> If compensation could be a direct output of an algorithm ... people could agree that this person is being paid fairly
Nope. Then they would start accusing the algorithm of being racist, sexist, otherist. They would cite institutional bias - bias so pervasive everyone has it even while no individuals do - and demand the algorithm be tweaked for their favored lobbyists.
The problem with pay transparency is not that it doesn't work; the problem is that the entire concept is immoral and evil. How much money you make is, properly, strictly a conversation between the parties in the transaction. No one else should care about your income; they should focus on maximizing their own value and find those for whom their services are the most valuable. The kinds of benefits valuable to an individual are unique: everyone has a different in background, life choices, purpose, and capability. There is no way to account for the fact that person A values work that involves travel, while person B is interested in work with a predictable schedule; and it is improper for person B to look at person A's compensation and make judgements about their own compensation, not because it is impossible to analyze all of the factors, but because person B must decide their own purpose and work toward it.
>The problem with pay transparency is not that it doesn't work; the problem is that the entire concept is immoral and evil. How much money you make is, properly, strictly a conversation between the parties in the transaction.
so how does this differ from any other good/transaction where we DO share prices? Why is it not immoral and evil that I can compare prices between amazon and walmart?
All the problem you describe can be resolved by employers either justifying themselves to their employees like adults, paying more, or the employees quitting. All of which are free market actions, the first of which having the added bonus of humanising the relationship. The only downside: you can't just treat your employees like "human resources" and get away with it as easily. You need to treat them as people
The difference is that every individual is unique in their ability to create value and their compensation preferences.
A product on Amazon has a market price - the thing being exchanged is an objective, metaphysical fact and people assign it a value. In areas of labor where the uniqueness of individuals is less of a factor, you will generally find that pay transparency is the norm. This is often unskilled/low-skilled labor in jobs that cannot offer meaningful non-pecuniary compensation.
But most people do not work in such jobs, and even in most manual labor jobs there is a strong element of applying your mind to do good work. As such, your purpose as an individual is much more important.
Pay transparency detrimental to you, as an individual. To live a happy life, you must figure out your own purpose and use your mind to achieve it. Happiness is not the result of income, nor is money required to be happy. Your happiness is a function of the achievement of the values you have defined for yourself. If you allow the income of others to influence your decision making, you are only hurting yourself. You should not leave a job that is satisfying in its essentials - that is, it fits with your purpose, you do meaningful work - merely because you discover someone else makes more; that would only hurt you. You don't know - can't know - their purpose, their value, their preferences, that lead to their income and work environment.
> Pay transparency detrimental to you, as an individual. To live a happy life, you must figure out your own purpose and use your mind to achieve it. Happiness is not the result of income, nor is money required to be happy. Your happiness is a function of the achievement of the values you have defined for yourself.
Perhaps someday I'll be less cynical, but I'll go ahead and say it: money might not be happiness, but it sure goes a long way to helping. If you need to work 80 hours / week just to keep food on the table and a roof over your head, leaving no time for you to express you own desires and wishes (and no money to do so), how are you supposed to be happy?
Money isn't directly happiness, but it helps in that you can acquire things that make you happy. For example, if my dream is to become a great guitar player, money towards instruments, lessons, etc. greatly helps. What if I want to see the world? That will cost money and time, which is often even more valuable than money.
> If you allow the income of others to influence your decision making, you are only hurting yourself.
If I find out that I'm getting screwed by my employer, and that I should ask for $20k/year more (which I can only know if I know the salary distribution for people of my trade, in my location), I fail to see how that can harm me. By the very definition, I'm being harmed every day I remain ignorant.
(Certainly, there are individuals who will chase the number, and let their hubris get ahead of them. They're not the people I think such initiatives are attempting to benefit. And I think the argument is that while such initiatives might not be perfect, they do more good than harm.)
>Pay transparency detrimental to you, as an individual. To live a happy life, you must figure out your own purpose and use your mind to achieve it. Happiness is not the result of income, nor is money required to be happy. Your happiness is a function of the achievement of the values you have defined for yourself. If you allow the income of others to influence your decision making, you are only hurting yourself. You should not leave a job that is satisfying in its essentials - that is, it fits with your purpose, you do meaningful work - merely because you discover someone else makes more; that would only hurt you. You don't know - can't know - their purpose, their value, their preferences, that lead to their income and work environment.
How about we let people judge that themselves? It's everyones job not to hurt themselves, so how about we make sure everyone has as much information as the most powerful in the room. Otherwise, let's make the top 1% "happier" and impose a 100% tax on all income more than 3 standard deviations from the median eh?
//edit: I saw in another comment, you talked about pay transparency not making the wages rise. It might now. But then it will cause people to quit jobs where they are not valued, increasing their happiness.
//edit2: also, you sidestepped the question. Humans are not as unique as random numbers, amazon goods are not all the same. If there are 5 brands of battery, we don't say it is immoral to share the prices and compare because "each brand carries its unique and special history". It's a battery, 5V, X watt, Y $. Likewise, if I get hired to design a product, they don't care about my extensive research in japanese mud ball culture. I'm a project designer, education X, working hours Y, pay Z, expected outcome for the company Z*(1+some positive number).
