There Are No Wage-Slaves or Wage-Masters

Over at Ask a Manager, Alison Green fields a question from the owner of a small business who is concerned about apparently having no "leverage" over a star employee who "doesn't work for the money, but works because she loves the job."

Green's answer to this concern is nearly perfect:

A wage is an agreed-upon price for work. It is not the fence to a labor camp. (Image by Gerald Praschl, via Wikimedia Commons, license.)

You should manage all of your employees as if they don't "need" their jobs and have other options -- whether those options are family money or the ability to go out and get another job with their skills.

There are two reasons for that:

1. Assuming you're hiring good people, it's very likely they do have other options. It might be a pain for someone to leave and find another job, but generally it's something people are able to do.

2. Using someone's paycheck as your primary leverage might be effective in the very short-term, but it's rarely a way to build or retain an engaged, invested staff in the long-term.

The way you motivate someone who doesn't need the money is the same way you should motivate people who do need the money: by giving them meaningful roles with real responsibility where they can see how their efforts contribute to a larger whole, giving them an appropriate amount of ownership over their work and input into decisions that involve that work, providing useful feedback, recognizing their contributions, helping them feel they're making progress toward things that matter to them, and -- importantly -- not doing things that de-motivate people (like yelling or constantly shifting goals or generally being a jerk). [bold added]

Green is absolutely correct: This employer is thinking short-range and missing lots of context by zeroing in on just the financial transaction between employer and employee. In fact, the implicit alternative here, of an employer treating an employee like a trading partner versus a near-slave who would die without alms reminds me of the common, wrong-headed phrase wage slavery.

That phrase makes a common mistake that novelist and social critic Ayn Rand cautioned against:

A disastrous intellectual package-deal, put over on us by the theoreticians of statism, is the equation of economic power with political power. You have heard it expressed in such bromides as: "A hungry man is not free," or "It makes no difference to a worker whether he takes orders from a businessman or from a bureaucrat." Most people accept these equivocations -- and yet they know that the poorest laborer in America is freer and more secure than the richest commissar in Soviet Russia. What is the basic, the essential, the crucial principle that differentiates freedom from slavery? It is the principle of voluntary action versus physical coercion or compulsion.

The difference between political power and any other kind of social "power," between a government and any private organization, is the fact that a government holds a legal monopoly on the use of physical force.

Rand elaborates elsewhere that all a businessman can do is offer money for work, take it or leave it. That is hardly the same thing as the ability to, say, send someone to the Gulag.

Green's answer is a nice demonstration of just how different a "wage" (i.e., the price the employer pays an employee for his work) is from chattel slavery, and why.

People need to work to live, but they do not need any particular work. This fact creates options -- for employees and employers alike -- that the myopic focus on pay obscures, as Green amply demonstrates.

-- CAV