"They pretend to pay us, we pretend to work"
December 25, 2020
How much does a company pay to its employees? Whereas there are some well known firms for their good paying salaries... how well do the vast majority of companies pay?
I always believed companies, in general, would try to pay employees the minimum amount so they stay in the company. Regardless of merit or hard work. At least for low education jobs or new entry level. In other other words, firms would try to pay the minimum amount that the workers would accept. You can easily imagine why this would not be the best approach and how employees would feel about it. Basically, there is no panic in losing a job you feel you are being underpaid for, and for the same reason you are not going to fight much or go the extra mile, at least not voluntarily.
This is not what companies really want. As the book "Good economics for hard times" ingeniously points out, there is a Soviet joke: "They pretend to pay us, we pretend to work."
This logic says that the wage the firm must pay to their workers has to be high enough so that being fired actually hurts, the so-called by economists, efficiency wage. And this makes way more sense. Not only receiving more money is a a direct form of appreciation for your efforts, the prospect of losing that job and struggling to find a similar paying one is undesirable.
How do you feel in regards of your salary?
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I need to lose some weight