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On Salary Transparency

August 20th, 2008 · 6 Comments

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The New York Times had an article today on salary transparency that has gotten a fair bit of attention in the blogosphere. The thesis of the article is that in this internet age, knowing what your co-workers make will become commonplace. The move toward an open workplace, the article posits, might be inevitable.

Openness about company ledgers “will become the norm,” Ms. Fenton predicts, “even if people come to it reluctantly. If people are paid what they are worth, there is no reason for people to feel uncomfortable about sharing salary information.”

Color me not so sure.

I certainly acknowledge that there are plenty more ways to get an idea of what you should be paid. has always been one such tool. But Salary’s next-generation competitors like PayScale, GlassDoor and SalaryScout, are taking things even further. It’s now possible to find out what a specific position probably (or used to; or most likely) pays based on anonymous feedback.

But I don’t think you’ll ever see true and complete salary transparency. Not because, as the article suggests, middle class mores make salary disclosure taboo. No, the thing that the article doesn’t mention is the real reason why salaries are kept secret.

As my friend Matt pointed out, it’s in the best interest of management to keep salaries under wraps. If every worker knows what every other worker makes, then they will demand at the very least strict and complete equality in pay. But if no one really knows for sure… if the salary waters are a bit murky… then management can get away with paying some people way less than they otherwise would have to.

In short, it’s in management’s best interest to keep salaries secret so that they can keep labor costs down. Your boss might pay Bob 10k more than he pays you for the exact same job. It’s not your bosses fault. If, for whatever reason, you agreed to work for less, then hey: it’s a free market!

Sorry if I sound a bit Marxist in my analysis, but I think that’s the overriding reason for the tradition we have of keeping salaries on the down low. It’s a fact of business life, and the article kind of misses it in my estimation.

But that leads me to one of my favorite all-time bits of advice for anyone in the workforce:

In short:

Do whatever you can (legally and ethically of course) to find out what your co-workers make. If you ever have the opportunity to honestly learn about others’ salaries, don’t pass that opportunity by. Take it!

There is no more valuable bit of information that you can attain. Knowing how you stack up salary-wise tells you exactly how you’re valued by your boss.

And if you find you’re undervalued, do whatever you can to learn why and try to rectify the situation.

Related posts:

  1. Indeed Offer’s Job Search By Salary
  2. Ask Brian- What To Do When Asked For Salary History Or Salary Requirements
  3. How Have A Six Figure Career

Tags: Finance · Getting Ahead · Salary

  • fixedgear

    GS-12, step 7, I live in the Philly Metro area. You could look it up, Gov’t worker salaries are a matter of public record.

    Point is, I have 18 years of service and we’ve always had salary transparency. So what you say is not so true for the public sector. All I have to do is click ‘properties’ in Outlook to see my
    coworker’s grade level.

    Now, is knowing any good? Depends. It only seems to create dissension in my workplace, in the sense of ‘I cannot believe that person is the same grade as me and I perceive that I work so much harder than they do/I have more work/get more done/have more responsibility.’

  • Brian

    Actually, the article addresses that very issue. Govt workers and non-profit workers… those salaries can be public record. Also, in a minimum wage environment, you know what everyone’s making… you can even figure management is only making a dollar or two an hour more than you.

  • Dee

    I’m in the process of negotiating salary for a new job and it has been tricky trying to gauge whether or not the initial offer was fair.

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