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Au_Sand t1_iw2bkhm wrote

The Economist did a great study that found "pay transparency" laws actually result in an overall pay decrease of 2% to 6%...


mikescha t1_iw2ecbx wrote

Where is that study? I can't seem to find it. Was it cited on their podcast? If so, it might be the one below.

It found the laws lead to 2% declines, because:

"Our model predicts that transparency reduces the individual bargaining power of workers, leading to lower average wages. A key insight is that employers credibly refuse to pay high wages to any one worker to avoid costly renegotiations with others under transparency."

Another study posited that posting salary ranges provides information to other companies about what the role is worth, potentially leading to a form of collusion. This seems similar to the idea above.


enragedcactus t1_iw2rv6v wrote

My wife runs an HR department. She’s never had an issue doing market analysis to figure out what comp should be for different roles. There are tools and applications out there that already helped with this stuff. We live in Colorado so yes, it’s become a bit easier this last year. Nonetheless employers already had no issue figuring out what roles were worth. Collusion happened pretty recently without this in places like Silicon Valley with tech talent.


Fozzymandius t1_iw382w6 wrote

What sort of tools are there, names would be great especially if it's possible to access them as a private person. I use the OOH and what paltry other information I can find.


enragedcactus t1_iw4wenv wrote

As a private individual not wanting to spend money you’re only going to have access to things like Glassdoor.

If you want to spend a boatload the services are called comp surveys and there are a “bunch of companies that do them” (quoting my wife here).

A small positive externality is that these new laws will put downward pressure on comp survey pricing.


Au_Sand t1_iw2vmac wrote

It was cited in their recent podcasts on the subject. Maybe 2 days ago?


rugbysecondrow t1_iw422xf wrote

This. As an employer in a system with less transparency, I am more apt to give larger raises to people who actually deserve them. With transparency, I am less likely to give larger raises and I am incentivized to keep all pay low and all pay as equitable as possible, even though we all know employees are not equal.

This stat seems totally plausible.


XediDC t1_iw4p5j8 wrote

You just create different titles for the folks that would get larger raises.

So then the person promoted to “Sr CS Rep” or “Dev Level IV” or “VP, Product Ideation” gets a larger raise, and it’s still transparent and equitable. Plus it’s a more clear progression path for everyone to aspire to, while also allowing for defined well-paid non-management roles. Similar job roles can have some responsibility differences that make sense and that probably already occur. The title is also rewarding in its own right, while also helpful on their resume.

It’s not that hard, at least if you have the power to make the decisions to do it…within an existing corp it takes more wheedling.


rugbysecondrow t1_iw5d7bv wrote

Sure, but not every raise comes with a title change, nor should it.

If I have 5 baristas, and 2 are better than the three, I should be able to reward the better ones without a promotion, title change etc.


XediDC t1_iw5wpsv wrote

If it would cause an issue if pay was discussed (and I’d assume it will be) or transparent, then maybe a connected title or some other attribute could still help?

It’s been ~20 years since I’ve done retail mgmt but at the time I recollect at a small place we had a Store Manager, Assistant Manager, “3rd key” (don’t remember the real title), “Shift Leaders” and reps.

The “shift leader” position was a slightly higher paid position for exactly what we’re talking about. A bit of money and prestige, but not actually a supervisor or any real extra responsibility beyond what those that excel at naturally do. (The name wasn’t great as it did imply mgmt…I’d prefer something not sounding management. “Sr Barista” or “Coffee Artist” or…I dunno.)

Then the 3rd keys were entry level management that has keys to the building and could work without other managers there. But didn’t have to make major decisions, scheduling, were still hourly, and we always had a non-3rd key there on some other shift during the day.

Both served well for that middle ground, depending on if they should be and wanted to have any potential leadership role, or a non-leadership option for just really good at your job. (The latter I think is important, as a lot of great employees suck at managing people…an issue I see a lot in the corporate world.)

Anyway, just thinking out loud. Hope that doesn’t sound too critical. And I was on my phone with a headache for my first response which…was snippy.


chrispyb t1_iw2dmhe wrote

Here's a podcast from them, haven't found a full article or study yet


TNI92 t1_iw2oz16 wrote

They make reference to a series of 9 studies that mention that the average pay for workers as a group goes down by 2% against the status quo because employers are less likely to give bigger raises to top performers, knowing they will have a fight on their hands with lower paid employees.

In the positive side, they mention the pay gap between men and women (negotiation is often cited as one of the reasons for the pay gap) gets smaller.

As someone who doesnt live in NY but in a business that is very prevalent in NY, the bands are very helpful in understanding what the top end of the pay range should be. I can make my own cost of living, etc. Adjustments.


shitposts_over_9000 t1_iw2hhjl wrote

I mean, it makes sense that it would. At least for some positions..

Almost no career salary positions have a set rate at the time of making the job posting. The hiring manager has a budget and a pay band.

So they either post a wide enough range that they aren't tipping their hand to the competition or they post a specific target and lose the upper 1/3 of their applicants.

If you go the first route then nothing much changes, if you go the second route then you end up hiring less which means you have more spend on retention, less of your staff looks for new jobs so they advance less in career pay over time.

There is also for larger corporations the effect of location choice. Most of the places passing laws like this are already very high cost of living regions. The additional compliance costs is one more factor to lead them to choose a low cost of living alternative.

We have posted a lot more positions in the Midwest recently because of things like this for example.