I'd just point out that this is largely a cultural phenomenon. In some countries it is normal to post everyone's salary (similarly, student grades are posted on the wall after exams).
A lack of transparency really only aids the employer (after all, the employer knows what everyone makes, and with salary comparison services they know exactly how competitive their salaries are).
Price transparency is a basic requirement of functioning markets. It’s funny that it’s so taboo in the US, with such a significant voting population espousing pro “free” market, pro business sentiments.
> Price transparency is a basic requirement of functioning markets
Is it, and does it apply here? The employee is the seller who would declare the price. Employers are purchasing workers and I don't blame them for not trying to apply prices to products too much.
Flipping those roles is like telling customers to name their price when they enter a store. Customers would pay as little as possible, such businesses would fail to keep losses at bay, and other businesses that don't behave this way would survive.
The burden is on the employee to name their value, and the business can decide whether or not they want to buy. When employees don't name their value upfront, they're the ones acting like a shady business that wants customers to guess the price, since an unknowledgeable patron is likely to overpay.
Yes, price movements are how buyers and sellers in the market know the supply and demand curves are moving.
> The employee is the seller who would declare the price.
Both buyers and sellers can declare the price they are willing to buy and sell at. But that’s not important, only the price the transaction clears at is important for others to know.
> Flipping those roles is like telling customers to name their price when they enter a store.
Price transparency has nothing to do with whom puts out the first price in the negotiation. It’s only about knowing what other transactions cleared at so you have an accurate idea of supply and demand. Also, people looking for long term employment is not analogous to purchasing a low cost item in a store.
> Customers would pay as little as possible, such businesses would fail to keep losses at bay, and other businesses that don't behave this way would survive.
This is not true. Depending on supply and demand, buyers or sellers can have the upper hand in a transaction and who is naming the price first has nothing to do with which price is accepted by both parties, and certainly does not predict what business survives and not.
> When employees don't name their value upfront, they're the ones acting like a shady business that wants customers to guess the price, since an unknowledgeable patron is likely to overpay.
Bartering on price is not shady business. People do it all the time with large purchases, such as cars, real estate, wages and in poorer countries, even clothing and food. When employees don’t name their value, they’re simply might be doing so because they don’t have the clear upper hand in the negotiation, and are not willing to upset the other party. Or they want to let the other party name their price, and go from there. There’s nothing wrong with various negotiating strategies.
What is clear, is that 90% of people have very little information of supply and demand for the labor market compared to employers, so they obviously are at a disadvantage. The solution is websites like levels.fyi, that even the playing field so employees know how the supply and demand curves are actually moving.
Other than salaries, where do you see a lack of pricing transparency in the US that can be found elsewhere?
About salaries you can get a good idea by talking to people and with sites like glassdoor. The ballpark range of salaries isn't such a secret.
And, to elaborate on my previous comment, if a business were to advertise salaries, it'd be easy for a competitor to outbid them for employees they really want. So that system just wouldn't ever become the norm.
Glassdoor isn't a magical truth ball, it depends on 1) random users putting in info, and 2) putting in correct info.
For issue 1) you have a selection bias, and for issue 2) you have no way of knowing if that salary is for a hotshot with a great resume, 6+ years old and out of date, or anything else has changed within the company or field. And in a lot of cases the ranges are crazy large, almost uselessly so.
With a number in the actual job ad you know exactly where you're at: "SWE 2 @ 120k + 20% bonus + misc."
Glassdoor/others are good for ballpark ranges which is good enough for me. If you want to know ahead of time, there are some employers who opt into that. IMO the value brought by a human being is complex and they deserve a chance to argue their worth, so there is no sense in advertising a price point that may vary. We are all primarily competing against ourselves in a sense, and allowing wiggle room on compensation lets employers and employees make better connections.
If you don't want that, go to a union, work for a government, or do something with an hourly wage.
> Other than salaries, where do you see a lack of pricing transparency in the US that can be found elsewhere?
