At Hamill Manufacturing of Pennsylvania,highly skilled senior machinists are paid $70,000,excluding benefits,but the average skilled machinist generates approximately $137,000 in value added.This difference means that the marginal productivity theory of income distribution doesn't hold.

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The marginal productivity theory of income distribution suggests that the income of a factor of production, in this case, labor, is determined by its marginal productivity. The fact that machinists at Hamill Manufacturing generate significantly more in value than they are paid is consistent with this theory, as it implies they are being compensated at or below the value they add, which is a core principle of the theory.

At Hamill Manufacturing of Pennsylvania,highly Skilled Senior Machinists Are Paid