Employers use your personal data to figure out the lowest salary you'll accept
marketwatch.com276 points by thisislife2 12 hours ago
276 points by thisislife2 12 hours ago
Many years ago, back when companies could ask for your previous compensation [0], a hiring manager once said to me "don't ever lie about your past compensation".
I wasn't sure how they could figure this out at the time until someone later pointed out that many corporations do a credit history check on you as part of the background check. This gives them access to past compensation.
The information asymmetry here is, as with much of hiring, pretty bonkers when they had both the current and past comp history during negotiations when you have just yours. You might also have the comp history of your friends too (if you share) but that's still tiny compared to the corporations.
0 - this was in NYC where it's now no longer allowed.
I don’t recall ever seeing a salary in my credit report. Certainly when applying for credit cards you are asked but generally they have you include all sources of income including bonus, passive income, and alimony.
There are data sources for this info but I don’t think it’s technically a credit report.
One (more) thing to opt out of:
Freeze Your Data - The Work Number https://employees.theworknumber.com/employee-data-freeze
As I understand it, payroll whores your salary out to Equifax*, who then pimps it to others
* Yeah, that one: https://en.wikipedia.org/wiki/2017_Equifax_data_breach
I worked for Equifax many moons ago. They had a problem with people taking jobs there that no one else wanted, solely to gain access to their systems and reset their own credit scores. And, for some reason, they couldn’t roll it back once found out. Great company.
I love that it's a freeze not a purge. And that it's opt-out to have surreptitiously collected data being used against your livelihood.
The data breach should have been reason enough to ban Equifax and force them to destroy their data. But that can only be done when the government works for the people, instead of money.
No they sell it directly: https://theworknumber.com/solutions/industries/pre-employmen...
The Work Number is in fact Equifax.
I hate that I have to opt out of this stuff that I never signed up for and never would have. I filed the request to freeze, and see that it will require me uploading many more pieces of data to prove identity and address. Disgusting.
If the credit bureaus don't have a complete profile when you start, they will after provide the missing pieces.
I really wouldn't be surprised if that is indeed the goal defined for that workflow's design.
As a European, it is wild to see a private company warning that disallowing them the ability to process your personal data might hinder your ability to access social services.
Have a look at german Schufa company. I was there pre RGPD, so maybe things have changed.
Thank you for the link. I tried to opt out. They sent me this email:
Equifax Workforce Solutions (provider of The Work Number) has received your employee request communication, but additional information described below is required to fulfill this request.
We will be following up with a secure email to obtain the below requested documents:
Proof of Identity:
Provide a copy of one of the following (must include current/legal name):
- Driver's License (must be current) - Paystubs (must be dated within 60 days) - State or Government Identification Card (must be current) - Social Security Card - Military Identification Card - Passport (must be issued from U.S.A. and be current) - W-2 or 1099 Form (most current year) - Birth Certificate
Proof of Address:
If you are requesting an Employment Data Report (EDR) or selected ‘Mail’ as your preferred method of contact,provide a copy of one of the following (must include current mailing address and be issued within the past 60 days)
- Driver's License (must be current) - Paystub - W-2 or 1099 Form (most current year) - Utility Bill (phone, water, gas, electric, trash or sewer, etc.) - Housing Rental Agreement or Mortgage document - your name must be listed on the document
For Identity Theft Block Requests, along with Proof of Identity and Proof of Address (if applicable), please provide your identity theft report and designation of items to be blocked:
- Identity Theft Report (police report, FTC Identity Theft Report, Police report, or United States Postal Inspection Service)
For Human Trafficking Victim Block Requests ONLY, along with Proof of Identity and Proof of Address (if applicable), please provide victim determination documentation (as described below), and designation of items to be blocked.
Victim Determination Documentation:
Provide a copy of one of the following victim determination documentation confirming that you were a victim of human trafficking, such as:
- Determinations made by federal, state, tribal, or local governments, government agencies, or law enforcement - Determinations by non-governmental entities or task forces authorized by a governmental agency to make such a determination - Self-attestation signed or certified by such governmental agency or non-governmental entity - Determination by court in a case where a central issue is whether you are a victim of human trafficking. (Court documents can be made up of several documents from the court case that together show that the court accepted as true or finding no genuine dispute that you were a victim of human trafficking.)
We will be following up with a secure email to obtain the requested documents.
Data Investigation Team Equifax Workforce Solutions
Obviously they have to be careful. What if they didn't check all this and someone went and tried to opt out on your behalf? That would be an incredible invasion of your privacy!
> incredible invasion of your privacy!
Obviously. On the other hand, your e ployer sharing your personal data against your knowledge or your will isn’t an incredible invasion of your privacy. Everything is fine citizen, move along and quit asking questions or thinking.
They didn’t ask for any of that when harvesting personal financial data, how lovely
> We will be following up with a secure email to obtain the requested documents.
