Diary of an ex-banker: How much do you earn?
Last month it was announced that Jeff Bezos had become the richest person ever in modern history (on an inflation-adjusted basis) with a fortune just north of $150Bn. My guess is that he was rather proud of this and happy for it to be widely known. After all, there must be a lot of competition amongst super-rich entrepreneurs…I don’t think the largest mega yachts are that size for purely practical reasons…so the news would give him extra kudos!
But for us mere mortals talking about our income or wealth usually makes us feel uncomfortable. They are private matters. I certainly squirm uneasily if someone asks me “How much do you earn?”
So, it begs the question, why do most people in the UK feel uncomfortable disclosing their income?
Perhaps the fear of discovering that you earn significantly more or less than your friends and colleagues?
As a society, we tend to value things based on their price. A more expensive branded washing powder is generally seen as better than a supermarket own brand even though the latter might be made by the same manufacturer and have the same ingredients. If you view your wage or salary as your ‘price’ for working, then discovering that you earn less than those around you could be upsetting. You could literally be seen as being ‘worth less’.
Conversely, a banker might feel uncomfortable in disclosing that they earn significantly more than a teacher or a doctor as the difference might be hard to justify in terms of status or value to society.
Part of the problem, in my experience, is that setting pay is a remarkably unsophisticated process. In my former life as an investment banker, whenever I recruited a new person to my team (ignoring graduates with little or no experience), HR would generally advise me to offer them around 10% more than their existing salary. The problem with this is that it entrenches any existing inequalities. And you can end up having colleagues doing the same job, with similar experience, having remarkably different salaries. So secrecy becomes embedded into the process to prevent conflict and resentment.
This, I suspect, is part of the reason that the gender pay gap has become so ingrained. Of course, there is recent legislation that seeks to address this through better disclosure, with firms employing 250+ staff having to publish aggregate figures. But it does feel like baby steps. I wonder if a bolder approach would work better?
Why not follow Norway where everyone has been able to see how much everyone else earns and how much tax they pay since 1814? Until 2001 it was in book form available at the local town hall or library, but since then it has been online.
I’m sure this is part of the reason why, according to the World Economic Forum, in 2017 Norway ranked second in the World for gender pay equality for similar work. The UK was number 15…up from 20 in 2016. The US came in at 49!
There are also companies such a Buffer that lead the way by not only disclosing everyone’s salaries but also how they are determined.
Would you feel comfortable if your salary was made public and available for all to see?
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Originally published at jsixq.com on August 14, 2018.
