> Why would an employer ever start a business if he had to pay every dollar of "profit" to the employees? No one, ever. Maybe, on a technicality, the founders

> Why would an employer ever start a business if he had to pay every dollar of "profit" to the employees? No one, ever. Maybe, on a technicality, the founders of 501(c)(3)s. I didn't use the word profit. > Besides, who is to say what that productivity to the employer is? The employer is to say the productivity of the employee. They won't do this explicitly, and it's very rarely a value that could be directly calculable. This could be a case where I'm not using the best possible term. When I say the "productivity to an employer" of an employee, I'm actually talking about the value to the employer (http://en.wikipedia.org/wiki/Value_(economics) http://en.wikipedia.org/wiki/Value_(economics)). One way to answer the question of what the productivity of an employee is would be to ask this question: "Were there only one laborer remaining unemployed, and they were free to name their salary, what is the maximum price that I would be willing to pay someone to perform this work?" >If I start a grocery business and hire you to work the cash register - it's pretty easy for you to see $5k/day come through the drawer and think, "I'm responsible for $5k/day." See above. All of this is from the employer's perspective. It doesn't matter what the employee thinks their "worth" is; what matters is what value the employer gains from the relationship. > Your "productivity" is actually what you negotiate for your salary. My productivity as the business owner is what's left after all my costs including your salary. This actually hits at my key point. Your "productivity" is actually your VALUE. What you negotiate for your salary is your PRICE (http://en.wikipedia.org/wiki/Price http://en.wikipedia.org/wiki/Price). I argue that these two are not necessarily coupled. Further, I suspect in the current U.S. economy at the low-income end of the job market these _are not_ coupled. EDIT: Changed the final sentence from "I argue...that I suspect" to simply "I suspect...".