Pay secrecy: Why some workers can't discuss salaries
bbc.com
bbc.com
I'm also proud to work in Massachusetts, where it's illegal for prospective employers to ask about your prior job's salary. This harms workers by pegging future comp to past comp. It's particularly destructive to women and people of color. There are sneaky ways for employers to circumvent this law - I've written a blog post before about how this happens: http://cushychicken.github.io/what-to-say-when-asked-salary-...
Discussing salary is, in my view, one of the last major bits of power retained to workers in the US. It is also one of the only labor rights that the government has meaningfully protected.
Talk about your salary with others. It's an important behavior to normalize, and a powerful way to help spur pay equity in this country. It's one of the easiest ways to push back against the information asymmetry that most corporations naturally exploit. (Though I suspect this is almost purely out of self interest, and not any real malice.)
> Disclosing your salary can turn a potential double digit raise when changing jobs to a few percent raise. You could leave thousands, or even tens of thousands of dollars on the table.
But isn't it possible for this to happen in the opposite direction? I.e., turning a pay cut into a small raise.
You would have to be a complete and utter moron to truthfully relate your current or former pay history to a potential employer.
There are two primary things that they are doing when they ask for your salary history:
1. They want to know whether they can get you for cheap
2. They want to know the rates that the market is setting for a person of your talent level
You never have to be truthful about what you were paid and why you left unless you are in a profession that requires such information to be disclosed.
Add 20% and let them negotiate you down to what you are willing to move for. Any employer that isn't competent enough to price your talent versus the market is an employer who will screw you over in the future.
Talk to recruiters like you cultivate mushrooms.
Feed em shit, and keep em in the dark.
I have that number ready so that if I mention my previous salary I have a number that amounts to the value of my current or previous job to me to set the base for the upcoming one.
Example: If your salary is $25/hr with 2 weeks PTO and other Perks valued at 5% annual salary (401k matching, health insurance, work perks like food or discounts, etc.) That is $52k + $2k + ~$3k = ~$57k rounded up to $57.5k is the "Previous" annual salary I would represent.
That poses you as someone who would "jump ship" for $60k + similar benefits when in reality it would be a 15% pay raise to have the same benefits + an additional $8k a year.
It's a win all around. The recruiter thinks they're getting a deal, you know you're getting a deal, and everyone is happy and no one is the wiser.
It is, but that's only something that can happen when you allow the company to make the first offer.
If they do, and they undershoot your current comp, it likely means that:
* they have no idea how to price your skills against the market rate,
* they are strapped for cash, and trying to get you at a bargain price, or
* they are simply trying to lowball you and see what you do.
You can counter by saying something to the effect of "Thanks, but that represents a pay cut for me, and that doesn't make financial sense for me right now." An honest mistake will result in them hustling to redo the offer to your liking. I don't know thst I've ever seen an honest mistake of this kind from a recruiter. They simply have too much data for me to believe that.
None of these scenarios are a great look for a company that wants to recruit you. Seeing these from a company offering me a job leaves me pretty hesitant to work for them. To me, it telegraphs either amateurism, or bad faith negotiations.
The one exception to this - and, I gotta say, this tradeoff has never made financial sense to me, personally - is to take a pay cut to work at a startup. At that point, you're swapping pay for the opportunity to learn or advance your career in some other way.
Instead of othering the other poor, by just talking about the working poor, there is more likely to be progress for the poor.
I'm firmly of the belief that poverty is intersectional to the discrimination of women and non-white people in the USA.
The data bears this out. Salary data about these demographics suggest that women make about 60-80% of what a man is paid for similar work. People of color - particularly Black men - are in a similar position.
This is certainly not an issue solely confined to the working poor, either. It transcends class boundaries. It just happens to impact low income women and POCs more severely because it means they're batting from behind on two fronts instead of just one.
> Recent years have also brought more clarity around best practice on transparency: many workers favour a non-specific kind of salary disclosure where firms reveal ranges, averages and information about wage gaps rather than individual data.
The branch of this problem tree I speak of intersects more like "OK the band for level 3 is 50k-60k USD. Mark makes 60k and I make 50k but I feel my work is better than his and I've been here longer." This article is mostly about individual sharing, I think that quoted part is a nod in context to the other branch of the problem root which is just as important in it's own way. Not the best at making up examples, sorry.
Seems like it at least gives you some metrics to compare to rather than just favoritism.
N.b. This was just random employees collecting volunteered information, nothing HR-sanctioned.
Things will never be exactly equal. Why focus time emphasizing the differences?
Why remain ignornant, and potentially lose out on acertaining one's true market value, because it might hurt someone's feelings?
Price discovery via markets can only work with transparency. Opaqueness leads to inefficiencies.
If you're at a crappy company with crappy managers, then yeah maybe you just need to play politics until you're paid enough to justify not quitting. If you have the means to move on from a job you don't like, though, you should probably work toward fixing that regardless of the compensation.
It depends on how much equity. If you have a greater percentage of ownership than you do of total salary, that makes sense. (Unless it's publicly traded, because then you can buy more stock with the more money.) But that seems unlikely most of the time. So, yes, it's better for founders or major shareholders.
I don't follow that asking for more money is "playing politics"
If your compensation doesn't accurately reflect your merit to the company, then it instead reflects arbitrary social power dynamics. If you stick around somewhere that you believe is taking advantage of you, and try to up your pay through leverage or non-merit based arguments, then that definitely seems like politics to me.
