Sunday, June 10, 2007

Last one for today... Salary Transparency...

This article was an interesting article about whether your salary should be public knowledge or if it should be kept private.

I have somewhat mixed feelings about it. I can understand the desire to keep one's private information well, private. But then, I have also worked out in corporate america. At my first corporate job (long before I dreamed of law school), one of the first things I was told was that I was not allowed to discuss my salary with anyone else at the company. Then that was amended when it was determined that they can't control speech like that legally, so they just said that we can't make other people's salary an "issue" (presumably when discussing our own salary). My first thought about that was, well, the managers all know what all of their people make - if it is ok for them to know, why not us? It smacked to me of unfair advantage. How can I negotiate a salary with someone who holds all the salary information when I have none?

That's why, ultimately, I think transparency is the way to go. Really, your raw salary doesn't tell much about you, and often people can guess what it is anyway based on your lifestyle. And finally, it is not like it is ultimatley a secret - you have to report every single dime you earn to the government anyway. So this is not information that isn't floating around out there already anyway. As it is, those who know about it have a massive advantage over those who don't. How can the free market work to set market wages when wages are all mostly secret from everyone else? Almost all market activity is in the open. Prices are set from public trading on the open market. Sure, some transactions are secret, but most are not. Prices are advertised far and wide. People who work free-lance, by the hour or whatever, have their pay posted far and wide. Why not make salary information more available so we can all better negotiate our own worth? I think the minimal privacy loss for some will be more than offset by the benefits. And since the government has all that information already anyway, I don't get as worried about the big-brother issues involved with this.

And ok, this is my last post for the day - I'll have to save taxes for later... (whether tax cuts pay for themselves was the actual topic). At least I got through all of these today! I deserve a treat now!


Shelly said...

full heartedly agree with the notion that more transparency is needed in most modern workplaces. Have you seen the grassroots SalaryBase project( - seems very much along your lines. Might be a bit simplistic but worked out nicely for me getting a better grip on my (not that good) situation

KipEsquire said...

"And finally, it is not like it is ultimatley a secret - you have to report every single dime you earn to the government anyway. So this is not information that isn't floating around out there already anyway."

Are you suggesting that your coworkers should also be allowed to see your tax returns?

Since when is there a "right to financial voyeurism," which is, bottom line, what this is all about?

"That's why, ultimately, I think transparency is the way to go."

If you want to call yourself " libertarian-leaning," then you need to get your arms around the notion that what you "think is the way to go" is irrelevant.

The only question is what rights people have and what powers government has. What you or I or anyone else considers neat-o has nothing to do with it.

DBB said...

Kip - how can you have market wages when wages are secret?

I am libertarian leaning - which means I favor markets over mandates wherever practical. Markets require transparency. Without that, then a select few have an information monopoly that vastly favors them over those without it.

That's why I favor transparent accounting standards for public companies. You can't hold a company accountable (and make the decision to buy or hold the stock) without having a full picture about what the company is doing and its actual financial health.

And tell me - how exactly can you determine if your pay is market-appropriate if the market is invisible to you? How is it fair, exactly, for management to use its inside information about what EVERYONE makes to underpay employees (and perhaps overpay a few select ones, like the one the manager is sleeping with).

What if all markets worked that way? Say you make a product, then you go to sell it, and the buyer offers you X dollars, but tells you you aren't allowed to ask what they paid any other buyer, and to trust them, it is a good price.

Markets don't work very well when there are massive monopolies. Salary information is an information monopoly - those at the top know everyone's salary, or can get it. The rest just have to guess.

You seem to think this is all about voyeurism - it isn't. It is about freeing markets to flow at maximum efficiency.

Shelly - I'll have to check that site out.