Why are salaries typically not public knowledge? [duplicate]

Question

I might be the first person in history to ask this, but... Why are salaries typically forbidden to talk about, forbidden to disclose? In most companies there is a staggering lack of transparency concerning employment benefits.

Who does this benefit, except large companies? What would happen if employees decided to make their salaries public knowledge within the company, and possibly outside? If salaries were public knowledge, discrimination would be impossible, since it would be immediately visible and possible to report.

Most importantly, why does this situation continue, despite being disadvantageous for all employees?

Answer 1

It breeds jealousy. "Why is he getting x if I only get y?"

Even if the person is correct to wonder about why someone gets x and someone else y, that's not the whole picture. The market may have just been different when one person was hired, or one person may have other benefits (company car, more vacation).

Answer 2

• Companies (or, if you prefer, the very rich people) actively discourage sharing the salary information; the monopoly of this information is a huge financial benefit to them.
• Employees are either indifferent to "politics", that is to shaping the system by which the civilization runs today, or they support the current one.

I wrote a rather long diatribe expanding these points, but it grew so bitter I decided not to share it.

The observation which could escape many readers: publicly known salaries give a great power to employees to get more money from the employer.

Some say that secret salary negotiations are advantageous to the most powerful employees. Are they? Well, the power of these employees is quite soft: knowledge, skill, experience, relations, performance.

Publicly known salaries could lead to the public salary negotiations, which could then lead to collective negotiations (think trade unions). What is the negotiating power of a whole team? Humongous. Just for starters it trivially includes the soft power of the team's top employee (the same knowledge, skill, experience, relations, performance that a top employee could use in secret negotiations). Now combine it with the soft powers of all other team members. Now add the hard power: "we are yet to see if our entire team could continue to work inside this organization".

This illustrates how even the top performer can expect some gain, while it's true that the mediocre performer gets relatively more.

Answer 3

Your conjecture is too general, in fact many companies have set salaries for various roles which are known. In much the same way as govt departments often advertise their salaries transparently.

I've also worked in places where some staff are not only open about how much they make, but quite loud about it.

In places where they don't there are a few reasons why, on the companies side morale is a big factor, it's not a great idea if a staff member knows that the guy next to him doing the same job is making more money. Also keeping the salaries secret makes it much easier to negotiate. Finally it means that you can negotiate with people separately which can make a huge difference.

From the staff members side it means you can also negotiate harder because if you manage to get a hefty raise and others don't know, then the company isn't going to have issues with everyone expecting a similar increase. Therefore you have a better chance of getting it.