Ask HN: Why don't people talk specifics about money and salaries?

[nathanbarry]

Growing up neither my parents or friends of my parents talked about specifics around money. Not only how much everyone was paid, but also how much they paid for a car or a house.

When I went to negotiate my first salaried job I had no idea how much to aim for. Was $30,000 a reasonable salary? $60,000? I realized then that everyone's aversion to talking about money had left me in the dark as to how the business world worked.

Why is everyone so hesitant to share their salaries and other financial information?

Note: I know that it is against company policies, at many companies, to disclose your salary. Is there a reason besides this?

Edit: Has sharing financial information, either personal or about your company, ever caused you problems later? I would love to hear some good stories.

[sakopov]

Simple: it only benefits you, not your employer. Here is a personal example from a not so distant past for me. The economy tanked when i graduated from university with my Comp. Sci. degree. It seemed as though every company in the area was on hiring freeze. Relocation didn't seem like a good option at the time. So, i was offered 35K at the place i was interning, when i was supposed to start out at 50/55K considering experience. During my stay there i busted my butt, was praised for my work, got amazing annual reviews, promoted to senior software engineer and over 2 years got bumped to 60K. My manager actually told me i am the best resource on the team. Anyway, i was lead to believe that the company just didn't pay much their software devs. Until one day i was talking to a friend of mine, a very talented web designer who was actually hired at our company to do web design but them got bumped to our engineering team. He told me he was offered 75K and knew that some folks on our team made 85K. My jaw dropped. I left the company 3 weeks later. The new place doubled my salary. I was counter-offered at, again, a much lower number than others on the team. Would any of my hire-ups wanted me to know this? Of course not. They'd lose me earlier. This is how you retain people.

[buro9]

Hey, I downvoted you because of fat fingers and a tablet. I hope someone else will upvote by way of undo, as that is what I intended.

I've been through the same experience. Not once, twice.

On both occasions I resigned the instant I discovered the discrepancy. On both occasions the reaction by the companies was to suddenly offer a wage correction. But the disrespect had already been shown in my opinion.

I'm in favour of transparency now. I'm also in favour of clearly understood titles/levels, with knowledge of how to progress and what it means to be at a level (not a hierarchy, but a personal learning progression).

Whether or not this works for non-engineering roles I've yet to find out.

[ChuckMcM]

The answer is actually pretty simple, it causes a lot of problems and very little is any "good" comes out of it.

The problems seem to originate from two things; first people often judge their own 'worth' by comparing their work output to others, and two, people who don't understand the details of a particular job seem to think it is much easier to do than it really is.

So in the first case person A, who thinks highly of themselves, and very poorly of a co-worker person B, finds that the co-worker is getting more compensation than they are. This triggers a management issue where someone has to explain to person A the discrepancy. There are a number of real explanations (like Person B is actually doing a harder job and/or providing a more valuable role) that Person A, may be unable to accept.

Or person B may have a role that is significantly different, like they are in marketing (vs engineering) or finance or analysis. Can you compare salaries for someone who cranks out a thousand lines of code a day with someone who can tell you precisely which of those lines of code are making the company money and which ones aren't? Both are great skills, that latter is harder to find, you might pay them a bit more. But explain that to the person writing code? Not easy.

When I was at Google it was proposed a number of times (by engineers) that everyone's salary should just be part of the info available. They didn't do that, but I could see someone like the 37Signals folks or some startup doing it from the start.

I've not worked at a company where that was the case so I can only speculate on what it might be like. For folks who were internally OK with their own perception of self worth it wouldn't matter, for the sociopaths it would give them a new game to 'win', for folks who were not OK with their own self worth it would be devastating.

I do know that individuals can change this, so when your out socially talk freely about specific amounts of money you earn, or save, or spend. But be forewarned that it will make them uncomfortable. But if you can get a community built up where its considered the 'norm' then converting your workplace to use it (assuming they have enough of that community employed) can work.

[FreeKill]

I find a lot of government and academic work operates in the way you described. A lot of times, the job titles are known and have a pay rate or pay scale associated with them.

Everyone knows, for example, that a software consultant level 3 has a pay rate of $XX.

The biggest negative to that type of system, that I've experienced, is that it's hard to incentivize great employees when they are already at their max pay range. For example, you can't give them more money for great work. Also, since everyone knows what everyone else is making, it tends to sometimes create resentment if you think someone else, with the same title or pay scale, is doing sub-standard work compared to you. This generally makes the person less likely to work as hard as before or contemplate other opportunities.