I’m not sure what the relevance of this question is, but I presume there might be countries where real estate sale prices are not public record. I think this is the case even in the US state of Texas.
> About salaries you can get a good idea by talking to people and with sites like glassdoor. The ballpark range of salaries isn't such a secret.
The internet is helping a little, but forums and sites like levels.FYI are much better than Glassdoor I think, which sells to employers so I would not trust it.
> And, to elaborate on my previous comment, if a business were to advertise salaries, it'd be easy for a competitor to outbid them for employees they really want. So that system just wouldn't ever become the norm.
If every business had to do it, then everyone is similarly advantaged/disadvantaged. The internet is already helping. For example, I would welcome a Swedish style system.
That question was in regards to your comment about price transparency being taboo in the US. I don't see that. What I see is, if you choose to do it, that is your right. However, forcing every employer to disclose salaries of every employee would be a significant change. There would need to be a good portion of the voting public backing that, in addition to consideration as to whether it's even enforceable. I don't see that happening any time soon.
This bothers me all the time. Several of the assumptions required to have a "free market" aren't met in the United States. If you try to have a conversation around that, you're a "communist", even though you're literally discussing how to have a free market.
Communism is basically orthogonal to the whole free market thing, though. Capitalism is defined as a system in which you can pay somebody a wage that's less than what you get from selling the products of their labour. Other than some basically technocratic stuff (how do you make sure workers are properly compensated) there's no specific communist problem with free markets I can think of. There's also no shortage of capitalist nations that were extremely anti free markets.
It's at least somewhat coincidence that communists have typically gone for high state involvement - Russia was, before it was communist, basically an entirely non-free market, and most industry happened at the behest of the Tsarist bureacracy, which was massive. So the USSR was big on state planning kind of as a continuation of that.
I see this sentiment a lot, but it seems blatantly false.
This assumes that employees are a fungible commodity whose price should be set by some efficient market rate, but that's not true at all.
Under the current regime, the setup helps top performers be compensated more highly, without torpedoing morale.
You can fantasize about a world in which the salaries are transparent and everyone has frank conversations like "Yes Jill makes 50% more than you even though you're nominally at the same level. Her compensation reflects her superior contributions to the company." But that's just not how it is.
It's weird that you call this "blatantly false" and talk about "the current regime", but my whole point is this "regime" only exists, culturally, in a relatively small subset of countries. I don't need to "fantasize" about how this would work because many other countries are already completely transparent about salaries. Not to mention that even in the US there are some locales that post everyone's salaries in government jobs, from the mayor down to the teaching assistant at the local university.
Also, FWIW, Joel Spolsky pretty famously detailed his company's transparent compensation plan, which took into account both experience and unique skill set.
Yes, the solution in different regimes is to homogenize compensation, as government jobs do. And my point is that doing so is worse for top performers who would tend to be paid more than the homogeneous compensation would give them.
There is that old Steinbeck gem about how poor or middle class Americans don't think of themselves as that, but as temporarily embarrassed millionaires. Hence wanting to hide their real worth.
How do you sell conspicuous consumption / Veblen goods to people if you can know, for sure, that they're really broke af?
I think that if you took the US exactly as it is, then make tax records public, after the initial explosion of interest, nothing particularly would change. The reason is that although the records would be available, only a tiny fraction of people would look at them a tiny fraction of the time.
On the other hand if you took Sweden as it currently exists, and put up a real time scoreboard on every office wall with the name and total comp of all employees (or all employees of that particular department, or whatever), you'd have pandemonium--except in workplaces with homogenized, formulaic compensation.
At my previous job the most highly paid developer used to regularly say at standups "yesterday I did nothing, today I will do nothing". However he was confident at good at negotiating
You can just ignore the question and answer "I'd be looking for a TC of x". See what they say. Make sure to add 20% to the TC because they didn't answer the question
A lack of transparency really only aids the employer (after all, the employer knows what everyone makes, and with salary comparison services they know exactly how competitive their salaries are).