Hacker News Reader

Comment by grecy | Hacker News Reader

> It creates a significant and largely artificial information disparity, giving a major market advantage to the employer.

Absolutely.

Having employees not discuss salary is all about the employer having more power/control, and the employees having less.

I've always thought it's a little like an adult giving candy to a child and then say "Now, don't tell anyone I gave you this!".

Why doesn't the adult want anyone to know about the candy exchange? Because they benefit from keeping in concealed.

EDIT: I also think this is a generational thing. Everyone I know over 40 wouldn't dare talk about their salary, or how much they paid for their house, etc. Everyone I know under 30 will happily talk about it to anyone and everyone. Give it a few more decades, and this will be the norm.

View on HN

I suppose it is true that when we turn 40 our brains rot. All we care about is keeping kids off of our lawn and catching the early-bird special.

Many people don't like to share their salary - not because they wouldn't "dare" as if they are cowardly or not as enlightened as you. Some people find talking about personal salary or wealth to be distasteful - like a braggart yammering on about his expensive possessions. If you have no economic diversity in your group of friends then it's probably no big deal, but otherwise you likely are making people feel ashamed and unsuccessful. Some people might feel it's rude and unnecessary to discuss your salary unless there is some reason to do so.

I don't personally have a problem with a fair and consistent formula for salaries within a company, and people within my company may be able to deduce what I make. It's not a power trip thing. But I don't really want my salary mandatorily posted on the web for every random friend or stranger to investigate. Unless I'm working in the public sector it's my own choice and my own business.

My apologies, I wasn't trying to imply people are cowardly or I'm more enlightened, or anything like that.

The word I was looking for is taboo. I believe that the baby boomers find talking about money to be a social taboo, while younger generations do not.

It's not about any group or generation being better, I think it's just a change in what society finds acceptable.

(To be honest, I'm not sure Gen Y'ers find anything to be socially taboo. I wouldn't be surprised if that word stops having meaning)

Hehe, no worries. It probably is somewhat due to our generations, but it may also be that as you age your salaries naturally will begin to diverge. And with a certain amount of success it's not exactly smart to go around broadcasting your wealth. I personally am self conscious about coming off as a rich jackass when I go to my hometown and visit my high school friends who are working for minimum wage.

For a venture funded start-up, over-sharing finances seems somewhat ill-advised to me. I guess maybe I am old and I just don't get it!? According to their blog they have a payroll burn rate approaching $2 million per year. Maybe they are grizzled veterans who have been in startups that run low on money and they have tricks up their sleeve. Maybe not - maybe they're just a bunch of kids who have never done this before and think that the money will keep flowing no matter what happens. Maybe their over-sharing will not put them at a serious disadvantage when negotiating because everybody will know their level of desperation for cash. Maybe their employees will not become very nervous and start leaving when the funding situation becomes scary? I only just took a really quick look that them and I don't know the answer to these things, but it doesn't seem like it really benefits them that much to share their corporate finances.

>I personally am self conscious about coming off as a rich jackass when I go to my hometown and visit my high school friends who are working for minimum wage.

I agree 100%. There is a fine line to be walked between "sharing" your salary and "bragging" about your salary.

For me, I find it easy to share with people in a similar-ish scenario/career/position in life. It's not so easy to share with someone in a very different life situation, like working a minimum wage job, as you say.

> It probably is somewhat due to our generations, but it may also be that as you age your salaries naturally will begin to diverge.

That right there. I'm nearer forty than 20, and I remember a time when I freely discussed my salary, or the price of anything I'd purchased with anyone who'd asked. Now, not so much.

>> The word I was looking for is taboo. I believe that the baby boomers find talking about money to be a social taboo, while younger generations do not.

I'm the tail end of Gen X. Talking about your income is gauche, it inevitably leads to comparisons between peers (even unspoken ones) and can sow discord in a group.

It might just be that the next generation grows up knowing about this incredible range of renumeration that exists and has less personal self esteem caught up in that number. A grocery bagger knows his doctor neighbor makes more than him. But perhaps his personal self worth is less tied into that and doesn't really care. I think such information is much more transparent than it's been historically.

> Having employees not discuss salary is all about the employer having more power/control, and the employees having less.

You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate.

They have more knowledge but certainly not more control.

If anything, the fact that the salaries are the result of a simple equation means that the employees have close to no control over the money they make. Also, a lot of factors contribute to the productivity of an employee, most of which cannot be accounted for in a simplistic equation, things such as working long hours, working on weekends, good attitude, willing to take on unpopular tasks, etc...