On the positive side though, you don't generally have as many arguments over wages and definitely no surprises when you find out someone's salary. Plus, everyone is well aware of the rungs of progression in their current position, so you tend to know when promotions are warranted and what you'll get as a result which takes a lot of the "I hope they recognize how hard I work" or "I hope I can get $XX more dollars after my next review" out of improving your career. You know exactly what that next rung provides you, and so does everyone else. Therefore, it removes a lot of stress of uncertainty but also possibly diminishes some of the more "go getter" type spirit since you know exactly what it takes to progress, so why go above and beyond?

Here's an example of what I'm talking about, in Ontario (Canada) all public sector salaries > 100K are published publicly. The < 100K public sector salaries are basically public too, just not published on a website :)

http://www.fin.gov.on.ca/en/publications/salarydisclosure/20...

[malvosenior]

Is it really harder to find a great marketer than it is to find a great engineer? Are Google's marketers really on par with their technical talent (from the outside it seems like a clear no).

It's interesting that the engineers wanted salary transparency, that's been my experience as well. I've always thought salary has more to do with perceived class of role in society opposed to value created (in most companies).

[reinhardt]

> I could see someone like the 37Signals folks or some startup doing it from the start.

http://lincolnloop.com/blog/2012/may/31/lincoln-loop-everyon...

[mbesto]

This is interesting, because it's mainly an American thing. My friends in Sweden, Norway and Germany never hesitate to speak about compensation. Here in the UK, it's sort of in between.

My theory is that American's believe the ability to assess your own salary and worth is largely part of the attributes of success and worth. Other countries believe more in the employer to define this.

Cool fact - In Norway, everyone's income is public domain: http://skattelister.aftenposten.no/skattelister/start.htm

[e12e]

I believe it is the same in Sweden and Finland as well.

In Norway only a few years worth of data is available on line (2007-2010 IIRC) -- after a bit of future shock an amendment was passed to prevent newspapers etc to archive the data and make it available in perpetuity on line. The original intent of the law (when the lists were published in local newspapers) wasn't for the data to be used for other purposes than to check what your peers, your boss, or the prime minister (and other politicians, effectively employed by you) were making.

This whole thing about not discussing compensation seems silly to me -- the only thing I can see come from it is a sort of prisoners dilemma wrt compensation. Your employer knows what everyone's making, but you only know your own salary. End result: Your employer has a stronger bargaining position than you. The whole thing falls apart in the face of unions, of course -- as the union will know what everyone is making anyway.

Either way I think the compensation given to leaders in a company should be know at least internally. Unless they get an unfair share, in which case something should be done either way.

But we are rather strange here in Norway; on a related note, a left-wing newspaper recently made a small splash with its flat salary structure -- everyone earns the same salary, only modified seniority:

http://translate.google.no/translate?sl=no&tl=en&js=...

[INTPenis]

That's funny because I came here to see if anyone was pointing out how common it was in Sweden for people to avoid the subject.

I'd say it varies from person to person though because me and another guy at my department managed to get others to open up just by being open about it ourselves and joking.

The sad thing that some people can't endure that without turning it into a pissing contest for some sort of imaginary alpha-male position.

[nathanbarry]

In Idaho, the US state I live in, all government salaries are public. Many people are shocked to be able to find out how much their neighbors make as teachers, police officers, and bureaucrats.

[plant42]

As a Brit living in Norway, I thought it was strange when I first learned of the tax lists being published for public consumption.

I have to admit to looking up people I know, celebrities, and others on the tax lists. More out of idle curiosity rather than anything else.

[danmaz74]

Italy is pretty "private" about this. I personally revealed my salary to some of my colleagues, but I see a lot of tension when the subject is talked about.

I think that a big part in the general attitude is due to the very high tax evasion rate here. Many people have something to hide about their revenues...

[atesti]

I'm from Germany and I can only say that everyone I know does not speak openly about compensation. I would never reveal any numbers to anyone else, even close friends.

[_delirium]

In the US, mostly worries about social problems from disparities. Parents may not want their kids to know if their family is substantially wealthier or poorer than their friends' families. Heck, adults might not want to know it either. At some level of very-wealthy or very-poor it becomes obvious, but there's a broad set of salaries in the middle that are broadly lumped in as "middle class". Many people in that tier think of themselves as just middle class, and socioeconomically roughly on par with other middle-class people. To maintain that polite fiction, it can help not to know that you actually make 2x as much as your friend, or vice versa (in many middle-class communities, salaries of both $120k and $60k can be found).

Companies similarly worry about a hit to team cohesion that could result if team-members find out that some of them are paid much more than others.

