Salaries are no more than a cost of labor. Someone is paying a worker to provide a service to them. The employee is a seller and the employer is a buyer; its that simple. A buyer is always going to shop for the lowest price he can get for a product. We all do it, whether buying a tube of toothpaste or buying the skills of a carpenter to build a deck or an accountant to prepare tax returns. What an employee is selling is his ability to do a certain type of work but it is no different than selling any other product or service. So if you're the type who thinks all bosses are jerks, don't forget that when you go into 7-11 to buy a cup of coffee, since you're paying for all of the work of the people who went into getting that cup of coffee into your hands all the way back to the farmer in Costa Rica, you are also that jerk of a boss. When you go to the doctor, you become his boss because you pay him for the medical knowledge and care he's giving you.
Welcome to being the boss, jerk!
The point of all this is that employee/employer are really just different words for seller/buyer. The only difference is that, in general, employment relationships are more long term and often contractual. So welcome to the world of whoredom! You and I are whores selling ourselves! Hopefully you will think twice now before you criticize a prostitute. But I digress....
When you are out on the job market, you are looking for a customer to sell your skills and abilities to. The job market is a market like any other, subject to the same rules of supply and demand and you and your ability are the products. Two factors will determine how much you will be paid:
- How much does the customer want it? (market demand)
- How hard is it to get? (availability)
Remember...it ultimately come down to what the customer (the employer) wants, not what the seller (employee) thinks the product is worth. I can try selling my old Lucky Lefty Carmichael baseball card for $500 bucks but I am not likely to get it because no one really wants it but I can easily get $100,000 for a 1933 Goudey #53 Babe Ruth. People want the babe, but they don't care about Lucky Lefty. You may think you're worth $100,000 a year but if all you can do is hang drywall, you're unlikely to get it. How hard the work is has absolutely nothing to do with how much someone is paid for the work. This about it; wrestling a polar bear is hard, dangerous work and is far more difficult than negotiating a divorce but most of us would not pay someone $2000 to wrestle the bear. Most of us will pay $2000 for a good divorce attorney to protect us even though the polar bear wrestler is risking his life while the divorce attorney won't even break a sweat.
On to the second factor is the question of scarcity...how hard is it to get your product (an employee who can do what you do). The other reason the #53 card is so valuable is because there are so few on the market. Poeple want them badly and they are hard to get so customers are willing to pay alot for them. If all you can do is hang drywall for a living then you are easy to replace because hanging drywall is a low skill job and so anyone can do it. Basically, they are a dime a dozen.
Look at the examples below to see how this plays out:
Lucky Lefty Card - Low Availability - LowDemand - Low Price $.02
#53 Babe Ruth Card - Low Availability - Very High Demand - Very high price $110,000
Lawyer - Moderately Low Availability - High Demand - High Price $120,000 avg
Mechanic - Moderately High Demand - Moderately Low Demand - Moderately Low Price$35,789 med
Bank teller - High availability - Low Demand - Low Price $23,000 med
Fortune 500 CEO - Extremely Low Availability - Extremely High Demand - Extremely High Price $4,000,000 and up
The bottom line is that if you're skills are hard to replace and needed on the job market, then your salary will be high. If you don't have skills or your skill is easy to replace and no one wants what you do anyway, you're pretty much guaranteed to make very little money.
So get educated on hot skills and then learn those skills!
