Quote Originally Posted by Magic Poriferan View Post
If I get the job (typist), I'd make more money than my father ever made. This job, however, is substantially easier to do than what he did for the prior 20 years to him being laid off (wood worker).
Quote Originally Posted by jwn86 View Post
Pay is determined by how the budget trickles down, not up. Budget is allocated based on production value. Now, this is not a hard and fast rule and it's unwise to think of the economy that way because people commonly do what feels best to them regardless of how wise it is.
Quote Originally Posted by FDG View Post
Sorry but supply and demand doesn't really work that well in the job market. First of all, there are thousands of ceilings (min wage, cap salary, etc.). Secondly, search costs are terribly high thus both employees and employers have a tendency towards a suboptimal equilibrium. What Bamboo said is correct, IMHO: it's just about how much someone is willing to pay you at any given time, the drivers of this pricing process are hard to know, especially if we want to construct a universal frame of reference.
Quote Originally Posted by Bamboo View Post
The pay you can get for a job is what people are willing to pay for it. Supply and demand is a driver here, but I wouldn't assume that all pricing decisions are rational (or precise) ones - that's just the theory.
I think all of you guys hit on what I was thinking:

1. The salaries trickle down from the budget. In fact, I know quite a few people who work in the same industry, with the same job title, and their salary is pretty consistently within 5% of the same x% of their companies budgets (back of the envelope calculation of their total budgets). Their company budgets vary vastly, but the x% is pretty consistent. Rather than bidding wars and low balling wars (supply and demand), this willingness to earmark x% of the budget seems to be the driver in my small anecdote.

1.b this would explain why some careers that use the same skills, end up making WAY more money just by the virtue of playing in a bigger sandbox (investment banking/company underwriting vs commercial real estate sales/underwriting).

2. People pay what they are willing to pay. This sounds obvious, but a less than obvious conclusion is that some people are only willing to pay for "merely adequate". Teaching, for example, seems to be one of those jobs where being an "adequate teacher" would be pretty easy, yet being a great one kind would be kind of hard... but they all get paid like "adequate teachers", because thats what people are willing to pay. People are very wiling to pay for doctors, and so both the merely adequate and the great ones, make a lot??? I'm just thinking out loud and probably overgeneralizing here...