Victoria 3 – Average Wages Guide

How to deal avoid high average wages.

Guide to Average Wages

All credit goes to Mr_Darkmane!

Key Points

To keep wages low, the aim is to have enough workers and make sure they are literate/qualified.

Buildings will raise wages to compete with other buildings for workers, but only if they would still be profitable.

We should not worry about individual buildings losing money, as it is part of the game balancing itself. These buildings will reduce wages and employees to become profitable.

Relevant Sections From Dev Diaries

Originally posted by Dev Diary #11 – Employment and Qualifications:

Buildings adjust their wages over time in order to achieve full employment with minimal wage costs. As employment increases, so does the Throughput – the degree by which the building consumes input goods and produces output goods. By the laws of supply and demand, this makes a building less profitable per capita the closer to full employment it gets, so at first blush it might appear irrational for a building to pay more wages just to reduce their margins. But since a “building” does not represent a single factory but rather a whole industrial sector across a large area, and we assume the individual businesses in that sector compete with each other rather than engage in cartel behavior to extort consumers, this adjustment of wages to maximize employment makes sense. However, buildings won’t increase wages due to labor competition if this would cause them to go into deficit, so there’s little point to expanding industries beyond the point where they’re profitable.

Originally posted by Dev Diary #11 – Employment and Qualifications:

Employees are hired into available jobs from the pool of Pops that already exist in the state, but unless they’re unemployed these Pops will already have a job somewhere doing something else. Pops can be hired under two conditions: first, they must be offered a measurably higher wage than the wage they’re currently getting from their current employment. Second, unless they already work as the required Profession in another building, they must also meet the Qualifications of that Profession to change into it.

Originally posted by Dev Diary #11 – Employment and Qualifications:

Wages are set by individual buildings in response to market conditions. A building that is losing money will decrease wages until it’s back in the black. A building that has open jobs it can’t seem to fill will raise wages until it either fills the necessary positions or runs out of excess profits. As a result, different buildings in the same state will compete for the available workforce. What this means in practice is that a large population with the necessary Qualifications to perform all the jobs being created in the state will keep wages depressed and profits high. Only when industries are large or advanced enough that they need to compete with each other for a limited pool of qualified workers are wages forced to rise. This rise in wages also comes with increased consumption, which increases demand for goods and services that some of the same buildings may profit from in the end.