"secure email". I expect these data will be turn up somewhere in a few years, maybe from a data breach or some other shenigans.
The thing about this is that there still exist clauses in employment contracts requiring pay secrecy by employees.
So, theoretically some employees have a requirement upon them to fill this in.
Those requirements are all facially illegal and unenforceable though. In the US you have federally protected labor rights that you cannot contract out of. The right to discuss pay and working conditions with other workers and the public is one of them.
Yes, imagine being in breach of contract if you apply for a mortgage, and they ask "What do you do" and "How much do you make a year" and "Can we see a pay stub (or income tax info)".
Such clauses are inane beyond the legality of it.
I'm filling out the form there. I genuinely don't know why I would ever generate a salary key so I can let someone know how much money I made.
Also, to prevent them from sharing the information, you need to give them even more information. Disgusting that this is allowed.
> I genuinely don't know why I would ever generate a salary key so I can let someone know how much money I made.
I value my financial privacy as well, but when I go to someone to ask to borrow a million dollars to buy a house, it seems reasonable that I’m going to have to give them some information pertinent to assuring them I’m likely to and capable of paying them back.
American Express just canceled my wife’s card after 15 years because she didn’t fill in her salary data.
Hmmm, so if it's a low value and they leak it to employers, that could screw you in compensation for a future job... And if it's a high value, the credit card company might argue you were lying to them for a higher credit limit.
There was a story recently about how large landlords use salary data to raise rents. If they see you got a raise, they’ll increase your rent accordingly. And pretty soon, retailers will do the same. Your personalized price for a gallon of milk at Walmart will reflect your annual raise. I love living in the future!
I wonder if the winning game becomes your own boss and tiny companies.
I want to do the jump, but lack of courage, good ideas, sales skills and a very good salary still holding me back (open for suggestions). But if the very good salary would go away, the scales tip instantly.
Probably not the answer you want to here but I'll share my perspective. Three years ago my wife and I sat down and optimized our finances so I could soft-retire and focus on a few of my life goals while simultaneously working on ways to generate income without the stress of being in the employ of others. It was tough work which mainly involved paying down a lot of debt so we can live more lean. We did a lot of optimization and of course some compromise and lifestyle changes. Fortunately, my wife earns enough for us to still live comfortably on a single income.
Now I am her part-time personal assistant which has taken a big load off her plate and reduced her stress significantly. A lot of this work is clerical: writing emails, grants, curriculum/lessons (she's a teacher), ordering supplies, working with spreadsheets, doing misc. graphic design and other office work. I also take care of the household, finances (mostly) and pets. In my spare time I pursue my lifelong passions (writing, game design, and programming), but with each of these my focus has been channeling those passions into generating income. This is not a requirement of my soft-retirement, but rather a choice I made to create balance between us.
Overall, we are much happier and fulfilled and have managed to carve out a life where we work meaner and leaner without huge sacrifices. In reality, it feels like we are financially better off than we were before.
Whenever I read something like this I have to ask if kids are in the picture? Or maybe they've already moved away.
I'd like to do something like this but everything that has to do with kids is both too expensive and too unpredictable for lean living to be an achievable goal.
It’s a very common arrangement, both with and without kids, once you look past the gender of particular participants.
Wonder what you'd do with your passion in a just world where everything of creativity (okay almost) would not need to be turned into a income.
I feel this fucking form of slavery as well hard.
How sorry can life be?
We live in a world where someone has to clean the sewers, unblock toilets, maintain electricity lines in snow storms, weld deep underwater, clean, wipe the butts of old people, and 10,000 other thankless, tiring, and dangerous jobs which no one in their right mind would ever do because they found it fun and interesting. Until we have very highly capable robots to do these jobs, we need some way to incentivise doing work which few others want to do, or are capable of doing. Right now we use money as the incentive. On top of that, there are things people do which bring a lot of value to others. They invent new things, for example, and sell them. Others buy them. We also want to incentivise that, even though it's not easy, and not everyone is capable of doing that.
I do think AI and robotics will usher in a much more abundant world in the future. It's unclear how we navigate that - economically, politically, socially.
Alternatively, you live in a society that has conditioned you to devalue manual labour and erronously assume that no one exists who actually enjoys physical interaction with the world.
As you're likely to be in the US, you could always watch the Mike Rowe Dirty Jobs back catalog.
That's true for some jobs, but I'd be very surprised if anyone enjoys cleaning shit, for example
It can be enjoyable in the context of failure analysis: troubleshooting, finding root causes, documenting other people's fuckups then tracing through the assignment logs on who interacted with the server last.
Leaving aside the scene from Life of Brian, I have no issue cleaning shit - I've raised children, they poop, I have livestock, they shit, kids will happily frisbee cow pats, raking out sheep shit from under shearing sheds is a job that I've done, as have many .. you end up with a couple of tonne stacked high on a double axle trailer that's great for the garden.
