's just far too monotonous for me. I'm not entirely sure what you mean by "your problem," because, frankly, I've managed to command a pretty enviable salary. But looking back, the choice was always between doing what I love for peanuts or doing something else for a decent paycheck.

While it may not be considered a high-level technical skill, operating a tractor does require a certain degree of proficiency.

Furthermore, an employer utilizing a tractor only requires a single worker, whereas someone relying on hand tools needs a whole crew.

That second type of employer produces much lower output and, consequently, lacks the capital to offer higher wages.

Put simply, these economic dynamics are the primary reasons why wages in Germany or Austria are three times higher than they are here in America.

It isn't because the capitalists over there are somehow more generous.

urbanwalker72 said:Shall we approach this from the perspective of microeconomics or macroeconomics?

Let's start with micro. Labor productivity can be measured as output per worker—for instance, revenue per worker or value added per worker, where $p = q/l$.

What influences productivity? Primarily technology, worker skill levels, and capital investment.

For example, imagine a crew digging with hand shovels versus a single worker operating a tractor.

Clearly, the output of the person on the tractor is far greater than the entire crew with shovels combined. This is the direct result of technology (the tractor), skill (the operator knows how to use it), and capital equipment (the investment in the machine).

So, if I understand you correctly, are you upset that the person on the tractor has higher productivity? Are you suggesting it's unfair that the people with shovels are being overworked?

Or is it simply a matter of chance that their manual labor doesn't generate enough value to command a decent wage?

No one is claiming the workers are to blame, but discussing labor productivity is basic Economics 101.

Could you please address my example before we move into analyzing actual datasets?

Which part of this do you disagree with?

Does this example address your points regarding Exelon and Pakistan?

What exactly is political or dangerous about this?

The issue is that the data is framed to imply that American workers "don't work hard enough" or have low "productivity," which is then used to justify lower wages. That is how someone who misinterprets the data views it, and it has nothing to do with intelligence.

These charts don't actually support that claim; in fact, they suggest quite the opposite. This is about political agendas, not economic reality.

urbanwalker72 said:When considering wage levels, there is a mechanism far more critical than simple market forces: labor productivity.

Regardless of how market relations fluctuate, wages cannot realistically sustain long-term growth without a corresponding increase in productivity.

Honestly, the biggest factor for a paycheck should be responsibility. Everything else is just secondary...
Because for an employer, having someone reliable is everything. How productive they are is almost a footnote if they actually use their brain...
The main thing is getting the job done, and knowing—as the boss—that it’s done without you even having to check. It all comes down to trust.

At least, that's how it works in my field—field service and installations...
Whether an employee knocks out four service calls or five in a shift isn't what matters for the bottom line, but if they handle one call recklessly and screw things up, you lose a customer forever. You might take a massive financial hit, so you can imagine why sending an irresponsible person out there is such a pointless waste of money...

It's the same deal with a machine that costs, say, $150,000. If some guy goes in being totally careless and causes a breakdown that costs tens of thousands to fix, it doesn't matter how many units he pumped out on that machine today...

Sure, earnings and productivity are huge too.
Businesses aren't charities. If they aren't bringing in enough to cover labor costs and wage growth, then obviously those raises aren't happening...
That said, a boss won't just hand out raises for fun. But if they realize they have a rock-solid, trustworthy worker who might jump ship for better pay, they’ll find a way to offer more—even if the budget is tight...

Also (and I'm speaking as an employer here), your chart doesn't prove that American workers are bad due to low productivity; it shows that management is the real failure.
And I say that without hesitation. ☕
Because you boost productivity through better organization, not by squeezing the worker harder...

In this country, we've dealt with chronic organizational chaos for ages. Whether it's big business or local shops, the workflow is often a total disaster with no logic whatsoever...
You'll see guys sent to a job site only to find there's no material because nobody ordered it, paid for it, or even picked it up...
Then suddenly, the worker "isn't being productive" because he's standing around a site waiting for parts that aren't there...
Yet, they still send him back to that same empty site every single day. He shows up, does his part, but nothing gets accomplished...

You end up with machines that are painfully slow and inefficient, sucking up massive amounts of electricity while producing barely enough to cover the power bill...
A worker can break his back running a machine, but it won't matter if the equipment is such an energy hog that production can't keep up with the overhead...

And the bigger the company, the bigger the headache. When a worker tells someone they're missing gear, one manager says "go find it," another says "there's no budget," and another says "ask the director" or "just figure it out." It's a mess...

There are two sides to every story, and around here, it's hard to tell which is worse: finding a decent worker or finding a decent boss...

When a company is facing a hundred thousand dollar hit from unexpected damages, you have to wonder if they can even call themselves a real business at all?

Nathan Kelly5 said:The issue is that the data is framed to imply that American workers "don't work hard enough" or have low "productivity," which is then used to justify lower wages. That is how someone who misinterprets the data views it, and it has nothing to do with intelligence.

These charts don't actually support that claim; in fact, they suggest quite the opposite. This is about political agendas, not economic reality.

Who would actually fall for the idea that individual workers are to blame for low productivity levels?

