Asymmetric Information in Wage Negotiations: Hockey’s Natural Experiment (2013) [pdf] | Hacker News Reader

Asymmetric Information in Wage Negotiations: Hockey’s Natural Experiment (2013) [pdf]

economics.usf.edu

38 pointslogn9 comments

tl;dr US Hockey league published its players salaries starting in 1989. Over next five years, wages rocketed, importance of team negotiating tactics / prestige vanished and player performance became a major correlation to highest pay.

In short asymmetric data on employee wages (company knows all salaries, employee knows just one) leads to inefficent outcomes

Even shorter - everyone's salary and pay should be published - that will fix pikkety's problem

Even even shorter - how the hell do you measure performance?

To nitpick, it's the "National Hockey League" (NHL) and has seven Canadian teams and 23 American teams (likely increasing to 8 and 24 soon).

Publishing of salaries has really created another fun side of the games for fans. Numbers junkies now have the luxury of advanced on-ice analytics as well as some cool financial info in the salary cap era.

Better still: publishing wages does no go if you can accurately measure performance - it could even be harmful if skills in negotiating wages are a skills that contribute to good performance in your field.

Economic inequality is a hot topic right now. Employers knowing everyone's salaries, but not the employees, puts the employees at a disadvantage when negotiating salary.

One option would be to require all companies to publish employees salaries. Would this requirement be more or less onerous than other options?

One argument is that it hurts businesses - but if every business is required to do it, then it is an even playing field. Obviously that cannot happen in an international business setting - so would it put the countries that implement it at a disadvantage, or would the economic gains outweigh the decrease in competitiveness?

Regulation like this would be absurd considering anyone can legally publish their salary publicly. Salaries are not public because employees want them not to be public.

I don't want lawmakers or trade unions undermining my right to privacy under some manipulative power-play guise of "fairness". We are all free to make our salaries public, if we think it is in our best interest to do so, let's talk about and focus on that and not be so naive as to believe regulations will magically solve a cultural issue.

In the USA, outside of California and possibly a few other states, it isn't clear this is legal. Employers may be able to prohibit employees from publishing their salaries, although they can't prohibit employees from discussing compensation with each other.

Okay. This is a good data point and where I think we culturally and legally should be focusing our attention; laws should be passed to expand employee liberties and ensure the right to disclose wages for a specific class of employees before considering laws to regulate and encumber businesses.

You say that, but I've received offer letters where I was expected to keep my salary secret. Companies are demonstrably interested in suppressing such information.

Shouldn't someone simply build a "log-in-with-LinkedIn" website that allows people to list their current and former salaries?

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