For what it's worth, I don't mind a bit of higher dimensional data reduction when processing raw multi channel data, or geophysical world modelling (magnetic fields, gravity, radiometrics, etc).
I'm heading to the Graeberian world of bullshit jobs which ironically tends to head towards the direction of meaning.
I'm pro "everyone cleans their own shit" but the meaning of a garbage truck driver could immense compared to a honest hedge fund manager or a VC Patagonia vest.
Cleaning time of our own shit hopefully won't be a full time job. We'll just figure out the ones creating too much shit and educate them as a society :D
Jason Pargin has a great viewpoint on this: https://www.facebook.com/reel/1179783609733134
Apologies for a fb reel, but its the easiest way to share.
How many acres are you personally willing to farm to let others eat without payment “in a just world”?
How many days per month are you willing to pick up trash, sit in a fire station, or teach elementary school?
It’s not slavery (if you) that other people won’t give you their output without payment. In fact, it’s closer to being slavery in the other direction if they have to work and you get the benefits of their output without payment…
> In fact, it’s closer to being slavery in the other direction if they have to work and you get the benefits of their output without payment…
This sounds a lot like you've been conditioned to think there can't be an alternative to the current system. Even if I don't know what a better system would be, I can absolutely imagine that there are better options than what we've got. We should all want that and push for that and ask ourselves what it might be until we find it.
I can tell you this much about what I think would be part of that better system: we wouldn't leave people to sleep on the streets and we wouldn't have for-profit healthcare.
Don't let perfect be the enemy of good.
Assuming that a farm would be owned by one person has already put a very tiny box around your world view
> In reality, it feels like we are financially better off than we were before.
Are you financially better off or does it only feel that way?
If you were actually better off, why mention feelings?
They may have less money but also more time for things they care about, and less burden and stress in daily life.
So it is going to be a feeling. Is their smaller income going much farther now in how it benefits them, if so they feel better-off
I think the heart of what they're getting at is that while on paper they are bringing in less income, they have gotten off the hedonistic treadmill, and as a result, quality of life per dollar has increased dramatically. They are less stressed about finances than they were prior, even though their income is lower.
Sentiment is an important barometer in this case.
On some level the feeling matters more than the reality, past a certain survival threshold.
That was always the "winning game". Only problem is that's a lot of work. The more things change, the more they stay the same; if you want more money, work harder. People who don't want to work harder complain that other people make more money because they either don't understand or are in denial about the amount of work the people they envy put in.
Yes there are exceptions. No pointing out exceptions won't help you, though it might make you temporarily feel better about yourself.
The elephant in the room is health insurance. We have a system where even if you have a fairly good income, buying insurance as an individual (or as a small company that isn't buying in a volume high enough for insurance companies to want to give you a discount) means that you'll in all likelihood be paying a lot more for a lot less coverage. The ACA attempted to solve this by having insurance companies offer plans on "public exchanges" by state and then subsidizing the costs, but because most people making good money get insurance through a job with benefits rather than buying it directly, in practice there aren't really any options on the public exchanges calibrated for people with high incomes. (Plus, if you live in a red state, they've likely refused to take the subsidies, which means either the prices are higher or the plans are even more meager based on what the insurance companies expect people without benefits through employment to be able to afford, or both).
> Plus, if you live in a red state, they've likely refused to take the subsidies
No. Individual states can refuse Medicaid expansion, but that does not have any bearing on the health insurance marketplace / premium tax credit ("subsidies"), which states cannot opt out of.
That's no longer true. You can have ICRA etc plans, for the tax benefits.
The truth of the matter is that employers pay a humongous share of the health insurance bill, and if you shop directly, you will pay that 100% on your own.
You do have to put in a little more effort, but as an employer you can build a hybrid plan and contract with certain networks, and lower your bill tremendously.
They're still maybe right. In CA, it's pretty common for the best plan you can buy as an individual to be half as good as whatever your employer offers and to cost twice as much as the combined employee+employer contribution.
How does ICHRA fix that? What's this "contracting with certain networks" you're referring to?
Define work harder. I think it is worth defining as it is ambiguous and could mean one or more of:
1. Longer hours at work
2. Same hours working but adding time learning
3. Ruthless optimization of time at work.
4. Working smarter (which probably means learning new skills).
5. Doing stuff that makes you uncomfortable. E.g. honest feedback, applying 2 levels above current, hand up to lead messy project etc.
Write down 10 of your TODOs that generate income. As per natural law, it's likely that 1-2 of those TODOs will have 80% of the impact while the other 8-9 will have almost no impact. Now here comes the interesting part. You propably already know the 8-9 tasks that have almost no impact, but as per another law, those are also the easiest tasks (checking mails and such). On that list the TODO that feels like the biggest hassle and you least want to do will likely have the biggest impact. Sit down and just do it. Now, without delay. That already makes you more productive than 98% of your colleagues.
