Monday, February 4, 2019

The Wage Gap, & Sharing Salary with Women

The Wage Gap & Sharing Salary with Women Coworkers
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"We are labor. They are management," Ang, my coworker friend from the other side of our cubicle wall, reminded me.

"I know. But I'm new."

Without me realizing it, as a 21 year old employee who knew nothing about anything, Ang was mentoring me, as well as advocating for me to be reclassified. I was technically doing the work of a buyer, while being paid as an administrative assistant. 

If she was right, I'd be reclassified into a new role with a higher salary. But submitting formally for a reclassification was tricky: we had to involve the union, human resources, my own boss. And it might not work, which could be a career limiting move. Would my boss view it as a slap in the face?

I was uncomfortable with the idea of rocking the boat, and the $24k I was pulling in was more than I was making before, and way easier to earn, compared to when I was working at the Red Cross during the day and then at Hollywood Video at night. Why jeopardize a good thing?

"I just started here a year ago, Ang, and they're kind of doing me a solid by giving me this new work as a trial run..." 

"Don't side with them," she reminded me. "I am on your side. The union's on your side. We're labor. They are management."

While I'm not always in favor of seeing the world through a competitive, zero sum lens, when it comes to your workplace, I think Ang pretty much had it right. There is labor, and there is management, and they really are two different camps that just happen to cohabitate the same office space. 

As it turned out, she had the right call all along. I was reclassified to a buyer, got a big pay bump, and was on my way to being a procurement professional.

While I haven't been in a union or in government employment for about a decade, the way Ang framed things stuck with me. There is a real divide in a workplace, which isn't a bad or contentious thing, necessarily. There are the workers, and then there are the people managing them. These groups are often embroiled zero sum negotiations, and ones in which management has outsized power.

Forgetting that divide, perhaps by framing the workplace as "one big family" (one which just happens to systematically underpay some of its cousins and daughters), can have huge, negative impacts on your compensation.

Now that I'm in the private sector, without the formal organization of a union, I've tried to build better work relationships. One of my goals is having a close enough bond that we can eventually discuss salary, if both of us are open to it. Once a year or so, I'll meet one on one with some coworkers, and we compare what we make as well as what raises or bonuses we receive.

Why bother trying to have these conversations, since they violate a lot of established workplace norms?

My initial motivation was a sense of fairness. The people who put in the effort, and who get the results that matter, should be compensated for that. The kiss-ass who putzes around on the internet all day and never has any measurable impact shouldn't be paid more than those who are doing all the work. 

And, besides, transparency is a worthwhile goal all on its own. Management can easily justify almost any compensation it offers during an employee's annual review, if there is no benchmark to compare it to. Is $75,000 a competitive salary for this job in 2019? 

Is it more or less than the average of your coworkers' pay in the same roles? 

Is a 5% bonus good or bad, considering what you accomplished this year?

These questions can almost never be answered when the compensation data is opaque. When all the workers are in the dark, each worker is always negotiating from a position of weakness. Management knows every worker's salary, while each worker has no idea whether they're being paid more or less than the other workers. 

This information asymmetry gives management an almost laughable advantage: they can pay deserving workers far less than others, let the wage gap grow ever larger throughout their careers, and the worker has no idea it is even happening.

Even if a worker manages to negotiate an extra $5,000 a year, she still doesn't know where she stands. Does that extra $5,000 now bring her in line with her peers with similar accomplishments and tenure, or is she still being underpaid?

And while it's helpful to think of all the issues an individual worker faces, we can also step back and ponder the systemic issues with compensation. Women earn less than men in the same roles, and the figures are far worse for women of color

2017 figures from the Institute for Women's Policy Research. Link

2017 figures from the Institute for Women's Policy Research. Link

Recently, I've tried to view these salary conversations within the context of the wage gap. As a man, I benefit from the status quo, wherein my salary is opaque and is also higher than it would be in a truly fair system: one that offered equal pay for equal work.

Simply put, I benefit from the wage gap. 

If I realize that, but choose to keep quiet because I don't want to rock the boat, then that is a tacit endorsement of the wage gap. And that sucks. 

On the plus side, the two most recent conversations I've had with women coworkers showed that they were, in fact, earning less than me, despite us being at the same band level, earning the same 'grades' on our annual reviews, and the fact that I have fewer years with the company.  

