I’ve never met someone in HR who keeps track of the marginal product of labor.
In the real world (like outside of an econ textbook) employee pay has little to do with actual productivity and a lot to do with how little employers can get away with paying you.
Employers don’t want to pay workers for their actual output per hour anyway.
Further, employers have an asymmetric advantage negotiating for salaries in the first place.
Perfect information is a necessary condition for a free market–and yet employers have (and closely guard) essential information about worker productivity.
After all, how can employees even bargain rationally for higher wages if/when employers have employee productivity data and employees don’t?
I’ve never worked for any company which disclosed my actual monetary output per hour.
Without knowing their precise productivity, workers enter negotiations with employers at a major disadvantage.
Also, horizontal mergers and rampant monopolies and oligopolies have intentionally weakened free market competition for labor.
There is no free market. Business doesn’t want a real free market. They don’t want to compete if they don’t have to.
Our labor markets are broken. Capital ain’t gonna fix it.
(For my extended thoughts on the myth of free markets and how monopolies and oligopolies have created dysfunctional markets for labor–and huge profits for billionaires, read this).