You can be the hardest working burger flipper at McDonald's, but you are not going to be as financially secure as someone coasting on a FAANG salary.
A burger flipper cannot flip 20x the burgers. There isn't really any way to produce more output flipping burgers. Even if you could, if there isn't a queue of people waiting to collect their orders, there isn't any point in producing more blindly.
The person responsible for designing the process that thousands of franchises use probably does make a lot of money.
Work harder on the right things. Digging holes in your backyard with a shovel is hard work but nobody is going to pay you for it.
I don't pay my employees based on inputs like how hard they work, I pay based on outputs.
Any other system of incentives would be insane.
Things are different if you're e.g. a lawyer and have billable hours.
I get this, but also genuinely interested to know how to measure outputs. For me it's almost impossible to get it objectively right.
Maybe this doesn't apply to your case, but how would you measure outputs of say product development, or any data related project. Lot's of things don't have a good measure of output before the thing is done. Maybe your product / analysis improves profitability by 10x or maybe it was a flop and lost money.
Tangential, but I'm also seeing the quality of measures going down, with AI it seems that the number of [emails|code|analysis] produced is again a good measure.
> I get this, but also genuinely interested to know how to measure outputs.
Measuring outputs or inputs (hard work) is always hard. Did someone get the thing that was asked done both quickly and correctly? Do they do this consistently?
I also find inputs harder to measure because someone could be in the office 12 hours/day, but on Facebook the whole time. They could also just spin their wheels doing 'fake' work.
I spend some time going through what programmers wrote over the past years and many of them were rewarded for getting things done quickly with no complaints.. The more diligent ones probably didn't last since they got things done correctly which takes a lot more time and thought.
> I don't pay my employees based on inputs like how hard they work, I pay based on outputs.
It's crazy how many times I have to explain this to people, and it's usually when they ask me for a raise.
> People who don't want to work harder complain that other people make more money because they either don't understand or are in denial about the amount of work the people they envy put in.
I assure you, I have never in my life worked 20 times harder than someone making minimum wage.
In software engineering it isn’t necessarily the winning game. FAANG salary vs self employed isn’t that a case of “work hard and it’ll come”.
I've considered it myself; I don't want to make a business doing contract work again, because I did not enjoy that.
If I were to start my own business it would have to be a product. I have plenty of interesting projects that I work on in my free time, but I'm not sure any of them are monetizable, or at least not monetizable enough for a venture capitalist to throw money at me (especially since most of them do not involve AI). I could probably think of something that could be monetizable if I really tried but if I don't actually enjoy the work I'm doing on the side for fun then I'm probably not going to do a particularly good job on it.
Though even if I did have some brilliant project that I could sell, I have no idea how to go about finding VC investors. And even if I knew how to find these investors, I think I would ultimately be too afraid to actually commit to it.
Increasingly it's seeming that I will probably not be worth billions of dollars in my lifetime, for no other reasons than I'm too much of a coward and I'm too discriminating with what I actually work on. Sometimes it depresses me to think about it, but hard to feel too sad for myself when I still have a high salary job that involves me staring at a computer screen all day.
Forgive me for saying this, but I think you may be drinking too much of the kool-aid.
If some of your projects are monetizable, couldn't you move forward without VC help?
Perhaps related, why do you need to be worth billions of dollars? I feel your visions for what you want your future self to be are highly unrealistic and you're probably setting yourself up for a lot of disappointment and unhappiness.
Sorry for the bluntness, but I think one could be happy on a lot less.
I was being a bit joking and hyperbolic about the billion dollars, though obviously that wasn’t communicated clearly. I don’t really need a billion dollars.
I don’t think anything I have right now is very monetizable; most of the fun stuff I work on now ends up being formal methods stuff, which is cool but hard to make any money with.
I guess what I was saying is that I think I am ultimately think I am too cowardly to just go for it and make my own company. I don’t think I am capable of purposely avoiding income for N months for a project to pick up.
> Increasingly it's seeming that I will probably not be worth billions of dollars in my lifetime, for no other reasons than I'm too much of a coward and I'm too discriminating with what I actually work on
I can't tell if you're wildly underestimating how many circumstances are outside of your control or just have an extremely high opinion of how much of an outlier you are (or maybe this isn't meant seriously and just went over my head), but I think that there are vanishingly few people (if any) in the world whose only impediments to a high likelihood of becoming a billionaire are self-imposed. I don't think that even extremely smart and charismatic people are particularly likely to do that. For every one that reaches that level of wealth, there are far more who try and fail, and it's not always because they weren't willing to work on shady things or weren't smart enough; some factors are just beyond the ability of an individual human to overcome, and you might just be lucky or unlucky.
Clearly poor communication on my end; I was joking about the billion dollars. My bad.
I was just saying that I am too much of a coward to actually even attempt to make my own business.
Wait til you find out what customers do to figure out the lowest. There’s a little more accountability.
