12 ms·
At this point is there any disadvantage to legislating that all companies should share a transparency report where they list their levels + avg, min, max, media
by dom96 3y ago
At this point is there any disadvantage to legislating that all companies should share a transparency report where they list their levels + avg, min, max, median salaries for each level?
- m0rissette 3y agoWouldn’t all the companies then just conspire to pay everyone lower wages?
- lesuorac 3y agoSo right now all the companies do share salary data with each other. They typically wash it through a 3rd party so it's not that blatant. So, a change where the companies also posted their salary data publicly would only additionally inform employees not HR. But yes tech-HR has in the past gotten in trouble over salary fixing.
- quietbritishjim 3y agoExactly the contrary: if all wages are public, that wouldn't be possible, because only one company would have to violate that conspiracy to get all employees at other companies to start applying to them.
- pgeorgi 3y agoThere are already companies collecting such information and making them available for their customers (who supposedly provide some collated data set to them in exchange). That's what all the "paying top of market rate" talk in various companies is based on. So: the potential for collusion already exists, but unless regular folks can get access to the analysts' data sets as well, it's a very one-sided deal.
- lozenge 3y ago> paying top of market rate I thought that was just marketing puffery...
- oblio 3y agoNo, they actually buy that info from 3rd parties. The puffery is that they say "top 10%" when they're " 'top' 40%".
- hellweaver666 3y agoYup... HR call it "benchmarking"
- kiklion 3y agoYou don’t even always need a third party. My wife works in HR for the government and part of her job is literally to contact neighboring counties and send them requests for their salaries for various positions and levels while filling out salary requests from other counties. Of course, being government, it’s all public information anyway so collaborating in this way is seen more of a performance increase vs manually accessing each counties salary information but it’s the same premise.
- barrysteve 3y agoWouldn't all the employees then just conspire to unionize around the highest paid employee? EDIT: forgot to mention I'm not advocating for it.
- velcrovan 3y agoWait till you find out what they do under the current system where wages are secret information https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
- efitz 3y agoNo, because they need to attract employees and employees would generally not be attracted to uncompetitively low compensation packages. As a result, companies absolutely track how much employees of a type and level get paid elsewhere, so that they know where to aim compensation packages competitively.
- thinkharderdev 3y agoNot sure if the parent's concern is valid but I think the argument would be that companies can conspire to all suppress wages so they don't have to compete on comp. That would be hard to do now because they can't "officially" conspire in this way (eg sign a binding contract with each other) because that would be illegal. Without an enforcement mechanism it is too easy for any one company to defect from the "gentleman's agreement" and offer higher wages. If all salary information was public though, then as soon as one company defected and offered one high-value employee a higher salary everyone else would immediately know it and start competing on salary again. So that makes the informal agreement more stable and leads to lower wages.
- somsak2 3y agoThey're way ahead of you! https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
- lesuorac 3y agoIt would cause wage growth leading to a lower percent (but an increase) increase in other prices (housing, etc).
- RicDan 3y agoSo things that are happening regardless?
- lesuorac 3y agoSure but it would be worse. You see this all the time when the minimum wage is increased by say 10% then there is a general inflation of 1%. General inflation lags wage increases although at a reduced effect.
- kasey_junk 3y agoThat’s not what the empirical evidence suggests (though it’s a big topic of study). It’s closer to 0.4% for every 10% increase and the inflation happens almost immediately. https://research.upjohn.org/up_workingpapers/260/ https://research.upjohn.org/up_workingpapers/260/
- lesuorac 3y ago0.4% you say but that paper says 0.7%. However, lets be real 10% to 1% vs 10% to 0.7% still gets the same message across. But I'm still really not sure what you're trying to argue. My claim is that a X% wage increase will be followed by an <X% increase in inflation and so far all anybody has done is backed up my claim. This isn't even rocket science. For any product you'll spend say $10 on labor, $15 on marketing, $5 on parts for a total of $30. If your labor costs goes up to say $20 then the total cost is $40 and one could expect the price that the 200% increase in wages lead to a 25% increase in the products price (inflation). > In the base specification (p. 162), which included only monthly and yearly controls, the cumulative wage-price elasticity from three months before up to three months after a minimum wage hike was estimated at about 0.07, meaning that a 10 percent increase in the minimum wage is associated with a 0.7 percent increase in FAFH prices. Aaronson, French, and MacDonald (2008) used microlevel restaurant price data for the period 1995–1997, during which two changes to the federal minimum wage were implemented, to generate a wage-price elasticity of, again, about 0.07. 3 Though the empirical literature is somewhat limited outside of these two formative works (see Lemos [2008] for a review), other studies have found similar results in other countries and other cases.
- xvector 3y agoEvery company I've talked to with "transparent" comp has offered absolutely terrible comp, even for their highest possible offer. In reality "transparent comp" becomes an excuse for companies to not negotiate.
