6 ms·

Wage transparency: Everyone’s happy except HR?

81 points by pg_1234 3y ago

atomicnumber3 3y ago
This is one of those issues where I have terribly, terribly little sympathy for the businesses. "It will cost the business more" "people might find out they're underpaid" "it'll bring down average comp!!" (Why? By what mechanism? All the author of the article does is bet 10% of his salary.) In the US, employment is ridiculously one-sided in the benefit of the employer and this has only gotten worse as inflation has returned in force. The fact that they're throwing up their hands and complaining "think of the poor capitalists!!" just makes me shake my head.
- SoftTalker 3y ago
  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.
  - nonameiguess 3y ago
    This is true of all government jobs. I used to be an Army officer. Our pay is set by Congress and in the federal budget. And yeah, that means low performers sitting away in bullshit staff jobs doing nothing earn exactly what the highest performers commanding elite units in difficult theaters of combat earn. So why does anybody bother to be a high performer? I don't know. Why do Olympic athletes in obscure sports with no pro leagues and no endorsement prospects still practice long hours and try hard? Why does anyone become an astronaut when they could earn more flying commercial jumbo jets? Some people just care about excelling at what they do, more than they care about money. Often you'll find these people in high-impact public sector work.
  - earthboundkid 3y ago
    Unions are essentially just a form of wage transparency. The union says everyone with X experience gets paid at least $Y. Bosses hate it, so it must work.
- specialist 3y ago
  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 https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action TLDR: Collective bargaining keeps everyone honest.
- wmidwestranger 3y ago
  Be careful, if you encroach too far into employers' head shaking monopoly, they'll notice.
- vore 3y ago
  Even for the chest-thumping capitalists out there, a free market of labor would surely involve much better price discovery for labor!
000ooo000 3y ago
>Finally, I’m willing to bet a tenth of my monthly pay that should wage transparency become mandatory, the overall salary range will fall throughout the industry (at least in the short term), as this is how organisations generally deal with forced initiatives. I would like to see how this would all play out. Generally people know roughly what the market is paying, and unless desperate, people probably aren't inclined to pursue roles paying far less than a) they are currently getting, b) the market is generally paying. So assuming the industry drops rem in lockstep, people stick to their current role, or they wait for an org to need talent enough to raise the pay on offer. The market evens out again eventually, surely ("at least in the short term"). That said, I'm a casual observer and I'm speculating wildly. Did find the "aw, poor HR" moments in the article amusing though.
- galangalalgol 3y ago
  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.
  - lotsofpulp 3y ago
    Some companies will. Some companies will have to give more pay knowing there is a better rock to hop to. Aka, a better functioning market because all participants have more information.
    - galangalalgol 3y ago
      I don't know how realistic employers colluding to hold wages down is, but if it happens, this transparency is also a public signal they can legally use to verify the other employers aren't cheating to get better talent.
      - sedev 3y ago
        Since they've done it before — https://www.npr.org/sections/thetwo-way/2014/04/24/306592297/tech-giants-settle-wage-fixing-lawsuit https://www.npr.org/sections/thetwo-way/2014/04/24/306592297... — I would consider it highly realistic.
rychco 3y ago
I don't give a care how much more difficult it is for the employer. It's unambiguously GOOD for the applicant to know the expected compensation before applying. If you're opposed to wage transparency, I can only assume it's for manipulative & dishonest reasons.
- made_this_acct4 3y ago
  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
  - joshuanapoli 3y ago
    If the employer really has a too-wide range, they can just post two job openings that split the range into high and low experience options.
  - nonethewiser 3y ago
    > some roles don’t really have a budget, salary will depend on applicant and can range a lot Not a real problem. That can be expressed as a range. For example, 100k-infinity.
    - l33t7332273 3y ago
      $100k+ isn’t very helpful if you make $180k and only want to apply for jobs paying $200k+. I could see ranges having some issues
      - jamilton 3y ago
        It's better than nothing.
      - deprecative 3y ago
        Employers will always try to get you to undervalue yourself so they can get away with paying you as little as possible. Taking tools away from them that they use to do this is only a good thing.
EatingWithForks 3y ago
This isn't even to advertise what everyone is being paid right now, just how much they expect to pay for roles they're hiring for.
joshSzep 3y ago
and this is why Glassdoor and Blind exist
- toomuchtodo 3y ago
