Regardless of your religious beliefs, most people have likely participated in a gift exchange within the last few days. A gift was purchased, which meant the giver had to give something up — money — to the store. In exchange, they received the gift because the seller gave up inventory. The giver then chose not to keep the gift but instead gave it to someone else — the receiver. The receiver is the only party who doesn’t give anything up; their sole action is to accept the gift.
This concept got me thinking about the workplace. An employee gives up a portion of their time, and in return, they receive payment. The employer gives up cash because they receive labor to create products or services they sell to customers. Customers, in turn, give up cash to receive those products or services. I remember, as a young man, my mother and father explaining the basics of commerce to me: “Business is no more complicated than people working with people called colleagues, and other people called vendors, to serve other people called customers. Money is just the fruit that falls from the tree when we do it well. Oh, and get that mullet cut!”
I also found it interesting to study the history of the word “pay.” We talk about a “paycheck” or “being paid,” but where does the word “pay” come from? It means “to appease, pacify, or satisfy,” derived from the Old French word paier, which literally means “to make peaceful.” When an employer pays an employee or vendor, they are, in effect, “making peace” in exchange for the labor, goods, or services received.
We often hear complaints about minimum wage. My innate response is always to ask why people don’t put in maximum effort so they can move beyond minimum wage. Employers will only pay a wage based on what they believe a unit of time is worth to them. A basic skill will earn a basic wage, while enhanced skills will earn higher rewards. I’m no great economist, but it seems to me the macro picture is that, in a free market, consumers will only pay so much for a certain product or service. The employer must then calculate backward, using processes and labor as efficiently as possible, to generate a profit for the shareholder.
The company then pays taxes on its profits, and the shareholders also pay taxes on any dividends or capital gains they earn when selling stock. Taxes go to the government, which, hopefully, spends the revenues wisely. It seems to me there’s a lot of giving and receiving that makes the world go round.
As employees, we receive what we give — we earn exactly what the employer is willing to pay for the time and effort we contribute. If we believe we’re worth more, we may choose to leave that employer and “make peace” at a higher level elsewhere. Likewise, employers give what they receive — paying what they believe a unit of time is worth based on the task and the level of discretionary effort offered. Employees, employers, and shareholders then “appease” the government by paying taxes — and we know the IRS doesn’t like it when we fail to make peace with them!
Returning to the receiver of a Christmas gift: If we analyze this exchange in a business context, that person didn’t do anything to receive the gift — or did they? We give gifts to people we love and care for; it’s their love for the giver that inspires the act of giving. In the spirit of Christmas, I’m awed by the realization that I’ve received the Ultimate Gift, and all I’ve done in return is love the Giver. What truly amazes me is that the Giver loved me first! Can you wrap your mind around a gift exchange like this, one that makes peace between the two parties?
I wish all my readers a Happy New Year. Writing for you brings me joy, and I’m deeply grateful for the encouragement many of you have given me—it’s a gift I truly appreciate.
Paul Butler is a Santa Clarita resident and a client partner with Newleaf Training and Development of Valencia (newleaftd.com). For questions or comments, email Butler at [email protected].