Now that my colleagues have some concrete information to compare their salary and bonuses to, I'm hopeful that they're able to negotiate from a position of strength in their next discussion of compensation with management.

Since these conversations are inherently sensitive, I try to be mindful of some guiding principles. If you're reading this and want to try something similar for your workplace, perhaps they'll help.

First, I am careful about who I have these conversations with. These talks potentially can be risky. While there are federal protections for workers discussing wages at work, so you should not be fired, I also can't see management promoting or rewarding an employee with outsized bonuses if they know you're just going to turn around and tell your coworkers about it. 

If word gets out, the opportunity costs could be huge. So I only broach the subject with coworkers I know very well, and whom I trust to keep a secret.

I also try to set expectations about what we will talk about before we jump right in to it. 

Are we both comfortable sharing the same information? Current salary only? Bonuses and raises, too? Past salary and review information? 

Can we both commit not to share the other's information with anyone else, especially management in a negotiation? (e.g. "I know you're paying Brian X, so I need that as well.") 

Do we want to chat again next year after reviews: to establish a yearly meeting, so we can keep sharing this information, and both keep benefiting?

At my current company, all but one of the coworkers I have these conversations with are women. Part of that is by design, part by dumb luck. But since that's the scenario I find myself in, I try to be cognizant of the dynamics that might be in play with these conversations. I might be earning more, and it's always weird to hear that a colleague is earning more than you. Women are subject to more discrimination and harassment in the workplace, so I have to understand that not everyone may be comfortable with the risk of word getting out. And not everyone sees themselves as part of 'labor', in an ongoing, Marxian struggle against those who own the means of production. 

Sometimes, our talks end with a call to action. Now that we've talked, what do we want to do with the information? Since we've gotten to know each other over time and understand enough of each other's work efforts, styles, and accomplishments before jumping into this sort of intimate conversation, we can proceed with a bit of confidence with next steps. I can suggest, "I think it's only fair for you to ask for an 8% raise given what you've accomplished this year, or at least to set that as an expectation to be discussed in the next review if you meet your goals in the coming year."

These talks also give me a better perspective on my own financial situation. I sometimes get the feeling that I am underpaid: that I'm not being compensated properly. I do a good job, right? Why shouldn't I get another raise?

But when I see the efforts of people around me, often women, who daily bring value to the table, and then think about how they are paid less than me, my perspective changes. I'm not only being paid fairly, I am probably overpaid. I remind myself that I am benefiting from this unequal system we're all working in.

So instead of feeling indignant, I try to remind myself that it's obnoxious to feel unsatisfied with my pay, since it's already unfairly in my favor. 

And if I dig a little deeper, there's more than just a feeling of gratitude: of appreciating how good I have it. There are these hard working people around me, women and people of color, who are being paid less than what they should for no good reason. While I can't force management to address the wage gap, I can at least give a little information to my colleagues so they have a target to hit: so they aren't negotiating in the dark.

And if I really believe that we are labor, that all of us people working for companies and governments are part of some unified group, then it's kind of our duty to address the fact that a lot of women, a lot of people of color, a lot of whomever I want to think of a "labor", are not being paid enough. They are not being paid fairly, and we men and we white people are benefiting from that inequity.

What do we want to do about that?


**A quick side note. I had really wanted to discuss sharing salaries in a recent interview with Tanja Hester and Matt Lane on The Fairer Cents podcast about being an ally to women. But as soon as the interview started, my midwestern upbringing shifted into overdrive and my inner voice started chastizing me: "This is going to sound like bragging, Brian and no one likes a braggart. Besides, who are you to talk about women's issues in the first place?"  

So, of course, I said nothing about it, even though sharing salary was the one thing I planned to bring up. If you happen to listen to the episode and wonder why I have so little to bring to the conversation, now you know why, and at least I finally put my thoughts down here. 

Momma always said I had a face made for radio, but it seems I also have a crippling social anxiety better suited for print.

Nonetheless, please still give the show a listen because Matt, Tanja, Kara, and some guy that, I guess, has something to do with a television program (?) are still on the episode, and they all have lovely things to say.

As always, thanks for reading.

