Much of my professional life has been spent self-employed. The idea of comparative salary was never a question or an issue, particularly as a trader. When someone is self-employed their salary is of course tied to the success of the business. Even so, many business owners will take a salary or draw of a steady amount and let the business build value over the years. I always thought that trading was a bit different, especially in my days as a market maker. Every day I made or lost money, and my ‘salary’ would ebb and flow with my trading success.
I’ve now spent the better part of the last dozen years or so in more traditional salaried roles. And that’s been great. The mortgage is covered, and there is much more predictability in life in general with this situation. The earliest part of my professional life was like this as well. Back then, early jobs out of school ‘never paid enough.’ But actually, they did. Again, rent, bills, and maybe a bit left over to go out on Saturday night in Hoboken or New York City. It was fun, and we always knew that some friends made more than others, though not always which one.
And that’s always made me wonder. To this day salary, or remuneration in general, is a pretty well guarded secret. I do it just like the next person. In fact, laws have popped up in some places that ban employers from asking prospective employees what their current salary is during job interviews and initial salary negotiations. When looking for a job, people will tell recruiters, “My previous salary is not important. I’d like to be paid fair value in whatever role I find myself next.”
That statement makes sense to me. When unions were more prevalent and powerful in this country, an entire class of people and the majority population in many cities all knew each other’s income. It was part of the group contract. This still exists on some level, but outside of the specific group of workers, the pay scale is often not easily discoverable. But why?
Competition is a good thing. I’m a trader at heart, and much of that is a competition of sorts. There are survivors (winners), and those who lose their money dedicated to the markets (losers). I can say that many of the people I’ve worked with in trading environments will wager on almost anything. So it’s a competitive universe. And these days, so is everything else.
The job market is extremely strong we’re told. The numbers demonstrate it. And outside of some pockets that should not be ignored (‘ceilings’, age, etc.) , it feels different than it did a few years ago. Yes, it’s all part of the cycles I like to discuss, but the majority of job postings will not list a salary. Why? Because as both sides are feeling happy when someone is getting a new job, that employment situation often starts out as a competition between employer and employee. How little can we pay a good prospective employee? How much can I get out of this company for my qualifications and abilities that I’ve been bragging to them about?
Maybe it’s just me, but if the warm and fuzzy “We’re on the same team” idea doesn’t seem to be present at the outset can it really get better from there? Or are we just sitting there pretending to love each other when in fact we’ve both got knives in our hands as we hug, ready to stab the other in the back. Now this part is inherent. If you don’t own the company, and even if you do, you’re first priority should be your family, not the company. But why all the secrecy? Even in sports we disclose information about salary structure, and sports are by definition usually a competition.
In much of Europe, salaries are public. If not by law, then by practice. Does this make for a less effective work force? That’s a pretty rhetorical question. The answer is obviously no. So why do we do this? Our society currently breeds more stress than it ever has. Just ask any high school student. My daughter is entering the “look at colleges” phase of early junior year. And it really doesn’t get any easier. I do think the overbearing stress used to start later in life though. And then comes the job market. As my good friend told his son upon starting his first job after college, “You don’t get ‘breaks’ anymore, you get a few weeks of ‘vacation.’” Bit of a rude awakening.
I’ve done salary negotiations. And follow up discussions with colleagues. I always just want to blurt it out. This is what I make. This was my raise. How about you? I don’t want to have this discussion in order to brag. Or in order to set myself up for a letdown. It’s actually more for ‘level-setting.’ If we’re all supposed to be on the same ‘team’ at work as we’re often told, then why not just be transparent about all of it. That is, after all, one of the new catch phrases.
Transparency. Ha! The most important part of working for all of us is getting paid, and in that respect there is little transparency in the United States. What we’ve got is a set up pitting ‘team members’ against each other. The ‘bonus pool’ is a great example. So is ‘Stack Ranking.’ Setting up your team members from top to bottom to determine who should get the large bonus and raise, and who languishes on the bottom. It’s easy to do when there is a veil over the whole thing. I won’t go into age discrimination, but the source of that is trying to decrease salary paid for a job done, and it’s so difficult to prove due to the secrecy companies have bred into the work force.
I say we follow the model that works elsewhere. Month long summer vacations worked elsewhere for a while too, I’ll save that for another chapter. For now, let’s practice transparency. Let’s take some of the ‘angst’ out of our professional lives. Let’s all find out what being on a team is about. Superstars can still make more. They do in sports. We all know what LeBron gets paid and he deserves it relative to the market. That’s ok. It will work throughout. I’ll start! My salary is $X, with a $Y bonus. See ya at the annual review.