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Best to Get Paid Less Than You're Worth

The market does not have an even hand. We would all likely be dead without farmers, water treatment guys and the like who keep the hedge fund managers alive. Betty the bank VP or Benny the lawyer would likely not survive a week without them. The market's influence is based on coercion, not choice or value of services.

I agree the the market is probably not totally efficient at pricing labor, but my question remains: how else would you do so?

Your example doesn't show the worth of a single farmer or water treatment guy, but rather the aggregate of all farmers and all water treatment guys.

When someone is looking for a job and they ask themselves what they are worth, they're usually using shorthand for asking what they're worth in the market. What else would it be? Worthington's Law?
 
Again, you got the least amount it took to keep you. You can't say you got more than if you asked because you never asked. You really have no idea what you left on the table.

In my case I took advantage of being underpaid to steer the company's tech decisions along more efficient, profitable lines. They gave me a great amount of freedom to do this. Worked out well. I did what I greatly enjoyed and the business benefited and grew each year. Retired 25 years ago with enough money to last the rest of my life. Investors and top management did well too.
 
Better for who?

It's best if people are paid appropriately. But what the hell does that mean?

As someone who negotiated product prices multiple times every day, I can say that this is more about perception than anything else. Everyone wants a good deal.. That means employers, employees, customers whatever.

Companies try to improve their bottom line. They look at costs, they look at sales. Anything to improve that equation. A good friend of mine inherited his father's real estate company. At that time, they were the largest residential real estate brokerage in the State of Washington. My friend took it over and proceeded to screw it up. He thought that he could make more if he paid his brokers less. The best of his brokers went elsewhere and sales dramatically decreased. My friend drove his father's highly successful company into the ground.

Pricing isn't a science. It's more of an artwork. It isn't about the intrinsic value of something. It's about the perceived value. If you think you're underpaid you are likely to seek employment elsewhere. If you feel you're well paid, you will stay.

Washington State is home to two companies that pay their employees more than the average wages and benefits of similar companies. Both are successful

The first is Dick's Drive In. Probably the most popular fast food restaurant in the Seattle area. The second is Costco.

Seems to break the OP's premise.
 
Better for who?

It's best if people are paid appropriately. But what the hell does that mean?

As someone who negotiated product prices multiple times every day, I can say that this is more about perception than anything else. Everyone wants a good deal.. That means employers, employees, customers whatever.

I quite agree. As a lazy engineer, my goal was to improve designs and create new ones that the company could profit more from. Being lazy, I worked to make my designs powerful but as simple as possible (but not simpler).

Companies try to improve their bottom line. They look at costs, they look at sales. Anything to improve that equation. A good friend of mine inherited his father's real estate company. At that time, they were the largest residential real estate brokerage in the State of Washington. My friend took it over and proceeded to screw it up. He thought that he could make more if he paid his brokers less. The best of his brokers went elsewhere and sales dramatically decreased. My friend drove his father's highly successful company into the ground.

Well, when you have incompetent leadership, the results are pretty much written in stone.

Pricing isn't a science. It's more of an artwork. It isn't about the intrinsic value of something. It's about the perceived value. If you think you're underpaid you are likely to seek employment elsewhere. If you feel you're well paid, you will stay.

Generally true but I've seen marginal people that were overpaid but thought they were underpaid. They were encouraged to leave.

Washington State is home to two companies that pay their employees more than the average wages and benefits of similar companies. Both are successful

The first is Dick's Drive In. Probably the most popular fast food restaurant in the Seattle area. The second is Costco.

Costco is a well run company from everything I see. I shop there a lot.

Seems to break the OP's premise.

Not really. I've always thought that a company's perceptions (and reality) should be that I'm worth more to them than I'm paid. My goal was always to increase my value and get raises/promotions as a result. But always getting paid less than my value to the company.
 
Discussions such as this remind me of specific incidents, most of which I can't talk about here. I think I can get away with being a bit vague with these two anecdotes.

Many years ago, an ex-colleague of mine worked for a company that devoted two IBM mainframes, each costing more than a million dollars, to a specific computational task. As the company's business prospered, that task grew as well, forcing the company to prepare to purchase and to dedicate a third mainframe to the task. My ex-colleague analyzed the software those mainframes were running and found several examples of inefficient algorithms. Replacing just one of them with a more modern algorithm saved the company from having to buy a new mainframe. With just a few weeks of work, she saved her company over a million dollars that year.

During roughly the same time period, at a different company, a vice-president called me out of the blue to complain that one of my employees had been making a pest of himself by urging engineers in that VP's division to adopt a technology that all of that division's competitors had already adopted. I said I could understand why the VP resented the employee's interest in the success of the VP's division, but I wasn't going to tell the guy to stop, because he was absolutely right about what the VP's division needed to do. I'm sure the VP was getting a similar message from others, but he reacted as though he wasn't used to hearing that message. A few months later, his division adopted the technology. Although they were late to the party, that division's adoption of that technology allowed it to stay in business for many years. According to public reports, its adoption of that technology must have been worth something on the order of a billion dollars.
 
I agree the the market is probably not totally efficient at pricing labor, but my question remains: how else would you do so?

Your example doesn't show the worth of a single farmer or water treatment guy, but rather the aggregate of all farmers and all water treatment guys.

When someone is looking for a job and they ask themselves what they are worth, they're usually using shorthand for asking what they're worth in the market. What else would it be? Worthington's Law?

I was sure I replied to this, but it looks like I didn't. Must have not clicked submit.

Ultimately, you're right. Your value is relative to what someone else will do the same work for. It doesn't matter what you bring in to the company if there is some dude that will do the same thing for less, so your value is usually based on having unique talents or aptitude or training or whatever applies. A water treatment guy might be physically keeping you alive, but he can be replaced by some other guy with a brief training course to become that cog in the machine.

What always stood out to me in the value of any given worker are their people skills, no matter what they actually do. If you're pleasant and a bit of a charmer, that can outweigh your actual work skill. I'm in construction, and we're dime a dozen, but a lot of my customers will wait for me specifically because they feel comfortable with me personally, especially when given free access to their homes. So my actual value is less related to the quality/quantity of my work, and more that I (give off the impression, anyway) am trustworthy.
 
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