Just asking for money if you think you deserve it isn't inherently politics, though. If you're genuinely being underpaid and think the company is dropping the ball but acting in good faith, then having an honest conversation with your manager is healthy, and should result in the situation being resolved favorably.
If you accept a job, wait a year, then start interviewing at least one interview every 6 months. You'll improve your interviewing skills and learn your market value.
What your coworkers make at your current job is not a strong indicator of your market value. What actual employers are willing to pay you is much better data.
Don't forget, a huge component in salaries is social skills.
And if it so happens that you earn less as a result of gaps in your skills, you should own it and work on yourself.
This line of thinking leads to interesting conclusions:
- people will never live forever, why heal them
- discrimination will always exist, why fighting it
- efficiency will never be 100%, why improve it
- universe will end with heat death, why do anything at all
I would have thought that the desire to know if you're being treated fairly is universal. You really wouldn't mind making a fraction of what your coworkers make?
One of the first few things we learned about him was that a clause in his contract forbid him from discussing our salaries and working conditions with us.
Long story short, I switched jobs shortly after because we were doing a lot of unpaid overtime, and tons of things that had nothing to do with a software developer's job.
But the straw that broke the camel's back was that we found out every engineer had a different contract -different salary, bonuses, etc.-, even when we had similar experience. The director's boss thought we wouldn't find out just because of that silly clause.
If you are being asked not to discuss your salary, apply Occam's razor, and either deal with it or run away.
I was wondering if that kind of clause is a common thing in the US - for instance limiting job mobility by not allowing you to work for X client for N years is common in Europe, while I get it's rare in the US from what I read on social media / HN.
They were unable to discuss salary (or any personal financial matter) because of that security. The reasoning being it potentially opened them up to being "turned" by foreign state actors either via financial bribes or financial blackmail.
IOW, IT worker in the GP’s post was making something up.
Simple data points like these can tell you a lot. See, for example, the German Tank Problem https://en.m.wikipedia.org/wiki/German_tank_problem
If I had the resources of a government, I could bribe just about anyone who works for a living.
I think the background check for these jobs _does_ check if you have debts etc. and I think probes into your financial history to see behaviour - they won't take you on if you're a risk.
The salary thing is nonsense though, a motivated foreign state actor will find ways of bribing if they detect you can be corrupted.
I have held a clearance while a private contractor and worked with many who held clearances, both as contractors and government civilians. There were many restrictions on what we could talk about because of security. Salary was not one of them. Some of us were under direction from our private contractor companies to not discuss salary. That had nothing to do with security. It was about maximizing profit and leverage for the company.
It is a point of reference though, you can know how much many of the people that work with you make.
As in "there is no point to explore other domains/companies in my industry since my compensation will not change for my seniority level even though I understand that the value I deliver for society might increase exponentially"
Can pay transparency level up the field by removing the incentive for hyper-productive outliers, pulling wages down, as a second order effect?
As in "I'm sorry Jane, we appreciate that you've been working 80 hour weeks and is solely responsible for the success of this project but 20 other engineers in our team who have the same seniority level as you are making $N and we can not pay you a dollar more (otherwise they would have to give the same raise to other 20 engineers to make it look fair). Promotion is another option, you are on track but it will take a year or two"
Is it possible that push for pay transparency is just pandering to the lowest common denominator where best and brightest are left behind?
The scenario you've described seems to imply that the company doesn't already know everyone's salaries. Pay transparency isn't what kept the company from giving her a raise; in fact, without pay transparency they could have told her that she was making more than her coworkers.
Point being that companies can already refuse to give a raise by saying some boilerplate like "you're being competitively compensated for an employee of your seniority, and unfortunately we can't give you a raise."
This is another area where pay transparency can complicate things. Jane may have the same experience and education as other employees, but much higher performance and work ethic. Unfortunately, this isn’t easily quantified, whereas the other characteristics are, which can create resentment among her peers who don’t see the other value that she’s providing.
If you're really able to provide your employer with more value than other employees, it's in your best interests that other employees' base pay rates rise, because you can raise your rates in relation to them and the additional value you can offer.
As the article points out it'd probably be a boon for minorities who traditionally do less well in secret negotiations for different reasons despite being equally competent, and paying equally competent people the same is good both for the firm and for the individuals in the long run.
Personally, I would start to question myself if I felt like I had to hide what I make. Never worked anywhere where hard working people were maligned for their salary if it was justified.
HR responded by sternly telling me I should not discuss salaries. Why not? So you can underpay people? There's literally zero reason other than that for us to not discuss it. The CEO literally owns a dozen Tesla's, pure unadulterated greed on his part.
Doesn't your own anecdote show exactly why not?
You make the same amount of money that you did before this happened, but now you are obviously angry that someone you consider less qualified now makes the same amount as you, you seem angry that you got dragged into the discussion, and you also seem angry that your CEO has more money than you.
Comparison is the thief of joy.
It sounds like now you’re being relatively underpaid — if they value her lack of skills at the same level of your having skills, something’s gone wrong.
In fact, according to your definition, this is exactly a scenario where a pay disparity “should” exist. Perhaps you should both be getting paid better, but there should be a difference
I'm pretty sure Equality Act 2010 makes any such term in a contract unenforceable.
The fact that it feels somewhere between dangerous and transgressive to post that speaks volumes to me. What weird evolutionary mechanism brought this on?