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November 09, 2021

Are you better off knowing the salaries of those you work with?

Sometimes you’re better off not knowing, particularly when it comes to sussing out the salaries of the people you work with.

According to a recent study from Berkeley economist David Card, the more you know about your co-workers’ wages, the less satisfied you’re likely to be with your own circumstances, especially if turns out you’re making less than the average among your peers. 

In order to determine how workers react to comparative salary information, the researchers relied on an online tool sponsored by the Sacramento Bee newspaper, which lists the salaries of all California state employees.

To stir the pot, the researchers simply alerted a group of employees at the University of California to the existence of this site and tabulated their reactions.

Once given a chance to compare their pay with the salaries of others in the same occupation, those who fell below the average became increasingly peeved and more likely to look for work elsewhere. The closer they were to the bottom, the more dissatisfied with their jobs they were likely to become, the study found.

However, as long as you earn more than the average worker in your company, the fact that others earn more than you probably won't bother you as much. Such a finding challenges the idea that relative pay and job satisfaction always rise in tandem, the researchers maintain.

Why do we care what those around us make? Other than grist for possible future negotiations, the knowledge doesn’t put any more money in our pocket. But it does matter. Witness the popularity of sites like Payscale, Salary, and Wowjobs.

So much so, that some HR thinkers recommend that employers develop internal salary disclosure policies to allow workers to make more informed comparisons.

Is comparative salary data available where you work? Should it be? How upset/happy would you be once you really knew where you stood?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...