>They have more knowledge but certainly not more control.

Knowledge is power, as they say.

Industry wide wage negotiation is basically a collective action problem; publicizing your wages lowers the barriers/cost for negotiating for higher wages. Most people are, by definition, paid less than their marginal value and thus have some leeway for a raise to begin with.

Besides, it works for CEOs: http://www.newyorker.com/talk/financial/2013/10/21/131021ta_...

Though I think that's why this is a good solution: it still provides the company with wage control while creating transparency for the employees.

It is not beneficial to the company over individual wage negotiation. Suppose V_i is the amount of value the ith employee contributes to the business (V_i = revenue from employee i, minus non-salary costs). For the business, the hire makes sense if the salary is anything in (-inf, V_i) - but with the lower the better.

Presumably, the company believes that their computed salary (call it S_{f,i}) is such that S_{f,i} < V_i for all employees.

However, there are things that the formula doesn't take into account - for example, an employee might be bad at negotiating, and be willing to accept a salary below S_{f,i}, or they might have something in their history (e.g. a conviction) that means that it is hard for them to find alternative work and they are willing to work for less if told to take it or leave.

Similarly, a very good prospective employee might be currently paid S_{c,i} in (S_{f,i}, V_i), or an existing employee might have received a counter offer S_{c,i} in (S_{f,i}, V_i) - it is rational for the business to offer S_{c,i} (or another number between S_{c,i} and V_i) to gain / keep that employee, but it isn't in their interest to give every employee the same pay rise.

This post might be better without the mathematical abstraction.

> An employer wants to pay their employee as little as they can get away with, as long as it is less then the value that employee provides. Presumably, this company set such salaries.

> However, there are things that the formula doesn't take into account - they lose the ability to screw bad negotiators and convicts out of money.

> Similarly, if people are offered higher salaries elsewhere, it might be worth it for the company to counter-offer with something still less then the employees value to them to keep that employee, but they don't want to do the same for everyone.

I disagree they don't have more control. If the salaries are out in the open, then pay disparages would need to get addressed. Those who are severely underpaid would look for another job, so the company would need to give them a raise and fix the situation. I've known plenty of very good employees who were severely underpaid simply because they didn't know any better.

> You seem to imply that just because the employees know all the salaries, they have more control. This is not accurate.

No. I'm saying that because the employees know all the salaries, the employer has less control.

The employer can no longer dictate terms and make secret differing deals with different parties.

> No. I'm saying that because the employees know all the salaries, the employer has less control.

How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula?

"You know what, Dave, I know you want more money but I just decided to add a negative 'is disrepectful of superiors' factor' and your salary just went down $5k. Isn't transparency great?".

> How does the employer have less control when he is unilaterally deciding what the formula is and he can stonewall any request to discuss salary by hiding behind that formula?

Once everyone knows the employer is doing that kind of BS, they will go elsewhere, and the employer will be left with no employees.

Employment is not some kind of privilege we should be thankful for. Remember that.

> Employment is not some kind of privilege we should be thankful for. Remember that.

So someone is compelled to provide me with employment? By what force and why? Am I automatically entitled to employment at any company of my choosing? Can I decide that you, Grecy, are responsible for employing me?

No.

The employment contract is a business arrangement. Describing it in such value-laden terms does a disservice to all parties.

One is employed presumably because the arrangement is mutually beneficial; if it stops being mutually beneficial the arrangement is renegotiated or terminated.

This isn't true. In the posted numbers, there aren't any major discrepancies between people doing the same job. But imagine if you saw two programmers with roughly the same background and experience with a $20k+ difference in salary. The reason you don't see that is precisely because the salaries are public.

Your error is assuming that the same formula would be used if the salaries weren't public. The employer is forced to use a simple, consistent formula. They would be under no such pressure if all salaries were secret.

"Everyone I know over 40 wouldn't dare talk about their salary, or how much they paid for their house, etc. Everyone I know under 30 will happily talk about it to anyone and everyone"

That's because they (the <30's) grew up with FB and are used to sharing everything with the world.

Some things you just don't share with anyone. That's one of the reasons we still wear clothes.

I wear clothes largely for the benefit of others, personally. And because it gets cold.

That's the same reason why many people don't share their salaries: for the benefit of others (who might get jealous).

I usually hide my pay these days. Last time I shared with someone I worked with, who it turned out made a fair bit less than I did, the guy got mad at me. I stopped sharing.

Reply on news.ycombinator.com