[EmployedRussian]

"In the interest of fairness, Fog Creek's compensation policy is open, public, simple, and accountable. Many companies try to obfuscate the rules they use for determining compensation in hopes that they won't get caught paying some people too much and others too little. Some companies actually consider it a firing offense to reveal your salary!

We feel that in the long run, this can only hurt us through negative morale, high turnover, and destructive office politics."

http://www.joelonsoftware.com/articles/fog0000000038.html

[nathanbarry]

That makes a lot of sense. Especially for younger kids. Though I wonder if, at a certain point, the loss of financial knowledge is worth the tradeoff.

[sbov]

Your kids probably know better than you if you make more money than their friends' parents. With sleepovers and carpooling and all the time and activities they spend on both sides, there's really no way to hide this, especially at a $120k vs $60k disparity.

[Cushman]

We could talk all day about the various sociological explanations, but there is one very clear economic incentive for the salary taboo:

It enables companies to pay employees as a whole much, much less.

Doesn't need much more explanation than that.

[crazygringo]

The flip is also true. It allows companies to pay more, too.

If you publish your salaries, and along comes a super-talented programmer who asks for more than standard, but has unique talents that don't really fit on the standard "scale", then you can bring them on board, without creating resentment, etc.

I've worked at a company with standardized salaries, that lost out on hiring the best programmers, simply because their salary system (everybody's titles linked to salary grades everyone knew) was too inflexible.

[jerf]

Yes, it does. If that is the reason, then what is the motivation for the employees? Explaining why employers want employees to keep it secret doesn't help, because it is the employees keeping it secret that we are talking about. You need to explain why the employees are keeping it secret, given that you've effectively described why employees would not want to keep it secret.

(I'm not saying there isn't such a motivation. Clearly something is at work here. I'm saying you're explaining the motivation of the wrong set of actors.)

[drupeek]

Access to information would also mean that employees lobbying for an increase, would have to justify their performance against their peers. That's a lot more personal and objective than simply stating, "I think I'm doing great."

Essentially what I'm saying is that I'm not sure I agree that open salary information would result in all salaries moving upward.

[anothermachine]

How does that explain social behavior among people working at different companies?

[akaru]

Agreed. I would be interested to see a historical analysis of this. I suspect it is a relatively new phenomenon, promoted by corporations themselves.

[losvedir]

I dunno, just an American cultural thing, and varies by country. When I was in China, it was just a natural part of conversation: "Where are you from? What do you do? How many brothers/sisters do you have? How much do you make?"

I'm cringing at all the responses in here saying "this is why", as if it's some universal truth, when really it's just rationalizing the particular culture people have been steeped in. Why don't women walk around topless at the beach? Just culture. Some cultures see it as perfectly normal.

I wish people were more okay with it here in America. I make it a point to answer honestly if anyone broaches the subject, and to ask my close friends. Doing my part to change things. :)

[azakai]

> I'm cringing at all the responses in here saying "this is why", as if it's some universal truth, when really it's just rationalizing the particular culture people have been steeped in. Why don't women walk around topless at the beach? Just culture. Some cultures see it as perfectly normal.

Yes, it is cultural, but the answer isn't "it's just culture." There are reasons why it fits in one culture and not in another, and those reasons are interesting.

I realize people saying "it's like this because X" sounds like they are saying something universal. But they aren't. What they are saying is why, given other factors in their culture, things are that way.

Of course it is possible there is no reason for something in one culture. Random things happen. But even if they do, typically those things have effects and other things affect them, and all those things interact in ways that eventually settle down in some fixed point we call "the current culture". And even there, we can say a lot about why that random thing remains and does not vanish, or why it was not changed in a fundamental way, etc.

[novemberin]

It's totally cultural. In the US, people who have enough money to get by don't talk about making or spending money. And they don't really want to either, because it allows people who make 60K a year and people who make 250K a year to both call themselves "middle class". Even close friends don't necessarily know each other's salaries.

But all is not lost. It's hard to find a startup job where you won't be working closely with people from cultures where discussing your salary, rent etc. is perfectly normal.

That's how I was able to discover that as a woman I was making 75% of what my male colleagues were making. That's a Pandora's box type discovery, and I did stew on it for a while.

But I liked the company, and I didn't want to leave, so I saved that information for the end-of-year talks. They ended up bringing my salary level with the others', and then I was asked politely not to do that again.

It was quite uncomfortable for my boss - despite what you may think, your boss probably doesn't remember your exact salary - and I think my salary was an oversight (I was one of the earlier employees) rather than an intentional slight or because I'm a woman.

But still - what are the chances that could have happened if I hadn't asked my colleagues?

Don't ask, don't get.