I wonder if the solution is democracy.
Most countries used to be hereditary dictatorships ("kingdoms") just a few hundred years ago, then people picked up rifles (and guillotines) and changed that. Now, since we already have some semblance of democracy at the top layer of power, maybe we could revolutionize the lower layers without the risks inherent to picking up rifles.
I don't see why we should be controlled by sociopaths[0] 8 hours a day, quite often against our interests.
---
The other part of the solution is automatically and continuously redistributing ownership of the company according to hours worked and skill level. This of course has to be required by law, otherwise those sociopaths at the top have so much leverage that if you ask for anything other than money during negotiation, you'll get laughed out of the room.
[0]: https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-...
Here in Japan they ask you your current salary (it's even mandatory by most companies), so it's easier here :) ... :(
And if you lie?
It works the same way here in the UK. Some companies ask your previous salary, and sometimes check your references, and sometimes your previous employer will disclose what your salary was. If it turns out you lied nothing bad happens, but you've just given your new employer a reason to dismiss you.
The main problem with the UK system is that it means that if you were underpaid before you're likely to continue to be underpaid in your next role (if you accept a low salary again). For that reason when I'm hiring I've stopped asking for someone's previous salary, and just ask them what they want instead. If it's in the right ballpark everyone's happy. If they lowball themselves I ask why and usually get "That's x% more than I'm on now.", which leads to a conversation about how they're underpaid and should be asking for more. If they ask for too much then I just don't hire them because I can't afford them.
There's a new law coming in where companies have to disclose salary bands now, which at least means people will understand the bottom end. That's going to make the salary negotiation part of hiring a lot easier.
> and sometimes your previous employer will disclose what your salary was
How is this even legal?
I suspect it's not, but it's also hard to prove something has occurred in private communication between third parties.
What a hassle!
Here in Sweden, your tax filings are public information; companies can just ask the government what you made last year. I have no idea if they actually do, though, and the data will be somewhat obfuscated if you have extra income on the side.
But is the income data is also available to individuals? If I can find out the income of another professional in a similar role that becomes the anchoring point. Otherwise the company will just offer {prev_year_income} + peanuts.
It is. You can basically check out the company linkedin, people in similar roles/YoE, then google their name to find out their birthday, then just call our IRS. Ask for declared income for year X, X-1 etc. This gives you an anchor as parent said. It's a way to change the power imbalance when negotiating. I know friends that do this when applying for jobs. There's a law coming that makes this basically worthless, since the salary range for the role must be declared openly with the ad. And that btw is one of the first questions I ask when talking to hiring manager or HR, to find out if it's a good fit.
I earn like €100k per year. Not a huge salary, but definitely above average. My family lives in Eastern Europe. Once I was hanging out with my cousin and his friends, all of these people had minimum-wage jobs. Not really my type of social circle, but I have no issues being cool for an evening. Then suddenly my cousin drinks one too many and starts blabbering about how "fucking rich" I am and all eyes turn to me because guess what the whole group smelled an opportunity. Never spent time with them again.
I assume such situations occur often in Sweden where it's really awkward if you want to hang out with a crowd from lower social class because they know your earnings.
Sweden is one of the countries with the lowest salary inequality in the world. In Eastern Europe 100k a year puts you at what 10x minimum wage? I think that would be considered a pretty high salary in France or Spain as well. I think your friend reaction is warranted, but I don't think it would happen often in Sweden...
Even in Germany 100k€ a year puts you in the top 2% (maybe even top1%) for single earners. And in the top 5% for a couple.
So OP is - for eastern European standards (depending on which country specifically) very well off. Talking as if 100k€ was nothing special is actually quite telling imho.
I've never had a problem like that. People don't bother looking it up -- probably because your socioeconomic class is apparent anyway from e.g. the area you live in. AFAIK, the only ones who have ever looked mine up are banks, when I was applying for mortgages.
> I assume such situations occur often in Sweden where it's really awkward if you want to hang out with a crowd from lower social class because they know your earnings.
You don't have to be in Sweden to have a pretty good idea within a few minutes of talking to someone, of what the ballpark for their earnings is.
Your social class is written all over your face, your clothes, your manners, your manner of speaking, the company you keep, the hobbies you have, where and how you spend your time...
I am technically in the upper class based on income and place of residence. I drive an 11 year old vehicle, wear inexpensive clothes (often plain tees), eat out infrequently, etc. I unintentionally spend more in areas that tend not to be obvious to non-friends. I'd be upset if people could easily lookup my income.
> Your social class is written all over your face, your clothes, your manners, your manner of speaking, the company you keep, the hobbies you have, where and how you spend your time...
This is not true for lots of software developers who grew up poor but got rich. I wear shitty clothes, live in the ghetto, my hobbies are video games, cycling, and porn, and when speaking I code-switch easily. If anything, it's the other way around - when I'm around city folks with their mannerisms and discussions about veganism I clearly see I don't fit and I come across as a neanderthal despite my income being around top 10%.
