No, the mechanism is clear. What I don't understand is your use of the word fallacy. It is not a fallacy, it is the reality. Being an employee is not an ideal. It is the lived reality for most people.

So what are you going on about?

I've has similar discussions multiple times. Each time it boils down to one of these arguments:

a) "You're not forced to do it, you chose it so it's consensual and therefore right."

b) "The value of your work is determined by how much you managed to negotiate."

The issue with a) is that consent has to be informed and between parties with similar bargaining power, neither is true in an employer-employee relationship. Also choice from a limited set of options where some have large artificial upfront costs is not the same as 100% voluntary free choice.

The issue with b) is that the product (both the output sold to customers and the organization producing the output which can be sold by the owners) have value. This value is independent of the negotiated compensation for work.

Hence, arguments ignoring these issues are fallacious.