  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-workers-are-now-covered-under-pay-transparency-laws.html 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-states-that-require-employers-to-post-pay-range-or-wage-range/622542/ 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)
  - yieldcrv 3y ago
    Next, I want a bounty system to report third party recruiters and employers that post job descriptions without them because right now the consequences are weak maybe we can make the the consequences hold greater legal muster by tying it to something else, like "if you register for an account with the payroll tax department, your job descriptions must have cash salary ranges posted with the compensation description"
    - deleted 3y ago
      [deleted]
    - toomuchtodo 3y ago
      Call your representatives. Make the law, the tech is the easy part. I’ve gotten more done in 30 minutes with a rep than in 10 years behind a keyboard.
- TylerE 3y ago
  That (sorta) for bigcorps. Not very helpful in many cases.
motohagiography 3y ago
It's not just HR. As a consultant, wage "transparency" is just price fixing with the effect of mean reversion that disadvantages applicants. The underlying pretext of these anti-negotiation activists is that the people looking for jobs lack skills, agency, and grit, 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. If you believe them, you've been taken and the only thing being exploited is perhaps your ignorance of an entire genre of $3.99 paperbacks on how to negotiate a basic wage. If you're really serious about anti-negotiation, there's nothing anyone can tell an ideologue other than that gaslighting poor people is despicable.
- nonethewiser 3y ago
  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.
- genocidicbunny 3y ago
  > 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.
  - 3y ago
jandrewrogers 3y ago
There have been a few studies on the systemic effects of wage transparency with respect to average pay. They tend to indicate, as in this paper [0] from 2021 for example, that wage transparency suppresses average wages over time. The proposed mechanisms for the wage suppressing effects seem eminently plausible. I haven't seen much evidence that it would increase average wages, either anecdotally or in studies. [0] https://www.nber.org/system/files/working_papers/w28903/w28903.pdf https://www.nber.org/system/files/working_papers/w28903/w289...
- Zetice 3y ago
  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."
  - _kulang 3y ago
    The folks at the higher end of the wage spectrum lose negotiating power too. I assume that outliers skew high, hence average wage gets suppressed. I’d be more interested in median wage data/trend, which didn’t seem to be in that paper. Plausibly, if those at the higher end have wages clamped, and those at the lower end can see what they could be worth, wage spend becomes a mean reverting process except with a downward trend driven by a company’s general aversion to spending money. From the employee perspective, it is of course more fair to be transparent about wages. I personally believe it’s for the best, at least socially and for worker’s rights. In some sense it can lead to worse outcomes, but these are really a reflection of the profit-seeking behaviour of companies, which is also made more effective by wage transparency. I would rather try to fix the underlying issue than not have wage transparency.
- kibwen 3y ago
  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.
andersrs 3y ago
Imagine if, in addition to income, you could also lookup the debt level and net worth of anyone you know. Are your neighbors driving a fancy car just because they're leveraged up to their eyeballs in mortgage debt? Would people change their buying habits if their net worth was public. Is there any point owning ostentatious possessions if everyone knows your debt level?
- deleted 3y ago
  [deleted]
- wenebego 3y ago
  Its probably pretty safe to assume they're just leveraged up
- P_I_Staker 3y ago
  > 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.
- extraduder_ire 3y ago
  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)
x-complexity 3y ago
...Huh. Never expected a Malaysian article to land on HN's 1st page. Considering the US/EU-centric userbase of this site & its consequent effects on links submitted here, I didn't expect one from my country making it here. But yeah, further transparencies into wages/salaries will help everyone to make better judgements & decisions when it comes to wage/salary negotiations.
totallywrong 3y ago
This is pretty useless. When enforced you end up with ranges like 80k - 180k "depending on experience" which tells you nothing. What I do is ask the recruiter right away when they reach out, if they won't give me at least a narrow range I'm unlikely to continue the process.
gnicholas 3y ago
A16Z just released a podcast about this. [1] They explore the nuances of what the rules require, and how various types of companies are responding to them. 1: https://podcasts.apple.com/us/podcast/salary-transparency-clarity-or-chaos/id842818711?i=1000626794680 https://podcasts.apple.com/us/podcast/salary-transparency-cl...
naruhodo 3y ago
If you can't gaslight and scam your coworkers to earn your bonus, what are you, as an aspiring HR corporate psychopath, to do?

