We hear it often: “Everyone deserves a living wage.” And yes, in a fair and just society, no one working full-time should struggle to meet basic needs. But here’s the rub—when it comes to what someone earns on the job, the conversation has to go beyond ideals and move into the realm of value creation.
Wages, at their core, represent a trade: time, effort, and expertise are exchanged for money. The more value a person brings to the table, the more that exchange is worth. That’s why raises and promotions should be tied not to tenure or external mandates but to results—tangible contributions that impact the bottom line.
This is the same advice I’ve given my own children. When they used to ask me, “How do I ask my boss for a raise?” I always respond with a series of simple but crucial questions:
What have you done that made your boss more money?
Did you learn a new skill that makes you more valuable?
Did you streamline a process, cut costs, or increase revenue?
Are you making life easier for your employer in a way that drives profit?
If you can’t answer “yes” to at least one of those questions, you’re probably not in a strong position to ask for a raise.
This concept may seem harsh, especially in an environment where discussions about wages are emotionally charged. But it’s a perspective that more employees—and frankly, more employers—need to understand.
Unfortunately, our school systems don’t teach students how the economy truly works. Most kids graduate with no understanding of profit margins, value creation, or how their role as an employee fits into the grand scheme of a business. They may have heard terms like “living wage” or “minimum wage,” but they rarely grasp what actually fuels wage growth: contribution.
That’s where employers have an opportunity—and a responsibility. Business owners can and should educate their teams on how business works. When employees understand how the company makes money and what levers drive profit, they can better align their actions with company goals.
This education doesn’t have to be complex. In fact, a simple walkthrough of your business model and profit drivers can go a long way. Help employees connect the dots between their everyday tasks and the company’s financial health. Show them how reducing waste, improving efficiency, or upselling a service contributes to profitability—and, in turn, to their own earning potential.
When employees start to see their roles as active contributors to business success, they become more engaged, more innovative, and more motivated to perform. That’s when they start earning raises, not just expecting them.
Do your employees understand how their efforts contribute to your company’s profitability? If not, it might be time to change that. Because when your team sees the connection between their actions and the bottom line, everyone wins.
