Wage transparency: Everyone’s happy except HR?

I don't have any evidence for this, but the logic is not that "Everyone's wages go up." Rather, it's, "The folks at the lower end of the wage spectrum gain negotiating power to ask for more."

Quoting the article:

"We find that in markets with high individual bargaining power (low unionization rates), pay transparency mandates lower average wages around 2%, as we find in the context of the U.S. private sector. In markets with low individual bargaining power (high unionization rates), pay transparency mandates have little to no effect on wages."

This seems to not be an argument against pay transparency so much as it's an argument for unionization. Transparent prices in any market are important for market efficiency, and that's no less true for the labor market. The mechanism for decreasing wages is "employers resist issuing individual raises because they think everyone else will want a raise too", and that's a cultural thing that will pass in a few generations. I have worked on teams with plenty of people who made more than me, and I didn't take it personally because I knew full well how brilliant and hardworking they were.

A study where the "zero year" just happens to be the first year of the Great Recession...

This study is a great example of p-hacking and a very poor example that wage transparency affects average pay.

For a counter-example: wage transparency has resulted in runaway salary inflation in athletics, entertainment, tech, and executive salaries.

Yeah, I could see it making things fairer, but not necessarily more prosperous overall.

I think it makes sense.

With transparency, the information may not be able to capture the differences in expertise of each worker - like "someone who has delivered x products and is well versed in techniques a, b, and c". The market will just show a blanket designation giving an impression of fungibility (which unenlightened management already have) and the tendency will be to push rates down to the lowest common value.

Its probably pretty safe to assume they're just leveraged up

> Is there any point owning ostentatious possessions if everyone knows your debt level?

Perhaps it seems safe to assume not, but it couldn't be further from the case. First of all, it's not necessarily the case that overleveraging so you can have possessions to enjoy is enjoyable.

Especially at the higher end of the earning, this can be very apparent. $20m underwater and living in a mansion. Am I really toughing it out? Remember when the Trump said a homeless guy has more money than him. Yet he's pooping on the street and not a golden toilet.

The truth is that people never care how much you really earn it. Our society would be totally different if so. Yeah, implied with the respect is that you earned it, but people don't care.

People either "like" you because they can share some of it, imagine themselves like you, or they're envious of your stuff. If you earned it that's just a cool bonus.

I think some nordic countries come close to that by allowing anyone to look at tax information by going into an office in person. (people availing of this service is also public knowledge)

Inflation will eat the pay of people sitting on a good check because the company will give terrible updates to the pay knowing there isn't a good rock to hop to.

When I worked at a state university, every salaried employee's pay was public information. You could just look up anybody and see how much their salary was. I never paid a lot of attention to it but some people did and seemed to obsess over who got paid how much in comparison to themselves.

They paid pretty poorly compared to what many in the tech sector can make, but it was low stress and you had a lot of PTO and decent other benefits.

Yes and:

Union wages are known by all their members. And somehow the world hasn't ended.

Transparency seems reasonable to me. A good first step.

For the game theory minded, highest recommendation for the book The Logic of Collective Action. Explains the free rider problem, debunking the prevailing economic folk theories of the day (1965).

https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action

TLDR: Collective bargaining keeps everyone honest.

Be careful, if you encroach too far into employers' head shaking monopoly, they'll notice.

Even for the chest-thumping capitalists out there, a free market of labor would surely involve much better price discovery for labor!

Feels like this sounds good in principle but

- some roles don’t really have a budget, salary will depend on applicant and can range a lot

- forcing a range means these ranges will skew lower so higher performing people will lose out and average salaries will go down

> It's unambiguously GOOD for the applicant to know the expected compensation before applying.

Only if the expected compensation is referential and doesn't have to be honored.

If the expected compensation has to be honored, then you have no way to negotiate a salary higher than the upper bound or lower than the lower bound.

People are opposed to being valued the same way that mediocre people are. Like, I don’t talk about money until the interview process is over. That way I have the leverage (concrete examples of performance) that I need to negotiate fairly.

Employers now can just race to the bottom with accurate info on their competition.

You’ve played yourself.

You do realise that it's possible to believe both "the world would be better if everybody did X" and also believe that "the government should not have the power to mandate everybody does X"?

It's why laws must exist [1] [2], otherwise it wouldn't be done (US centric citations).

[1] https://www.cnbc.com/2023/06/21/more-than-25percent-of-us-wo... ("More than 25% of U.S. workers are covered under pay transparency laws—that could soon be near 50%")

[2] https://www.hrdive.com/news/pay-transparency-law-tracker-sta... (A running list of states and localities that require employers to disclose pay or pay ranges)

That (sorta) for bigcorps. Not very helpful in many cases.

Im sympathetic to the price fixing concerns. But publishing wages seems like a detail of executing a price fixing scheme (which can be executed other ways currently). I dont see how it encourages price fixing. It seems to me the forces discouraging price fixing include ethical obligations, competition, and threat of law. I dont see how wage transparency overcomes any of these. You would still need to be an asshole willing to break the law with the threat of a competitor undercutting you.

> and work on a tenuous 19th century narrative where job seekers were essentially beggars going hat in hand for a wage in exchange for exploited labour.

...Except that is still more or less the case for the vast majority of workers. Most employers won't even wait for you to finish your negotiation spiel before kicking you out and moving onto the next applicant.

Most people, at least in the US (which is seemingly the focus), are not working in an industry where workers have any real room for negotiation. You might be able to get a dollar or two per hour more if you really impress the hiring manager, but that's not happening for the $10/hr kinds of jobs that so many people work. And if you try to squeeze the employer for more, they probably have a stack of applications many of whom will take whatever the employer gives them because their alternative is getting paid nothing at all.

What changed that suddenly gave workers the upper hand in negotiating with company management? The whole “hat in hand bit” seems like an effort to obscure the obvious fact that individual workers still lack meaningful power in negotiating wages.