81 points by pg_1234 3y ago

This is one of those issues where I have terribly, terribly little sympathy for the businesses. "It will cost the business more" "people might find out they're underpaid" "it'll bring down average comp!!" (Why? By what mechanism? All the author of the article does is bet 10% of his salary.) In the US, employment is ridiculously one-sided in the benefit of the employer and this has only gotten worse as inflation has returned in force. The fact that they're throwing up their hands and complaining "think of the poor capitalists!!" just makes me shake my head.

SoftTalker 3y ago
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.
- nonameiguess 3y ago
  This is true of all government jobs. I used to be an Army officer. Our pay is set by Congress and in the federal budget. And yeah, that means low performers sitting away in bullshit staff jobs doing nothing earn exactly what the highest performers commanding elite units in difficult theaters of combat earn. So why does anybody bother to be a high performer? I don't know. Why do Olympic athletes in obscure sports with no pro leagues and no endorsement prospects still practice long hours and try hard? Why does anyone become an astronaut when they could earn more flying commercial jumbo jets? Some people just care about excelling at what they do, more than they care about money. Often you'll find these people in high-impact public sector work.
- earthboundkid 3y ago
  Unions are essentially just a form of wage transparency. The union says everyone with X experience gets paid at least $Y. Bosses hate it, so it must work.
specialist 3y ago
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 https://en.wikipedia.org/wiki/The_Logic_of_Collective_Action TLDR: Collective bargaining keeps everyone honest.
wmidwestranger 3y ago
Be careful, if you encroach too far into employers' head shaking monopoly, they'll notice.
vore 3y ago
Even for the chest-thumping capitalists out there, a free market of labor would surely involve much better price discovery for labor!

000ooo000 3y ago

>Finally, I’m willing to bet a tenth of my monthly pay that should wage transparency become mandatory, the overall salary range will fall throughout the industry (at least in the short term), as this is how organisations generally deal with forced initiatives. I would like to see how this would all play out. Generally people know roughly what the market is paying, and unless desperate, people probably aren't inclined to pursue roles paying far less than a) they are currently getting, b) the market is generally paying. So assuming the industry drops rem in lockstep, people stick to their current role, or they wait for an org to need talent enough to raise the pay on offer. The market evens out again eventually, surely ("at least in the short term"). That said, I'm a casual observer and I'm speculating wildly. Did find the "aw, poor HR" moments in the article amusing though.

galangalalgol 3y ago
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.
- lotsofpulp 3y ago
  Some companies will. Some companies will have to give more pay knowing there is a better rock to hop to. Aka, a better functioning market because all participants have more information.
  - galangalalgol 3y ago
    I don't know how realistic employers colluding to hold wages down is, but if it happens, this transparency is also a public signal they can legally use to verify the other employers aren't cheating to get better talent.
    - sedev 3y ago
      Since they've done it before — https://www.npr.org/sections/thetwo-way/2014/04/24/306592297/tech-giants-settle-wage-fixing-lawsuit https://www.npr.org/sections/thetwo-way/2014/04/24/306592297... — I would consider it highly realistic.

rychco 3y ago

I don't give a care how much more difficult it is for the employer. It's unambiguously GOOD for the applicant to know the expected compensation before applying. If you're opposed to wage transparency, I can only assume it's for manipulative & dishonest reasons.

made_this_acct4 3y ago
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
- joshuanapoli 3y ago
  If the employer really has a too-wide range, they can just post two job openings that split the range into high and low experience options.
- nonethewiser 3y ago
  > some roles don’t really have a budget, salary will depend on applicant and can range a lot Not a real problem. That can be expressed as a range. For example, 100k-infinity.
  - l33t7332273 3y ago
    $100k+ isn’t very helpful if you make $180k and only want to apply for jobs paying $200k+. I could see ranges having some issues
    - jamilton 3y ago
      It's better than nothing.
    - deprecative 3y ago
      Employers will always try to get you to undervalue yourself so they can get away with paying you as little as possible. Taking tools away from them that they use to do this is only a good thing.