18 comments:

  1. I'm curious about how you first brought up the subject of sharing salaries. I'm fairly close to my coworkers and previous coworkers, but I'm not sure I would ever be able to break down the taboo of speaking about our salaries and bonuses.

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    1. Hi there, Justine!

      I should say that my first attempt went poorly. (Should have put it in the post but it's already way longer than I like them to be.) I first asked a close coworker, in the office, and her response was, "Don't ever, ever share your salary with someone." Not the response I was expecting.

      So, these days I make sure we're not in the office (say, having a drink at happy hour or at a lunch), or on a day we're both working at home, or even just asking to have a chat on the phone after work hours. The worry about someone overhearing you is enough to kill the conversation early.

      I usually just broach the subject after reviews, and ask "Would you ever be open to sharing how your review & compensation went, just to make sure management is being fair?" It's an easy enough opening that they can say no and it's hopefully not a big deal.

      And then since I brought up the issue, I offer to share my info first.

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  2. This is odd for me because I'm now part of management but I still have this sensibility ... and I also have a responsibility to management. It's VERY odd. But I can make sure that our approach to paying people is more fair and remove biases, and is based solely on merit, so there's that.

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    1. I can see that being a tough position, Revanche. But I can say pretty confidently that I'm glad someone like you is in that position.

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  3. Glad you're doing your part to help end the wage gap. Honestly, I'm not sure I'd be comfortable sharing my salary information with my one coworker. I'm pretty sure she makes substantially less than I do. (But to be fair, she's also puts in very minimal effort at her job, whereas I try to always go above and beyond.)

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    1. Hi there, Abigail.

      With only one coworker, I could definitely see that being tough to share that openly. And the situation you bring up, where the pay difference is perhaps somewhat justified, given the effort she puts in...maybe that falls in line with the main motivation for this, which is fairness.

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  4. Sharing compensation with current coworkers is so tricky! Here have been my experiences:
    -I told my boss at a temp job how much I made hourly (she didn't know), and she was horrified how little I was paid. They fixed it retroactively, but the HR lady who had contracted me through the temp agency pulled me aside and told me never tell people how much I made ever again.
    -I found out my male coworker friend started at a higher salary than me. Simply because he asked. I was a better worker than him and eventually became his boss. I vowed to never not negotiate ever again.
    -My former coworker was leaving her current job and asked if I wanted to apply. She told me what salary to ask for.

    So yes, I have benefitted!

    My nervousness with sharing with current coworkers is someone is bound to feel bad. And they can't easily ask for a raise to match the other coworker without it looking suspicious. I feel a lot safer doing it with former coworkers or people you're pretty close friends with.

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    1. Hi Luxe!

      I agree that it's a double edged sword when you share salary: someone is bound to feel worse when they see they make less. However, I rationalize it by noting that this is also the person who has the potential to benefit from the information exchange: they have the data point that gives them a target in negotiations now.

      And as you noted, you've seen how much this information can help!

      On the whole, while it can be awkward, I think the benefits hugely outweigh the negatives.

      There are better systems than what I do (i.e. - when I was in the public sector, all our salaries were public record). But in the absence of a systemic change, you gotta do what you gotta do. :)

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  5. Wow.... this is amazing!!! I have been having an idea of doing this in my company swirling around my brain for the last few months!!!
    I wasn't sure how best to do it... I was going to set up a private slack channel and then ask people I trust to join, but then I thought hang on, what if they can still read those messages... And even if they can't but somehow find out the channel exists... it won't look good and the fact there could be records/evidence of what has been said and shared is also not a good idea.

    I think covert chats with co-workers you trust is a good idea.

    It's not really for any gender thing at my work (it's probably 90% men anyway so chances a female is doing exactly the same job as a male it probably quite slim anyway) but I think there are lot's of unfairness in wages, from hearsay and vague comments people have made about wages and pay rises and so on. And I think sharing would obviously benefit LABOR, who must rise up and smash management. OK got a bit carried away with that last bit :)

    What is totally laughable is that they tried to make it out that the pay rise structure they bought in about 3-4 years ago was "transparent" and must have said that exact word about 20 times in the presentation, and I was thinking, this is about as transparent as a car window covered in horse manure!!!! So basically people now have to ask for a pay rise, there is no formal time for it or anything like that (although we still get quarterly reviews and so on). So no one will know who has even asked for a pay rise, let alone know who got one, or any idea what they might be on. It's absolutely ridiculous.