- velcrovan 3y agoIf it is legislated that everyone has to do it, then people looking to sell their labor can do so with perfect knowledge of where the market is at, reducing the negotiating strength of these shitty companies. This is how it already works in Norway. https://www.bbc.com/news/magazine-40669239 https://www.bbc.com/news/magazine-40669239
- tristor 3y agoAnd how is tech compensation in Norway compared to the US? That's what I thought...
- occz 3y agoGo ahead and prove causation on that, please. You're not going to be able to, because it's impossible.
- velcrovan 3y agoThe raw numbers are different, I’m guessing (I haven’t looked). A tech worker in Norway also pays less for healthcare and housing, is healthier, spends less time in traffic and lives in a society where everyone lives safer and more equally, and has more power to walk away from a shit job than someone in the US. It’s a system that values autonomy for the most people over the power of a tiny sector of the economy to rake in maximum dollars, and wage transparency is just a small feature of that system. But yeah if it doesn’t bring you personally more money I guess it’s not even worth thinking about
- sokoloff 3y agoI’m opposed to disclosure laws that would be prone to expose the income of individual people. If Alice is the only SWEPR5 at a company, that proposal publishes her salary. If Bob is clearly the best SWEPR4, Cathy the middle, and Dave just barely got promoted to that level, their salaries are also individually published. I don’t object to good faith ranges being required in job listings, but I oppose anything that would tend to publish an individual’s data that they should be able to keep private. (That’s before even getting to the fact that salary is nowhere near the full compensation picture.)
- jachee 3y agoManagement is the only one who benefits when labor doesn’t openly share salary information. Let the information flow. Knowledge is power.
- eastbound 3y agoNo. With full public information, bad employees benefit from being able to ask for more, good employees just flee elsewhere. Because it’s impossible to reason someone on their skills. Full information is hell on Earth.
- lotsofpulp 3y agoManagement’s job is to get rid of bad employees. Good employees do not have unlimited places to “flee” to. And full information is when markets allocate resources most efficiently.
- ekianjo 3y agoInformation asymmetry is a natural thing. It benefits job seekers too because your prospective employer does not know everything about them. If all info was freely available knowledge brokers would have immense power.
- lotsofpulp 3y ago
- dataking 3y agoLots or reporting requirements only take effect once a firm reaches a certain size. This makes a lot of sense given that tiny firms (say less than 10 employees) may not have formalized wage scales, in-house administrative staff, and have a harder time amortizing compliance costs. So yes, there are disadvantages to consider.
- solardev 3y agoSmaller companies can just report whatever they're paying each employee that year, then?
- klysm 3y agoI mean they already do?
- solardev 3y agoPublicly and to their employees?
- bitshiftfaced 3y agoGrandparent poster asked what the disadvantages were. Some employees might not want their personal salary information revealed.
- nine_k 3y agoI think the legal requirements is declaring pay ranges for which the companies agree to hire (IDK if they must reveal current actual pay). A range can conceal enough for a particular employee not to feel exposed.
- Someone1234 3y agoEven the lowest paid employees at the state and federal level already have their pay revealed, and it hasn't caused a problem yet. As far as I know, only orgs like the CIA (and similar) where their employees aren't public are hidden from public view.
- DecoPerson 3y agoThis significantly disadvantages good money. Good money being: any company that tries to do things properly (or, relatively properly). Bad money being: profit, profit, profit. Take risks and misreport. Don’t put anything in writing. Pay bonuses under the table. Etc etc etc. Not only does the good money need to spend a lot more money to comply, they also wind up wasting a lot of money on “fake” compliance or “over-“ compliance. For example, insurance companies often find ways to make companies insure the same risk multiple times. Or consultants over-analyse and say “This whole thing is a risk for your company. It needs to be fixed. I can do it for you.” Good money will pay consultants to prepare excruciatingly detailed salary transparency reports, and they’ll live with the cost of their honesty (“you pay women less than men!!!! it doesn’t matter that your state has very few qualified women in that field!!! pay them all the same!!!”). Bad money will do just enough to be compliant, and they’ll fudge the numbers (with sneaky fringe-benefit bonuses to their employees so they don’t care).
- velcrovan 3y agoNice theory but this hasn’t been borne out in countries where wage transparency is already the law.
- tycho-newman 3y agoMaybe the region would have more women in the field if the companies were transparent about pay and benefits?
- refurb 3y agoAs an aside, rent is public information in Singapore, at least for private rental (not for rentals of public housing). Since all tenancies need to pay a stamp tax to be legit contracts, the government lists every contracts rental price on a website. https://www.ura.gov.sg/property-market-information/pmiResidentialRentalSearch https://www.ura.gov.sg/property-market-information/pmiReside... The information is specific to a unit and published monthly (e.g. if 6 units were rented out, there are 6 entries in the database). It’s quite helpful when looking for a place to rent because you can look up the exact building see what people are paying. The data is obscured a bit because units are described as “50 to 70 sq m”, so while you can guess if it’s a 1 bed or 2 bed, you cant tell if it has 1 or 2 bathrooms, what floor it on, whether it comes furnished or not. But you can look at a group of transactions that are similar to the unit you’re looking at and get of what the market rate is.