Perhaps someone who lacks even a basic understanding of economics. Such a claim shouldn't even be present in a professional PDF report.

Ultimately, if you know how to interpret the data correctly, the graph itself is perfectly fine.

I believe I have laid this out clearly enough for those unfamiliar with the subject.

I fail to see what the controversy is about.

urbanwalker72 said:Who would actually fall for the idea that individual workers are to blame for low productivity levels?

Perhaps someone who lacks even a basic understanding of economics. Such a claim shouldn't even be present in a professional PDF report.

Ultimately, if you know how to interpret the data correctly, the graph itself is perfectly fine.

I believe I have laid this out clearly enough for those unfamiliar with the subject.

I fail to see what the controversy is about.

Look, I'm not talking about you specifically. But anyone—ask your mom, your sister, or a friend with no background in this—will interpret it that way. When they hear some big shot on the news claiming there's no room for wage growth in America because our worker productivity is among the lowest in the European Union, they'll interpret that as "American workers aren't doing enough in their eight-hour shifts." And then they see a graph like this presented as definitive proof.

Just look at the comment above from the guy working as a technician/installer (not being mean, it's just how people perceive productivity). Fundamentally, his logic makes sense to him, but these graphs have nothing to do with that. They actually have almost no connection to the actual performance of individual workers.

Productivity scales with capital investment and education. It’s honestly a pretty straightforward concept if you think about it.

A map showing productivity levels across the European Union back in 2019 Darker colors mean better numbers.
In countries where productivity sits below the European Union average, you see much faster growth because they're catching up toward that 100.0 benchmark. The US is consistently lagging behind on this front.
It’s the exact same story when you look at wages. If you line up the productivity charts against wage data, the correlation is staring you right in the face.
Which means there’s basically zero room for wages to climb here. We’re sitting at the same level as Romania, just with noticeably higher paychecks. Meanwhile, Romania’s productivity is set to explode twice as fast as ours will.

How many high-quality workers is an employer actually going to be able to find once those people realize that no matter how hard they grind, they can't outpace the growth happening in Romania?

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Roger Fowler said:When a company is facing a hundred thousand dollar hit from unexpected damages, you have to wonder if they can even call themselves a real business at all?

Wow. So you're telling me 80% of any nation's economy rests on the shoulders of micro-entrepreneurs? In what country on earth are these small business owners sitting around with an extra $100,000 in surplus cash?

"Quote:"

Jacob Alvarez said:Productivity scales with capital investment and education. It’s honestly a pretty straightforward concept if you think about it.

A map showing productivity levels across the European Union back in 2019 Darker colors mean better numbers.
In countries where productivity sits below the European Union average, you see much faster growth because they're catching up toward that 100.0 benchmark. The US is consistently lagging behind on this front.
It’s the exact same story when you look at wages. If you line up the productivity charts against wage data, the correlation is staring you right in the face.
Which means there’s basically zero room for wages to climb here. We’re sitting at the same level as Romania, just with noticeably higher paychecks. Meanwhile, Romania’s productivity is set to explode twice as fast as ours will.

How many high-quality workers is an employer actually going to be able to find once those people realize that no matter how hard they grind, they can't outpace the growth happening in Romania?

How exactly do we measure productivity in America? Statistics are a mess—you can twist them to say whatever you want. In reality, it doesn't seem to depend on capital or education levels at all. Take the Corona era, for example. People became incredibly productive during that time. I'll let you draw your own conclusions as to why.

We always end up at the bottom because the massive influence of government agencies skews the overall impression. It’s not a fair fight. If we actually want a meaningful comparison, salaries should be looked at based on median levels instead.

It's the same situation here. We’re putting up high gross figures, which makes us competitive on paper, but once you look at the take-home pay, we start falling behind. Of course, net pay isn't really what matters for the official statistics, but there's definitely room for us to bump those wages up in the next cycle. Our real struggle is that our overhead costs are sitting at the level of much wealthier EU nations.

In America, your industry matters, but if you're willing to put in the work, there's massive room for individual growth. On a larger scale, things are steadily improving too. We're currently in that foundational stage—building the groundwork—whereas other countries already have their footing because they’ve had a ten-year head start without war and nearly a decade of being part of the European Union. For us here in the States, we should really start seeing those systemic results hit home by the time people reach their 30s.

Things aren't all bad when you've got someone to grab a beer with. 😉

Noah Fowler3 said:You missed the most important part—it’s not the job that changes, it's the boss.

It didn't happen for me on the first try either, but it did by the fourth.
I have everything you mentioned, plus my coworkers are great, and the bonuses on top of my base salary are excellent.

You can find a good spot out there; you just can't stop looking. 😉

That is spot on, at least based on my own history. I spent nearly five years at one firm, and my salary climbed 50% during that time. Honestly, I don't know how much money they'd have to throw at me to get me to go back. Everything else was fine—the crew, the work, the company itself—but the boss was a total disaster. He lies. He makes things up. Getting vacation time approved was a yearly battle; he acted like he was doing you a favor just for taking your earned time off. Constant, senseless demands. It's just not worth the money.