I've known only one other person to share that view; a toxic as fuck manager. What he (and I can be very confident you) are saying is "fuck you got mine". Income opens a lot of doors and letting a company (and those leading it) ride high off of your work just because the employee should be "living a happy life with what they have" is fucking bullshit.
If you're paying your employees porportional to the value they bring to the company (and both of you agree on this) there are no downsides to having transparent salaries. The system breaks down when the employees find out that the managers telling them "you don't need income to be happy" are making 5-10x everyone else while complaining that budgets are tight.
> How much money you make is, properly, strictly a conversation between the parties in the transaction.
If one party in a negotiation has extensive knowledge of the market and the other has a deliberately obfuscated view of the market, there is no way to have an equal negotiation. Which is what companies have relied on for years to systematically underpay certain classes of people.
This is true in every negotiation in every part of your life. What does equality even mean in such a context?
Epistemologically, there is no way for you to have enough context about either the other party or the other party's other counter-parties to inform your negotiation in a meaningful way. The only facts available to help you price your services are what others will pay for it, but this is not the same as pay transparency. Pay transparency is the price of other people's services, not yours, and it doesn't take into account your context.
Ethically, only you can know the value of the transaction - which is not the same as the amount of money exchanging hands. By that standard, employers are nuts to ever employ anyone, since employees don't pay their employers (except in North Korea and some unions). Only the employer can know the value they get out of you, in the totality of benefit your provide - though even then their information is very limited. And only you can know the value you get from your employer - again in the total benefit they provide both in cash and non-pecuniary factors.
To put it another way, you wouldn't ask for the same income from, say, Pornhub, Phillip-Morris, Google, and Watsi. So why do you think those companies should treat their employees like an undifferentiated mass of goop?
>To put it another way, you wouldn't ask for the same income from, say, Pornhub, Phillip-Morris, Google, and Watsi
I don't think this is common. I would try to get the same income from all of them -- the absolute maximum they are willing to pay me. I'm certain most of the people I've talked to professionally about compensation would feel the same way.
I’d be surprised to find someone who doesn’t adjust compensation requirements based on the full context of the opportunity.
If a person starts a company and foregoes the full salary they could otherwise earn, they are making this kind of choice.
If a person is looking at two otherwise equal offers for similar work at Pornhub or Google, it is hard to imagine taking the pornhub offer without a significant risk premium. You couldn’t get me to work at such company for any amount of compensation.
Just about everyone I’ve met will discount the products and services for things they believe are a good cause. I once worked at a nonprofit focused on low income kids, and experienced professionals (lawyers, engineers, accountants, others) would contribute significant time at steeply discounted rates or for free.
The value of a compensation package is unique to the individual. There is no way to compare two people in the full context of their individual desire for straight salary, risk in the form of stock or options, scope of influence, prestige of the firm, rarity of type of work, work hours, flexibility of hours, retirement and health benefits, culture, geography, and on and on and on.
I agree with your first paragraph, but I'm not sure about the second one.
My instincts tell me that labor is something with a price like anything else, and (aside from claims of unfairness) more transparency is better. The end result over time would presumably be the price of labor (salaries) would more closely resemble actual market value.
But I also consider myself to be a high performer, and the last thing I want when negotiating a raise is my boss to have to think about how the rest of the team will feel about it. I want him to care only about whether or not my services are worth it for the price I'm asking. And that just won't happen if it's all transparent.
I think people believe that pay transparency will result in increasing wages.
This has never happened in economic history. You cannot make two people equal by raising the low producer, you can only cut down the high producer.
When train transport prices were regulated because local trains were more expensive than long haul trains, the result was the raising of long haul prices.
Ultimately, I feel your argument boils down to "the context of my peers in my profession is not entirely identical to my own, therefore I can't use any information (such as their salary) to inform my own context". This seems obviously false, so surely I must be misunderstanding?
Nope. Then they would start accusing the algorithm of being racist, sexist, otherist. They would cite institutional bias - bias so pervasive everyone has it even while no individuals do - and demand the algorithm be tweaked for their favored lobbyists.
The problem with pay transparency is not that it doesn't work; the problem is that the entire concept is immoral and evil. How much money you make is, properly, strictly a conversation between the parties in the transaction. No one else should care about your income; they should focus on maximizing their own value and find those for whom their services are the most valuable. The kinds of benefits valuable to an individual are unique: everyone has a different in background, life choices, purpose, and capability. There is no way to account for the fact that person A values work that involves travel, while person B is interested in work with a predictable schedule; and it is improper for person B to look at person A's compensation and make judgements about their own compensation, not because it is impossible to analyze all of the factors, but because person B must decide their own purpose and work toward it.
This is simply another manifestation of the inequality debate. Equal is Unfair is a great book that unpacks the issues of inequality: https://www.amazon.com/Equal-Unfair-Americas-Misguided-Inequ...