The wage employee will be paid is some baseline plus or minus how much the bargaining power employee has. The baseline wage is determined by how much a person

The wage employee will be paid is some baseline plus or minus how much the bargaining power employee has. The baseline wage is determined by how much a person with such characteristics is being paid in the industry for similar work in a given country, state, city. Usually, such characteristics should be limited to things like education and prior experience. In practice, they can include immigration status, nationality, current physical location, and other things that can be perceived as unfair. By how much employees' income will diverge from this baseline is determined by the bargaining power and bargaining skills. This includes anything that can convince the employer to pay more. For example, if you currently have a job you may be less desperate to get a new job, meaning you can refuse a bad job offer more easily. If your status in the country is uncertain and you can't work legally in the country, regardless of how educated or skilled you are, you don't have as much bargaining power and you can be paid four to five times less than a citizen. What I'm getting at is that in reality, employee's income is not determined by the product of labor he produces. It is determined by what similar others are being paid for similar work and bargaining. Usually, the lower bound is minimum wage and the upper bound is the company's income.