[HeyLaughingBoy]

your boss probably doesn't remember your exact salary

I understand that you may be rationalizing it, but I find that hard to believe. I may not have remembered my direct reports' exact salaries, but I certainly knew who made more than who, by approximately what percentage, and why each person was paid what they were.

[infinite8s]

Why did you wait until the end of the year? I think that approach would backfire, since bringing you up to par probably 'consumed' your raise potential, so you would still be behind your colleagues who would be getting raises at the same time.

[lazyjones]

If your parents never talked about money, you're lucky - you probably grew up having enough of it not to worry. In poor families, money is a popular topic. I suspect that is one of the reasons why the nouveau riche brag (talk) about money frequently, while those who grew up rich are more discreet.

As for salaries - it's a cultural thing, in the US/UK it is common to mention salaries in job offers (so you could compare easily), in other countries it isn't (or wasn't, like here in Austria, where new laws require mentioning minimum wages ...).

[phamilton]

I grew up in a family where money generally wasn't talked about. It wasn't because of a taboo necessarily, but because of a lack of importance in our lifestyle. We had enough, and we learned to get by on what we had. Now that I'm on my own I feel like that has become the baseline. Until evidence suggests I don't have enough and that I can't get by on what I have, it isn't really that important to me. I don't lack ambition, it's just that money has never been a goal and most likely never will.

[nathanbarry]

Actually, I always knew that my family didn't make much money. But didn't know specifics until I was 18 or 19. Most years it was less than $35k per year.

[Spooky23]

Secrecy around compensation became widespread when anti-discrimination laws came about because it's easy fodder for complaints and lawsuits.

It's pretty trivial to figure out what household income is within 10% if you know a person at all. Your privacy isn't something that employers give a hoot about.

[nathanbarry]

Related: has sharing financial information, either personal or about your company, ever caused you problems?

I am very grateful to everyone who showed me, through their transparency, that it is possible to make a living through self publishing books and software, so I've made a commitment to share my own numbers.

But I'm wondering what problems this transparency has caused as well.

[OafTobark]

I've shared numbers openly my whole life, never had an issue. I understand why company policies exist though in our own company, we never implemented any such rule. As with the rest of the world, I've never not told. If anything, it irked me a bit that others weren't open about it, especially if they were asking me those same questions.

I can't say my experience speaks for everyone else, but I can't imagine why it'd ever be an issue disclosing these things openly.

[cluutran]

People attach a lot of emotion to it. If you make a lot, then it's bragging. If you make very little, it's embarrassing.

I think the more we talk about it, the more we have to gain. It only hurts bad employers.

[nathanbarry]

Yep, there is a lot of self-worth attached to how much you make. Maybe that is something we should fix?

But if it wasn't for a few friends sharing how much they charge for consulting I would never have known it was possible to charge $250/hr (and much more). I would have been stuck charging multiples of the hourly rates I had heard about (Maybe I would have doubled the highest hourly rate I had heard at the time, which was $20 an hour).

[caw]

I agree, it's a very emotional topic for people. I don't want people to treat me differently if they knew how much I did or didn't make. Things like anonymous polls and glassdoor give you some idea of the market as a whole, but there is a perception of "bragging" if you make more than the other person.

When my friends and I got jobs after going to college, we disclosed how much we were getting as far as offers go. Of course, we were going across the country, and the rates in Atlanta is not the same as New York or San Fran or Seattle. But we also had the same job during college, and knew how much each other made because of that (fixed pay scale for interns).

As a counter to this, my co-workers and I were buying a retirement gift for another co-worker. We had in mind what we were going to get, but on sudden impulse in the store we decided to upgrade the item. It was mentioned that what we had budgeted wouldn't cover the new item, and a co-worker said "it's OK, the boss [also part of this purchase] can handle it, he drives a Mercedes." It's comments like these that make it awkward to share salary information. Outward displays of wealth have no bearing on income, that's simply what they choose to spend their money (or debt) on.

[lutusp]

> Why don't people talk specifics about money and salaries?

Writer can't think of an explanation for secrecy about money and salaries.

> When I went to negotiate my first salaried job I had no idea how much to aim for. Was $30,000 a reasonable salary? $60,000? I realized then that everyone's aversion to talking about money had left me in the dark as to how the business world worked.

Writer inexplicably still can't think of a reason for secrecy about money and salary.

The reason is obvious -- keeping you in the dark pays off. The employer benefits from your ignorance. Other people in your approximate position, but who have the job you seek, benefit from your ignorance. Everyone benefits from your ignorance except you.

All I can say is, wait until you actually have some money and/or a salary. Then you'll understand.

