Saturday, January 31, 2009

More On Lilly Ledbetter

RP Johnson writes:
Yes, I too thought it was not a public issue, but after taking a lot of flak from students, I switched. There are all kinds of disparities in information and bargaining power between employee and employer that make this increasingly an unlevel (is that a word?) playing field. And more and more, the public thinks it IS a public issue. Almost all levels of government maintain an open employee salary policy (in letter, but getting the information is often another story). And this is beginning to be applied to government contracts as well. And aren't we all in favor of "transparency" now? I'm afraid that boat has sailed; save your energy to overturn the ban on the import on the import Roquefort cheese.


Information disparities between potential employer and individual employees irrespective of gender, sexual orientation, race, etc, etc. If we assume that companies want to pay people the least amount of money possible to get them to agree to work there, then this isn't a gender issue. Furthermore, the key metric relevant to the employee, what the potential income for the applicant is elsewhere, would give the advantage to the employee. Not that the employer wouldn't have some idea, but one must assume that a diligent job applicant did their homework about what type of money is out there because it is very much in their interest to do so AND they know their skill levels and abilities far better than potential employers.

I totally disagree with your statement about the public thinking people's income is a public issue. Your example, the government, is an exception, not the rule for several reasons. First, government employees are paid with public funds. So, it makes sense that people would think their salaries were a public issue. Second, I would venture a guess that the vast majority of government workers are unionized, or if not unionized, get paid according to a fix scale that includes years of service and maybe some education. So, if somebody knows Bob's position is GS-9 or whatever, then he makes X. Third, politically elected and appointed officials, again, are paid by public funds and are public servants. Their salaries are usually public knowledge because the public has a right to know their salaries. We know, for example, President Obama makes $400k because the American people pay it.

When it comes to private industry, it is entirely different and I would argue that the American people recognize this fact. Few people are calling for every company to post everybody's salary on their webpage. More to the point, few people want their own salary published.

Now, that I think about it the biggest supporters of transparent salaries would be unions. If we make all salaries transparent, then there will be a move to equalize them. This will be driven mostly by the people in each company who upon seeing that they negotiated a bad deal demand as much money as the next guy or gal. Once everybody is more or less equalized, then nobody can go and get themselves a raise without everybody else going and immediately demanding the same thing. It's de facto collective bargaining. And since actual collective bargaining would achieve better results than de facto collective bargaining that workplace would eventually go union. So, I'm sure unions are all for this transparency in the private sector even though it is a huge violation of privacy.

Lastly, the excellence verus mediocrity argument comes in here. The current private sector arrangement -- individual and privately known renumeration -- has huge benefits. A good, productive worker can get paid more than lazy, incompetent workers, which is how it should be. So, I'm against transparency in this case and won't lay down that position regardless of what public opinion polls show.

PS. I hate roquefort, but I hate trade wars even more. So, yes. Overturn the ban!

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