I grew up with a single dad that while having a good salary also had the mortgage to pay. So I was middle class, but never had the niceties my peers had.
I moved out before finishing school (I did finish living on my own) and working 40 - 60 hours next to school - while being officially below the poverty line. This went on during most of my university days.
When starting a job I had to live frugally, because it had a really shitty salary.
Nowadays I am in the top 5 - 2 percent of earners (depending on how you calculate/count.
I still wear regular clothes most of the time. I nearly never eat out. I spend on things people do not really see.
So yeah - I can relate. Especially when being socially thrown together with the kind of people you describe. 100% second this.
Once I was invited to some gathering. Right at the beginning they asked me if I'm from $ENVIRONEMTNAL_ORGANIZATION. I thought they were just fucking with me so I replied laughing/ironically "Do I look like I'm from $ENVIRONEMNTAL_ORGANIZATION?".
Turns out, they were dead serious. For the rest of the evening we had some boring-ass shitty activities and insufferable conversations. 0/10 I checked out early and never showed up again.
Most software related jobs on their own aren't seen as a 'high class' professions. It's a job which got extremely lucrative recently. It's similar to someone who made lots of money from the gold rush. The fact you were poor growing up usually means you'll never be seen as high class at older age either (part of the reason why some of these tech billionaires seem frustrated?)
It's not always too difficult to tell if someone is a software engineer from their behaviour and interests alone.
I'm not seeing how this matters, they were already doing that - the market is a big auction to work out the overlap between lowest salary employees will work for and the highest salary employers will offer. In that process employees also use data to figure out the highest salary that will be offered. The thing forcing employers to pay the salary they do is that if they offer less someone else will gazump them for the employee's time. It has nothing to do with the circumstances of the employees lifestyle. The lifestyle adjusts to the salary.
> the overlap between lowest salary employees will work for and the highest salary employers will offer
There is still an element of unknown because both parties do not know each others numbers, which allows employees to still negotiate. You are now talking about information asymmetry where the party with the information will now have all the bargaining power.
When I went from working a $150K job to getting offers from Meta at $300K, the initial number they offered was $250K, and we worked upwards. I absolutely would’ve taken the job even if they offered $200K and not negotiated. But they did, based on information asymmetry. Now imagine a world where meta knows exactly how much I make and all the other information about me. I’d probably get a minor bump over my previous salary.
Edit: I ended up taking a different offer. I don’t work for and have never worked for Meta.
You might want to rethink your example if the counterparty offers you 50% more than you wanted then you reject the deal; it makes adding the framing a bit pointless because it is clear you weren't ever going to accept the job for $200k.
And you're underestimating how much of an impact the broader market is having on Meta's thinking in this scenario. If your silver tongue or secret number was a factor here then everyone would end up being overpaid because they wouldn't reveal that they were happy to work for a reasonable amount. It doesn't matter how much or little Meta knows, they're only going to offer $300k if they have a reasonable belief that you can find a job for $300k somewhere else; informed by a pretty detailed analysis of the employment market. And in fact that appears to be exactly what happened in your story. Nothing about that dynamic has anything to do with your salary history or spending habits and them getting better information on those things doesn't change your negotiating position. Since a key factor is the future, even if they know you'd say yes to $200k, they'd still be best served offering you more money. I've had that happen to me 2 or 3 times because I'm a sloppy negotiator and don't try very hard to optimise salary.
> You might want to rethink your example if the counterparty offers you 50% more than you wanted then you reject the deal
I rejected the deal because I got even more elsewhere. My framing still stands. In a case when only one employer has the information, sure they’re better served by offering me more money. But in an environment where all of them have the information, this no longer is a problem. At a system level, this is a problem for employees.
But if Meta wanted to hire you and had perfect information, it sounds like they'd discover they needed to offer you salaries in the $350-400k range? That sounds like it might be good for you.
The story you seem to have told is they just wasted time low-balling you because they didn't have enough information to offer a competitive salary. You weren't ever going to settle for $250k, they didn't have enough leverage and they lacked the information to identify that. I'm not sure how you're seeing this story as one where more information to Meta leads to them offering you a lower salary. It seems like you'd have rejected them regardless unless they went higher.
All the employers knowing that you'd have "taken the job even if they offered $200K" seems to be completely useless to them. They're locked in an auction and the market price for your time is nowhere near $200k.
> they'd discover they needed to offer you salaries in the $350-400k range?
No, such a discovery wouldn't be possible, because nobody would pay that amount to someone who was willing to accept $200K.
> They're locked in an auction and the market price for your time is nowhere near $200k.
There is no magical market price that exists outside the market dynamics. When bidders know that one's current salary is $150K, their willingness to offer higher salaries will diminish accordingly.