> Why is everyone so hesitant to share their salaries and other financial information?

Because information has intrinsic value, and particular kinds of information have high intrinsic value. How many times have you read about a settlement between businesses in which the terms were sealed by a court order? Can you think of a reason why?

[lakeeffect]

Employers have an advantage by discouraging workers from knowing the average wage they can lower the common wage. Its been adaptive culture to not speak of wages, hence the importance of union standard wages as a need to help those less skilled in finance and valuation not get undercut.

[gte910h]

Those with information about salaries have power. Those who do not have them do not. Do not tell yourself stories to make you think it's good you don't know everyone's salary. You're disadvantaged by not knowing it.

Just like you're disadvantaged when you fill out the "past salary" boxes on job apps.

[rayiner]

It's awkward and not relevant information. You can get on payscale the same as everyone else. Especially in the US where income is really significant in terms of basic needs like healthcare and there is no cultural norm that all sorts of work are respectable and worthy.

[theorique]

It's extremely relevant.

Wouldn't it be interesting to know that you had received a higher offer than your peers because the company wanted to hire you that much?

Or that you were lowballed but your negotiation skills brought your salary in line with averages?

Or that you are being paid 30% less than the other members of your team doing the same job?

All extremely relevant things to learn.

[colmvp]

How is not relevant information?

[e12e]

On a side note, at least in Norway, every publicly traded company has to file a yearly earnings report, with income and expenses. Seeing how much is spent on salaries, divide by the number of employees, and at least you know if you're paid above or below average (just remember to allow for certain tax expenses the employer pays as "part" of the salary, I suspect that would be different in most countries).

Not feasible (or meaningful) if you work for IBM, maybe -- but for a smallish company that should work. If you can't do that math, you probably shouldn't be doing software engineering either...

[akaru]

I think the only thing non disclosure benefits is the company. I lived abroad for many years, and salary was freely discussed. I think doing so is great for an employee.

[johnrgrace]

First, salary is often times the most direct way a company says how much you're worth. Thus salary in our monkey brains equals status, and real or percived differences leads to conflict.

Second, some companies like to get away with underpaying people. I'm not sure it's smart but they do. I know I worked with someone who did the same thing I did for 45% less.

[rpeden]

In some cases, it's not just against company policy, but is included in the employment contract the employee signed when they were hired.

I guess the legality of such a clause will depend on where you live, but for people who have something like that in their employment contract, the risk may seem significant enough that it isn't worth violating it.

[michaelochurch]

Technically speaking, a company can't legally fire you for disclosing your compensation. That's an anti-union-busting law.

What this means in practice is that they'll make up "performance" bullshit (unrealistic deadlines, retroactive shortfalls, responsibilities without the support necessary to achieve them) and fire that person over that instead. One of the reason for companies to have "low-performer" witch hunts (also known as stack-ranking) on a periodic basis is to flush out the "troublemakers" they dislike but can't legally fire.

So I don't know how much protection those laws actually provide, but it is technically true in the U.S. that no one can be fired for disclosing his own compensation.

[pebb]

It is illegal to forbid discussion of salary. Federal law.

[michaelochurch]

Unfortunately, compensation is taken to be like a performance review, but objective, so you often need to change your story later for career reasons. In finance, some firms won't hire analysts who didn't make top bonus, which means you need to figure out what that level is-- and it varies widely. (Top bonus in a shitty year is often less than the lowest-tier in a good year, at least for entry-level roles.) If you let too many people know what you make, it gets harder to reshape your story if you need to do it.

(By the way, this should be obvious, but you should avoid naming numbers unless you absolutely have to. If a future employer asks what bonus you got, just say, regardless of what's true, "I received the highest bonus available for my role and seniority and I'm contractually disallowed to give specific numbers.")

This is also an area where it's hard to tell whether you'll need an upward or downward revision until you're in that situation. Upgrading makes it look like you were a strong performer whereas downgrading gives you a socially acceptable excuse for leaving a job or a better "trend". Of course, the smartest thing to do is not to give these numbers out ever.

I actually think LinkedIn is a bad idea for a lot of people, for the same reason, but pertaining to job titles and dates. Accidental consistency risk is enough of a danger (people who forget their exact job titles 12 years ago) to be cautious, and then consider the fact that, although people don't anticipate ever needing "creative career repair", shit happens and sometimes people do.

Finally, my attitude is just that it's none of anyone's business what I, personally, make. I'll gladly share my estimates of what various levels of engineer can earn on the market as it currently is, and my general sense of what engineers are worth, but strategically important information ought to be safeguarded, especially in this world.