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.
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
Posted by: Steve | Nov 9, 2021 5:16:51 PM
I worked at a firm that paid me as much as colleague who 'was only able to manage' one third of the work I was doing. So either his presence was worth three times what mine was or I was devaluing myself by two thirds. A quick change of employment for me helped make up for the gap in wages paid for work accomplished. As an investor I would love information on wages paid to company managers as a percentage of the companies growth or dividend. Some of us believe knowledge is power, other's would prefer to return to the 'good old days' of the dark ages where only a few had access to information.
Posted by: Frugalite | Nov 10, 2021 9:53:40 AM
I used to work in a research lab where there were four research associates (Ph.D. level scientists who do independent work). The women were paid $33 000 per year and the men were paid $ 45 000 per year. The women had to work unpaid overtime, the men did not. Based on a 35 hour work week and factoring in overtime, the women made $ 14 per hour and the men $24. I quit due to other reasons (a supervisor was fabricating data and trying to publish it under my name); however, the gross gender discrimination did not help morale in the lab.
Posted by: John | Nov 10, 2021 10:35:27 AM
First unfair pay scales are what has helped to create the screwed up economy we have now.
As far as I am concerned everyone who works for the same company should all be paid equally.
Everyone from the cleaning crew to the ceo should all be paid the same wage per hour as everyone else.
If the ceo makes $100k a year so do the cleaning crews.
Why should anyone get paid more then anyone else and why should anyone have to live paycheque to paycheque is way beyond my understanding.
I work for a company that has profit sharing and every single staff emmber tries their hardest to make the company succeed because they share everything equally.
Our company makes on average $75,000 a month net profit, that is after everything has been paid for (taxes, materials,rent, bills and employees retirement plans) and what we do is we divide that $75k by every hour that was worked by every staff member through the entire company from the ceo to the cleaning crew and then paid that amount to the staff (works out to average $25 an hour). Our company also saves a fortune on taxes because we don't pay a wage per hour and instead pay via profit sharing. Also the company does not touch the retirement funds at all and that is now generating extra income by accumilating interest so we basically upper our own reitrement by an extra 4% by just leaving it alone.
If companies started to do the same this economy would be the strongest in the world but due to the fact that 99% of companies want to keep it where the upper management and ceo's keep the cash with them and pay their staff like crap as usual the economy will continue to degrade until it fails entirely.
Posted by: JT | Nov 10, 2021 10:55:30 AM
I would love to be a cleaning person in your company! I can make the same salary as the CEO and have no pressure, no responsibility, not have to deal with human issues and never have to take my work home with me! What a great society and economy your reality would create. Incentive for improvement would abound!
Posted by: Western Guy | Nov 10, 2021 5:33:50 PM
Lol at John
So one person goes to high school and works hard, then goes to univeristy and again works hard and spends 100K+ on their education. After that they spend 10-15 years working hard (and gather a couple other designations & further increase their education) to rise up in their company to a leadership role where on a daily basis they are making decisions that will make or break the company. You are saying that person deserves the same pay as a high school dropout who scrubs the toilets? How naive you are.
A couple questions about your job. So if the business lost money would you contribute to cover the shortfall? For how long would you work for free for a failing company? If not you then who should pay for the shortfall? Also did you know that wages and profit sharing are equally deductible for the business so it saves them no tax doing it either way? Also could you treanslate the blather about your pensions into comprehensible english?
They gave your idea a try John in the USSR and Cuba. Both economies crashed because why have a difficult job if a simple one pays the same? Who wants a high stress, terrible hours, job that requires years of sacrfice to obtain if you can earn the same amount basket weaving?
Also 75,000 / 25 = 3000 hours a month / 160 hours per employee = about 18 employees. Not exactly GM is it?
One last thought here. You get paid what you are worth, no more and no less. So if you are being paid like crap.....
Posted by: arthur | Nov 13, 2021 3:20:49 PM
i thought basket-weaving was moved off-shore.
just remember folks, if you are not at or near the top, you have NO responsibility, NO pressure, NO stress, bla bla bla bla.
Posted by: Lisa | Nov 14, 2021 5:04:01 PM
I agree with you Arthur. Since when do "low paying" jobs mean LESS stress "Western Guy." (Oh geez...I had this same argument with you somewhere else, didn't I?) lmao So you think "Western Guy" that just because you have a degree you should get more money. Nice try...Not!!
I agree with John. Actually, John, you have a great argument. I wish more companies worked like yours.
The real problem is, greed at the top, in many companies. (I didn't think I"d ever say the word "greed," but alas, here I am...)
And no...you shouldn't know the salaries of anyone else...it makes for real problems...BUT you wouldn't have those types of problems if you worked at John's company. (Not being sarcastic either folks.)
Posted by: arthur | Nov 18, 2021 3:44:50 PM
i learned my biggest lesson about work/worth the day i overheard a notoriously cheap employer say he hated employees talking amongst themselves about wages. talk was knowledge, and knowledge threatened his ability to exploit his employees. if the employees were kept ignorant, then their wages remained stagnant and his wage and bonuses could continue to grow.
if people are struggling to earn crumbs, then they are too busy to see a way out or fight back.
i have no reason to believe any of the employers out there are any different.
Posted by: Dr. Wilson | Dec 31, 2021 10:25:08 AM
Both John and Lisa are totally out-to-lunch. What a stupid concept, everyone getting the same wage. Any company that tries this would not last very long. Why? Because anyone with enough brains to run a company and make a profit would not be stupid enough to work there, knowing that there are employees scrubbing toilets for the same income. Get real! I have many degrees, one of which is a Ph.D. I have such specialized knowledge that very few people can do the work that I do, and I get paid accordingly. I have done research which has led to a patent that has generated over $10 billion in revenue for my company in the last 15 years. This work took tremendous effort on my part. My salary is huge, and I get stock options as well. My income tax per year is more than what most Canadian gross family incomes are. I make much, much more than my family doctor and lawyer. I make much less than my CEO and rightfully so. Should the janitor at my company earn as much as I do? Or the librarian? Or the secretaries? Do you think mopping the floor merits $350 per hour? HELL NO! The only reason why Lisa and John think the way they do, is because they are probably the ones cleaning toilets for a living. What is the incentive to work to get an education, better yourself through development of your skills?
Posted by: Dr. Wilson | Dec 31, 2021 10:32:36 AM
One more comment @ Lisa. Your statement about having a degree is an insult. People with degrees don't get paid more just because that have a degree (or 2 or 3), it is what they do with it. I suppose that if you needed a heart transplant, you would be equally content getting a high school dropout to do perform the surgery or a qualifed surgeon with a medical degree. (Note that I used "qualified" and "degree" in the same sentence. This was deliberate redundancy).