Last updated April 13th, 2019.7 minute read
Did you know that salary data for many public-sector employees is available for anyone to see? And I don’t just mean information on groups of employees, nor do I mean rough figures. Databases such as Data Universe allow you to quickly find the actual salary of real people.
If you work in the private sector, you might think it’s a bit strange that this information is just out in the open. After all, in the private sector, salaries are a bit like Fight Club: “The first rule of Fight Club is: you do not talk about Fight Club.”
Indeed, that does seem to be a common theme in many private-sector workplaces. Interestingly, I remember a Twitter thread recently which discussed this topic.
The funny thing is, I made the point that I often worry about discussing salary numbers. Why is that? Usually, it’s because I don’t want my co-workers to resent me if I happen to make more than them. Several points were made in rebuttal, which I appreciated because I always like to expand my perspective.
This response to my concern really got me thinking:
I think Emilie is absolutely right. It’s important to be certain that a level playing field is maintained.
Another point that was made is that if someone dislikes me because I earn more than them, that person probably isn’t worth my time. Granted, what each person earns is complex and perhaps even subjective, but it’s still a valid point.
If we can assume that salary is based on performance, then that person should have no reason to take issue with me. Yes, I realize that isn’t always the case. But everything else could be well outside my control.
Keeping Salary Information Under Wraps
But what is the reason for intentionally keeping salary numbers a secret, anyway? Is it to protect employees? That’s a nice thought, but the truth is that it’s probably not correct. Consider this quote from an article from The Cut:
As a former employer once told me when I asked for a raise to match my co-worker’s pay: “This is why I don’t like you talking to each other about how much you make.”
If that is what a manager actually said, then I feel that is, in a nutshell, the reason for keeping salary information under wraps. It’s not so much about protecting employees. It’s more about enabling employers to continue their unethical behavior.
If you know that several of your co-workers make much more than you, then you are probably more likely to say something. If not? Well, then you are more likely to subsist in blissful ignorance.
Another thing worth noting from the article above is that some states are actually implementing new regulations. The one it mentions, specifically, is New York. The gist of it is that, if an employee asks about salary information, his or her employer cannot deny the request.
I think this is a good thing in general, although I must admit I’m a bit on the fence about it. On the one hand, it’s good that we are seeing a move toward increased transparency; on the other, I’m not sure state regulation is the answer.
And no, I am not thinking there should be federal regulation. I’m going in the other direction, which is to say I think each organization should have more control in deciding whether be more transparent. I do realize that without state regulation, many employers or even most would stick to their old ways. In that sense I certainly understand the move for state regulation; I just think employers should have some say in it.
I’m not sure what the answer to this is at this exact moment, but it is certainly worth mentioning.
Coming back to the above-linked article from The Cut, it turns out that there is yet another downside to keeping salaries a secret. Doing so can actually have a negative impact on employee performance.
I do see one issue with that claim, though: employee performance is difficult to quantify. That said, the article does provide a reference to a study which suggests that teams work more effectively together when salaries are not being kept secret.
In my mind, that actually makes a lot of sense. If you are constantly wondering how much your teammates make, that can not only make you distracted but could even make you trust them less.
It’s easy to see why those issues would make teams work less effectively together, isn’t it?
I want to come back to the idea of income inequality because there are actually at least a couple of different aspects to it.
That inequality could come in a few different forms: in the form of discrimination against certain groups, for example. It could also come in the form of intentionally paying someone less, not necessarily due to discrimination, but because you can. You can do so because that person is oblivious to the salaries of similar employees, so they may not counter what is offered.
I think many of us would like to earn more; I’ve written before about how earning more might be the key to your success. But your income should be determined by factors such as your performance and market rates, not by your background.
Though I am not often subject to discrimination myself, I do feel the second point above is one that has affected me. Several years ago I started a new job, and my pay was pretty low. Needless to say, I didn’t feel great about it. But still being relatively early in my career, I didn’t feel as though I had very much negotiating power. Not long after starting the job though, I remember my co-workers saying that this was a different HR rep setting my salary than they had and that this new guy “screwed people.”
As you can see, this was bound to be a tough situation for me, even if I had been more informed. I didn’t really have anything by way of savings, and I had even less experience. Thus, I did feel like I had to pull the trigger quickly.
Still, someone who is more experienced coming into such a position should be able to make an informed decision.
Not All Sunshine and Rainbows
As is usually the case with any solution to a perceived problem, wage transparency would likely not be perfect.
Scott Rick, a marketing professor at the University of Michigan, conducted a study that revealed some interesting findings. The short version is that not only did those who found out they were on the low end of the pay scale tend to perform worse; they were also more prone to behavior such as cheating on exams.
The above article also mentions other potential issues. For example, pay transparency may not include things such as benefits. Benefits are sometimes more difficult to define on a dollars-and-cents basis. Other times they are received after the employee’s compensation is initially determined.
Whatever the case may be, my personal take on this is that transparency might work better at a startup than a long-established company. My reason for thinking so is because employees at older organizations may have had the same position for years, or even decades; that wouldn’t be the case at a startup.
There Are No Perfect Solutions
Yep, life is messy sometimes. Unless you’re an adult, and then it’s messy approximately 100% of the time. Still, I do believe there are ways to address the issue of salary secrecy.
At older, more established companies, I do believe that introducing this change probably needs to be more gradual. Perhaps employees could be more willing to discuss real numbers amongst themselves.
I think it’s important to consider the reason this information is kept secret. Unless you have a very specific answer, there is at least a possibility that the reason is not to protect you. Instead, it may be to protect someone “above your pay grade,” as they say.
So even though releasing the exact salary for every single employee may not be ideal, at least not immediately, it’s something to think about. I would say we need to start opening the conversation. The transition might need to be a gradual one, but I do believe that moving toward more openness would be better for employees in the long run.
Those above my pay grade may not agree, but hey – maybe that’s why they’re above my pay grade.