People want to know what their colleagues are paid but don't want their colleagues to know what they, themselves, are paid. Photo / 123rf
People want to know what their colleagues are paid but don't want their colleagues to know what they, themselves, are paid. Photo / 123rf
COMMENT
The Human Rights Commission wants workplaces to publish detailed gender pay gap information.
The commission's pay transparency utopia must be Norway where anyone can look up anyone else's tax return. Full utopia came in 2001 when every tax return was put online. Apps were developed to build scoreboards ofthe incomes of your Facebook friends. Burglars got a leg up too with a mobile app to allow anyone to know the incomes of people living in the surrounding streets.
Online inquiries about Norwegian tax returns dropped 90 per cent a few years ago after taxpayers started to be notified of the name of anyone who looked up their tax return. Nosy parkers prefer their privacy.
Robert Nozick wrote about how most envy is local. Most don't envy far away riches. Most envy is about the success of the person in the next desk. After their promotion is announced, you're muttering to yourself, "that could have been me, that could have been me". Small differences drive envy but this is topped up by the bitterness that most whom you envy earned their successes by working harder than you.
Most surveys show that people want to know what their colleagues are paid but don't want their colleagues to know what they are paid. