If the value produced to my company by a software engineer is below the market rate for a software engineer doesn’t that just mean I shouldn’t want to hire a software engineer? Like if I run a performing orchestra I probably don’t want to hire an anesthesiologist at market rates because they will provide very little (if any) value to my business.
No, you can be existentially important to the company and still not produce market rate worth of value.
Example: Virtual Widget Co has one employee. The company makes $120k/year in revenue (and so max cap for compensation is ~100k/year because of whatever other costs). If the employee leaves, the company would not be able to continue and will fold. However, the employee is one of the 10 from my previous example, to minmax their own income they should leave the company despite being indispensable to it/the company folds after they leave. No other qualified person would apply for this job either. In fact, it might even be that the average unqualified person’s wage is far below 100k but even that doesn’t help.
A better statement would be “Virtual Widget Co shouldn’t exist because it doesn’t have a viable business proposition”. But this can be counterintuitive in the context of 40% unemployment (4 out of 10 in my example). A more real-world analogy would be “lots of businesses are viable only in the presence of slave labor.”
