In other words, you're paid at the intersection of Supply and Demand curves, i.e. the Law of Supply and Demand.
How much a company is willing to give you is based on the value you create. Companies are not going to employ someone who costs more than the value they produce. If the person creates far more value than they are paid, then the person is apt to find someone else who will pay more.
Your pay is upper bounded by the value you create, but may be arbitrarily less, especially if there is monopsony, high barriers to moving/reskilling, and/or collusion among employers.
There's nothing inherently fair about the "intersection of Supply and Demand curves" because employers manipulate them both -- by lobbying for increased immigration, reducing competition through mergers&acquisitions, erecting legal barriers for competing businesses, colluding to depress wages, and reducing incentive to compete via common board membership & equity ownership.
That’s funny, the local McDonalds is paying $17 an hour when 2 years ago it was probably paying $10.
I’m with you on the immigration front. The local town’s largest employer almost exclusively employs immigrants in the plant. If they had to pay wages the rest of the town would want to do that job, it’d probably be what the hourly workers in the office next door make. They’d want more then, which would mean the salaried people would also want more. Instead the entire town’s wages are suppressed.
> How much a company is willing to give you is based on the value you create
Value in collaborative settings is extremely difficult to measure. How much is that DEI officer worth? The corp lawyer who, being honest, is not doing any high stakes work? The team lead who doesn't write code? The careful, slow IC vs the fast, sloppy IC? It's all guesswork.
The catch is that the company often knows more about your value (monetary, not personal) than you do. And they're often more experienced negotiators than you. So as a perspective employee you're normally at a disadvantage, unless you're at the tail of the bell curve or in a very in demand field.
Most companies are happy to pay you way less than you're worth if you'll accept it.
As an engineer I'm used to all the facts going on the table and then reaching a consensus. That's not how hiring works, the employer won't show you their cards. They ask how much you made in your last job, but they won't tell you how much the employee that left the position you're applying to was paid.
Employees don't show all your cards, either. Employers misjudge candidates all the time. That's how they wind up with deadwood, quiet quitters, thieves, drug addicts, etc.
I've had many, many people brag to me how they lied on their resume. Many have shameless posted here how they cheated their way through college.
Employees have the ultimate power - they can just say "no".
Supply and demand also applies to expertise, so it's hard to see how it can be any other way. There's an infinite amount of information in the universe, so there will always be someone with more 'cards', more intelligence, more cunning, etc., then you in a large enough sample size.
How much a company is willing to give you is based on the value you create. Companies are not going to employ someone who costs more than the value they produce. If the person creates far more value than they are paid, then the person is apt to find someone else who will pay more.