    Anyway... I applaud both your idea and for going out and actually doing it and redressing the balance somewhat in your workplace... you are a legend!!!

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    1. I don't know about all that, FIREstarter, but I'll take compliments where I can get them.

      Even if women aren't in the exact same role, I think the knowledge of what male coworkers are making might really help the women in your workplace. Maybe if you try it out, you could have a discussion with some of the women in your office?

      And as you said, there are broad benefits for us in labor regardless.

      And yeah, that system you are talking about isn't transparent at all. What a ruse.

      Now that you and I are both so close to FI, maybe we can use our newfound boldness to help out our comrades in labor. :)

      Good to hear from you friend. Best of luck on your upcoming FI decision!

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  6. Having worked in and around HR issues for over 20 years, salary structure is difficult for both sides -- employer and employee. I think Labor and Management is too wide a divide to make b/c as another Revanche pointed out in an earlier comment, she is now Management -- you can be a manager and still not be the ultimate decision-maker. So it's complex, and it changes company-by-company, even department-by-department. It's always worth it to advocate for getting paid what you deserve and to advocate for pay equity. The best way to go about it will vary based on the exact timing and circumstances of where you are.

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    1. I see where you're coming from, Costa Rica FIRE. I certainly don't want to make it seem like the manager is the sole decision maker: I know these payment decisions are a very large group decision with multiple stakeholder groups. In my experience, each person in the leadership chain is simply told by the person above what the money situation is for that group.

      Still, that entire chain, from the middle manager on up, is what I consider management: the people who dictate the decisions.

      I agree that it's nuanced, but I personally think the dichotomy is fairly apt in this case.

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  7. I spent nine years in a heavily unioned work force - aka we all know what each other earns to a point. I was low enough on the management scale to know what I earnt was the same as others - only the four figure bonuses were variable. As a women in a non traditional role (engineering, management of field crews) it did me well.

    Since leaving there and contracting, I asked for 37.5% more than I'd seen on their paperwork in the interview. They didn't bat an eyelid and agreed. Thankful too - as they cut the year contract short by a month or two. Not that I mind, as I didn't love the work. The point is more that I pushed hard for 'high' and met and vaguely discussed salary with the other contractor to ensure I was on par (he was older and more experience contracting, way LESS experience in the actual content of our work).

    Good on you - and thank you! So you should share and share alike.

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    1. Hi Sarah! It sounds like we have a very similar career path: I, too, spent about nine years in my government union job before leaving for the private sector.

      And congrats about negotiating so well on the salary: 37.5% is amazing. And you're right: pushing aggressively for the high figure is a great negotiating technique. Anchoring is powerful.

      Good to hear from you, and I hope all is well!

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  8. I make $24.72 an hour. I can't believe I don't make more than that by now but I am not interested in doing the things that would get me more money like becoming a project manager. Moving to a new job would most likely get me a pay cut. I don't really want to discuss my salary with my coworkers because I think they get paid a lot more than I do (but I am still curious). So, I have decided to stay and focus on saving enough to do something else more fun for a living. Plus, there are perks like being able to bring my dog to work sometimes.

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    1. Hi there, Daizy. It sounds like you have found a good spot, even if it might not pay as much as it should. As I get older, I appreciate no monetary perks more...like having our pups and my family around.

      I like the goal of focusing on savings so you can make a job move, too. I might do the same!

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    2. My parents didn't talk about their paychecks much but I do remember when my dad got to $25/hr before he retired. It was a big deal. This was back in 1995. He managed to support a wife and 5 kids and build two houses himself. I feel I am slacking a bit. Lol.

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    3. I hear you! My mom had a similar story she tells from time to time: she never made $20k a year in her twenties, never made $30k a year in her 30s, never made $40k in her forties, never made $50k in her fifties...but finally, in her sixties, she managed to make $60k and it was a huge deal to her.

      I wouldn't say you're slacking, for what it's worth. The entire economic system is different now. Unions, for one, are completely gutted. The pension system is done with. Outsourcing is a thing.

      Anyway, I just think it's hard to compare situations across generations. It's apples and elephants sometimes.

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