EatingWithForks 3y ago

This isn't even to advertise what everyone is being paid right now, just how much they expect to pay for roles they're hiring for.

joshSzep 3y ago

and this is why Glassdoor and Blind exist

toomuchtodo 3y ago
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-workers-are-now-covered-under-pay-transparency-laws.html 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-states-that-require-employers-to-post-pay-range-or-wage-range/622542/ 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)
- yieldcrv 3y ago
  Next, I want a bounty system to report third party recruiters and employers that post job descriptions without them because right now the consequences are weak maybe we can make the the consequences hold greater legal muster by tying it to something else, like "if you register for an account with the payroll tax department, your job descriptions must have cash salary ranges posted with the compensation description"
  - deleted 3y ago
    [deleted]
  - toomuchtodo 3y ago
    Call your representatives. Make the law, the tech is the easy part. I’ve gotten more done in 30 minutes with a rep than in 10 years behind a keyboard.
TylerE 3y ago
That (sorta) for bigcorps. Not very helpful in many cases.

motohagiography 3y ago

It's not just HR. As a consultant, wage "transparency" is just price fixing with the effect of mean reversion that disadvantages applicants. The underlying pretext of these anti-negotiation activists is that the people looking for jobs lack skills, agency, and grit, 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. If you believe them, you've been taken and the only thing being exploited is perhaps your ignorance of an entire genre of $3.99 paperbacks on how to negotiate a basic wage. If you're really serious about anti-negotiation, there's nothing anyone can tell an ideologue other than that gaslighting poor people is despicable.

nonethewiser 3y ago
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.
genocidicbunny 3y ago
> 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.
- 3y ago

jandrewrogers 3y ago

There have been a few studies on the systemic effects of wage transparency with respect to average pay. They tend to indicate, as in this paper [0] from 2021 for example, that wage transparency suppresses average wages over time. The proposed mechanisms for the wage suppressing effects seem eminently plausible. I haven't seen much evidence that it would increase average wages, either anecdotally or in studies. [0] https://www.nber.org/system/files/working_papers/w28903/w28903.pdf https://www.nber.org/system/files/working_papers/w28903/w289...

Zetice 3y ago
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."
- _kulang 3y ago
  The folks at the higher end of the wage spectrum lose negotiating power too. I assume that outliers skew high, hence average wage gets suppressed. I’d be more interested in median wage data/trend, which didn’t seem to be in that paper. Plausibly, if those at the higher end have wages clamped, and those at the lower end can see what they could be worth, wage spend becomes a mean reverting process except with a downward trend driven by a company’s general aversion to spending money. From the employee perspective, it is of course more fair to be transparent about wages. I personally believe it’s for the best, at least socially and for worker’s rights. In some sense it can lead to worse outcomes, but these are really a reflection of the profit-seeking behaviour of companies, which is also made more effective by wage transparency. I would rather try to fix the underlying issue than not have wage transparency.
kibwen 3y ago
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.

andersrs 3y ago

Imagine if, in addition to income, you could also lookup the debt level and net worth of anyone you know. Are your neighbors driving a fancy car just because they're leveraged up to their eyeballs in mortgage debt? Would people change their buying habits if their net worth was public. Is there any point owning ostentatious possessions if everyone knows your debt level?

deleted 3y ago
[deleted]
wenebego 3y ago
Its probably pretty safe to assume they're just leveraged up
P_I_Staker 3y ago
> 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.
extraduder_ire 3y ago
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)

x-complexity 3y ago

...Huh. Never expected a Malaysian article to land on HN's 1st page. Considering the US/EU-centric userbase of this site & its consequent effects on links submitted here, I didn't expect one from my country making it here. But yeah, further transparencies into wages/salaries will help everyone to make better judgements & decisions when it comes to wage/salary negotiations.

totallywrong 3y ago

This is pretty useless. When enforced you end up with ranges like 80k - 180k "depending on experience" which tells you nothing. What I do is ask the recruiter right away when they reach out, if they won't give me at least a narrow range I'm unlikely to continue the process.

gnicholas 3y ago

A16Z just released a podcast about this. [1] They explore the nuances of what the rules require, and how various types of companies are responding to them. 1: https://podcasts.apple.com/us/podcast/salary-transparency-clarity-or-chaos/id842818711?i=1000626794680 https://podcasts.apple.com/us/podcast/salary-transparency-cl...

naruhodo 3y ago

If you can't gaslight and scam your coworkers to earn your bonus, what are you, as an aspiring HR corporate psychopath, to do?