> every dollar the boss keeps _is_ a dollar that the employees don't get and the boss is the one deciding how much both sides get.

I've thought a lot about this over the past few years. There's definitely a difference between being an owner and an employee. An owner lives with a whole different level of stress and risk. An employee has a choice to work for an owner, or go work somewhere else, or become an owner by starting a company.

I'm not sure where the balance of power between business owner and employee is determined...it's fairly complex.

Owners become employees when they accept too much outside investment. They become employees of investors...and investors buy ownership.

I think the balance of power is primarily affected by two things: 1) Barrier of entry into starting a business, such as laws that inhibit/regulate small businesses, or independent workers (owners) 2) Regulation that gives bigger businesses an inherent advantage over smaller businesses, such as limited liability, indemnification, bnakruptcy, mandated group health insurance plans, etc.

Sure, an owner can make 1MM per year and only pay the employee 100K.

But I think the question we really need to understand is, what's stopping the employee from quitting and starting his own company? I don't know the answer.

There is also a lot of pro-management literature that defines a work culture where employees should be loyal to their company, boss, etc., give two weeks notice when quitting, among other things that psychologically disenfranchise employees.

In reality though, at least right now in the tech industry, if you don't like your salary, job or work environment, it isn't hard to re-tool and find a new job...

In blue-collar/unionized industries, it might be totally different. I don't totally understand the work cultures of other industries, especially lower paying ones.

Obviously you might leave after a few years of really unfair bonuses. But truly, they seem a little disconnected from regular market forces.

Everyone knows that if you go work for e.g. Google, you're getting a certain base salary, plus a bonus package (plus options/RSUs, plus free food, plus a lot of things). People consciously subconsciously price these in as much as they can. Of course if bonuses are variable it's harder to price them, but the same can be said of stock grants in companies. And no one can afford to ignore those - they can in practice make up a huge part of your pay package.

Well, you're correct. If the bonus is unacceptable, the employee can just quit. But a year of work (or more if it's event based instead of annual) is a big opportunity cost to find out that info.

In other words, employees never take an unexpectedly huge bonus to the chagrin of the employer. So there is a power imbalance there.

It at least partially is. The employer needs to meet reasonable expectations and any commitments they made.

The boss/employee relationship is an interesting one as well. If the boss is a self made entrepreneur that built his/her company from scratch and lived by the skin of their pants for years, then I believe it should be their decision as to how much of every dollar coming into the company goes into their pockets.

I would also assume that being successful from those beginnings would indicate that they are shrewd business people, and that they can figure out a ratio of boss/employee allotment that would be fair and also be beneficial for future company growth and reinvestment.

Why would the boss give anything to the employees then? I think you’ll find that the employees decide how much they want.

Employee signed the contract out of his own free will? Then no, the boss is not the only one who's deciding that.