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Business English

Why salaries are the final taboo

von Lucy Kellaway

How polite social convention dictates that it's wrong to enquire about earnings. But is there a case for salary scales being more transparent?

"I hope you don't mind me asking", a journalist acquaintance said to me the other day, "but how much do you earn at the Financial Times?"

I did mind her asking: I minded very much indeed. This was irrational as her question made perfect sense - she does a job roughly comparable to mine on another paper, was renegotiating her salary and wanted to conduct a little market research.

Yet I minded more than if she had asked me how many people I had had sex with, or how much my house cost, or how much I weighed, or what I did with unwanted hair. All these questions used to be considered insufferably rude, but now - under the right conditions - can be borderline acceptable. But to ask someone their salary is to break the final taboo - at least in polite society in Britain and America. The only other person to have asked me this in the past few years was my son, who was then about six. I replied crisply "I get paid enough", a considerably less full answer than I had given to that other awkward question: how are babies made?

 "How much do you earn?", the burning question in many workplaces

On the very same day as I received her indelicate enquiry I got an e-mail from a reader with an even more alarming suggestion - that I post my salary on the internet, and join a global movement to end salary secrecy. Last June www.glassdoor.com was set up, and has since collected salaries from people working for 11,000 companies in 100 countries.

I checked the website at once, but was a little disappointed as the salaries are anonymous and the pay seemed puzzlingly low. Assistant vice-presidents at JPMorgan can earn as little as $62,000, which either means that the title is now so devalued as to include loo cleaners - or that they are only declaring part of the total.

Still, the movement is young and growing and full of idealists who believe working life would be a lot better if people like me stopped being so uptight and if companies were open about who earned what.

Transparency, consistency and fairness

They argue that for the labour market to work efficiently everyone needs to know what everyone else gets. At the moment managers control the information, and therefore the power. The manager decides how much to pay, basing his decision on whatever takes his fancy. Pay does not reflect merit and those who shout loudest (usually men) get paid most. Transparency would not only make things fairer, it would also mean that the gap between the highest and lowest paid would shrink, as those who were paid much more than others would have to prove they deserved it. Managers would be ashamed to pay themselves conspicuously more than their due.

Finally, it would mean an end to the current madness and paranoia that has everyone secretly suspecting each other of earning too much. Studies have shown that we all tend to overestimate how much our colleagues are making, so knowing the truth would be a relief. Motivation would improve too, because if the hardest workers got the big salaries, the others would strive harder to be more like them.

This open world sounds nice, but is an utter fantasy. The biggest fallacy is that transparency would put restraint on pay at the top. See what has happened to chief executive pay in the US in the 15 years since it was made public. Then CEOs earned about 70 times the average worker's pay. Now they earn 300 times as much, as they have all tried to leapfrog over each other to the front of the line.

Transparency might make things fairer if there were a "right" amount that everyone should earn, but this isn't the case. Pay depends on all sorts of subjective things including the negotiating position of the employee. If salaries were open, managers would find an angry queue outside their door and that trying to answer so many unanswerable questions would leave them no time to get any work done.

Remuneration raises questions of self-worth

Secrecy not only suits managers - it suits workers too. The reason we are so squeamish about discussing our salaries is not because we think that discussing money is vulgar or because we like to pretend we are equal. The rich delight in flaunting their spending power, but are reticent about their earning power. I suspect this is because salary is connected with worth, and this is an uncomfortable idea all around. To declare a low salary is shameful as it suggests you aren't worth a lot. To declare a high one is also shameful as it suggests you are pulling a fast one and you can't possibly be worth so much.

But there is a better argument why it would not be in our interests to know what our colleagues get paid. It is about relativity: how we feel about our pay depends almost entirely on how much everyone else is getting. This is summed up in the famous New Yorker cartoon: "OK, if you can't see your way to giving me a pay raise, how about giving Parkerson a pay cut?"

I know someone who found she could access all her colleagues' salaries on her computer. She checked one or two names, found that someone useless was paid more than her, felt sick, and sensibly deleted the whole list.

I also felt queasy at the end of the conversation with the columnist. I wanted to say "mind your own business" but feared that would sound intolerably priggish. So I told her my salary, feeling sheepish about how much it is.

"Oh," she said airily, "That sounds about right" and then slipped in the fact that hers was GBP10,000 higher. Result: I still feel sheepish but now I feel hard done by, too. Ignorance might not be bliss, but it has much to be said for it.