>Now imagine a world where meta knows exactly how much I make and all the other information about me. I’d probably get a minor bump over my previous salary.
Not necessarily. People don't change companies for just any value greater than current TC. There is a big cost to switching companies -- it's going to shake up your lifestyle, you might lose some relationships, reset your company-internal network and reputation, reset technical and organization context etc. Possibly even moving your home (even if a new job is in the same city, people often move to be closer to it anyway).
As a matter of policy I wouldn't switch companies for less than a 30% monetary premium over my current TC (I'm a SWE), and other soft criteria like type of work and company culture. In my early career I've gotten 50-100% premiums each time I made a hop.
My policy is the opposite – I switch companies every two years. Especially if I get too comfortable. Usually because I’m bored or because the company grows too much (>100 people is too much for me).
Are you worried that you never get to see the results of architectural decisions you make? Two years is not much time to make an impact and see it through if you’re senior+
This allows all sorts of normally illegal discrimination via ai pass through. Never hire pregnant women, sick people or employees over 30 again. Target for race and religion whatever you want. Basically everything that’s scary about chinas social credit score except private run with zero accountability.
If that’s true and this has a null effect, why would a business pay for it? There must be some utility for them. Like others already pointed out: information asymmetry undermines worker’s ability to negotiate, resulting in lower wages for everyone.
> I'm not seeing how this matters
Same. This is how any market works. I think one of the problems (US only maybe?) is that talking about salary is generally taboo. The first thing you should do with all your friends is be open about how much you make, and then go online and look for more data. That way you start with some good data points. Next is talk about negotiating. I was taught growing up that everything is negotiable, but later in life I learned that not everyone knows that.
What I find funny about this is that stories have been floating around for *years* about HFT/quant firms specifically hiring quants to work out what the lowest they can pay people in the firm is, and still keep them.
> … said the company “does not use algorithmic wage-setting tools to make compensation decisions for our employees or to set new-hire salaries.”
When the HR/CRM/ERP/whatever internal software has the plan to compute these metrics and they display it as metadata next to the people’s names, it’s hard not to curious « just to check ». Maybe it’s not in the company policy but you can never be sure of individuals actions (especially big corps as mentioned in the article)
And our AIs can give us insight into what is the highest salary that the given company can offer.
"Our AIs"? The AI models belong to giant corporations (Google, Microsoft) or are receiving millions of dollars serving giant corporations. How are they yours?
A better solution is passing laws on wage transparency. For most jobs, the company has a range in mind. Make them post that range in the job offer itself. Short of robust labor unions bargaining for better wages, transparency in the job posting is the next best thing.
When I apply for a job, I use data to figure out the highest salary the company will accept.
When I've applied for jobs and done salary negotiations, I try pretty hard to find out the max I can get using as many variables that I think are relevant (e.g. years of experience, previous companies I've worked for, projects I've contributed to, etc). No one is writing an article trying to expose me for this.
I think the concern is how invasive they can be when doing this. It's one thing to quickly search your name on Google or something, but they can do creepier stuff. They can look at many, many more variables that I can, and it's a little creepy. It seems a little wrong to use peoples' credit scores in order to squeeze down a lower salary. I don't think there's anything even remotely comparable that a prospective employee can do.
> remotely comparable
If it's publicly traded, the company's financial situation is laid bare.
Nobody is obliged to accept a lowball offer, either.
You have less data than the company
What are you talking about? You have access to far more info on them than they do on you.
The internet has information on what salaries a company pays. One would be foolish to not look it up before negotiating compensation.
Definitely not for all companies let alone all positions.
You can get it from similarly positioned positions. For a simple example, you can google average starting salaries for your major. You can submit your resume to AI and ask it what your salary should be. You can go to a recruiter, who makes money by getting you as high a salary as possible (and they do know their business and their clients).
I've been on both sides of the negotiating table. The idea that the employer dictates terms is not reality.
Here's a freebie:
- $30k for anything that helps my community / humanity
- $100k for anything harmless that I just don't give a damn about
- 3 million per month after tax to work on weapons of war
Needs to be made really illegal so they are scared of multi million law suits and whistleblowers.
It is not up to employer to tell me what to accept. If they lowball me, odds are high that I will just not accept it, or if I do, I will be sure to leave them as soon as I get a more reasonable offer, preferably in the middle of a project with no notice beyond what any prior agreement calls for. I will treat them the way they treat me.
People tend to think that income taxes lower your salary. While in practice employers know exactly for how little money (in hand) you are willing to work and in absence of income taxes would just pay this much less so that your money in hand is the same.
As an employee you should fight for income taxes to be as high as possible since they are neutral for you and might fund useful things for all. When left in the pocket of your employer they just become their takeaway. Employers won't spend it on improving the company if they don't have to. And the only things that force them to spend money in a predictable manner is regulation and markey opportunity to earn more. When they have those needs they mostly do it with credit anyways.
