[lotsofpulp]

Similarly, the replacement cost of a new employer is also high for an employee if they have a family and don’t want to move and/or can’t gamble on the conditions at a new employer. I would say thaumasiotes is correct in saying an employee is paid what it would cost to replace them, in 99.9% of cases. Of course the buyer takes risks such as not finding as good of an employee, cost of training, legal risks of terminating or hiring, and the cost of the message it sends to others, but it’s still the same concept.

No buyer wants to pay more than they have to, hence when the value an employee adds is commoditized, you see that they get paid exactly what it costs to replace them, hence the minuscule pay and terrible work conditions of retail, restaurants, and hotels.