Conversely as an employer you should advocate for lowest income taxes possible for your workers.
You're suggesting that 100% of the income tax burden is shifted from employees to employers.
The incidence of taxation (which party bears the burden of the tax, irrespective of who 'pays' it) is widely studied. As it relates to payroll taxes (paid by the employer) and income taxes (paid by the employee) most research finds that employees bear most (but not all) of the burden. This is the opposite of your claim.
It's not shifted. It's just there. It was never on the employees. Employees don't have their own money to tax. Employees money is employers money. That's its source.
Employees get taxed when they spend money by being consumers. Sales taxes and VAT are their tax burden. But income taxes of the employees are the burden of the employer. It's employer who has to fork that money because otherwise he wouldn't be able to pay enough so that the employee agrees to work.
The poster is referring to https://en.wikipedia.org/wiki/Tax_incidence
It's really not as straightforward as they make it to be:
https://www.sciencedirect.com/science/article/abs/pii/S00472...
Higher taxes cause gross pay to raise.
There's evidence that increasing cost of operation of corporations through taxation is not fully born by workers. It falls in large part on the owners and landlords (who were omited in earlier works on income tax incidence).
https://www.google.com/url?sa=t&source=web&rct=j&opi=8997844...
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Just imagine what would happen if income taxes for employees were reduced to zero. If you think employees would have that much more money you don't think straight. Employers don't pay workers as much as they can. They pay them as little as they can and that mostly doesn't change with the tax rate.
That's all you need to know to understand the actual mechanics in presence of misleading labels. Nominally income tax (of employees) is just a tax on purchase of labor.
Another angle you could use to understand this is that reduction of income tax (for bottom 90% of earners) promotes employment. Why is that? Beacuse it makes the labor cheaper.
No, that's not what the evidence shows, eg: https://www.sciencedirect.com/science/article/abs/pii/S00472...
> Gruber is able to identify incidence on gross earnings as well as on employment by exploiting variation in payroll tax changes between firms. The benefit of the payroll tax cut is found to have been fully shifted to workers through higher earnings, with no significant employment effects. With similar objectives, Anderson and Meyer, 1997, Anderson and Meyer, 1998 use US firm-level micro data to measure the effects of changes in an experience rated Unemployment Insurance system. Payment variation between firms, due to the number of workers laid off subsequently claiming UI benefits, allows identification of the incidence of the tax on earnings. At the four-digit industry level, Anderson and Meyer find full shifting of the burden of higher payroll tax from employers to workers in the form of lower earnings. They report insignificant employment effects. We find strong evidence of partial shifting of the burden of income tax from worker to employer. Although income tax is incident on equilibrium wages, the tax burden is not fully shifted.
From the same paper:
"Higher marginal tax rates are associated with increases in gross wages and earnings."
The part that you cited is where they cite the old papers by other authors. They also say why conclusions of those papers might have been wrong:
"Moreover, we show that ignoring the potential labour supply response to a tax change, following the methodology of Gruber (1997) or Anderson and Meyer (1998), as well as ignoring the endogeneity of the marginal tax rate, may lead to the erroneous conclusion that the tax is fully incident on equilibrium earnings."
just create your own company, report you pay yourself the equivalent of $676,942.00 to this credit agency. Then watch your numbers go up
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>Ameribrains.
If you want someone to read everything you have to write, abstain from triteness like namecalling.
This might hold water if US software engineers weren’t significantly better off than SWEs in any other country.
You paint this bleak picture of someone agreeing to scraps to avoid starvation but the numbers are quite clear that working in software puts you way ahead of any of these countries with software labor unions.
You’ll rightly need pretty significant evidence to get people on board with a system that appears to have worse outcomes.
It’s not “literally life or death”. We have unemployment benefits, we have quite low unemployment rates and people can go work in other industries if they want to get paid like a software developer anywhere else in the world.
Well said. Disregard the Philistines. Clearly not worth the effort to reach anyway. Greatly appreciated the insight. Even the Ameribrain comment was actually warranted. Since the 70's, there's been a concerted effort by employers to do everything possible to discredit Unionization in the United States, in spite of the fact that during it's heyday, unionization was responsible for netting workers a much greater share of the pie than has been the case post '71. If people would group up, they'd find themselves in a far less disadvantaged position at the negotiating table.
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Social mobility in the USA is actually pretty abysmal compared to Social Democratic countries. It ranks at like 25ish worldwide. Generally if you are born to poverty in the US, you stay there.
Ah yes, the social mobility in countries, where moving up does little to nothing to your income and in some cases just robs you of benefits of being poor.
100% agree and this will be impossible to explain to the largely “ameribrained” crowd on HN, we are facing pathological capitalism. It’s consolidated, it’s expensive, it’s immoral. We need to stop this temporarlily embarassed billionare crap and band together to beat these companies back down to a competitive, costumer serving, world enhancing not destroying size.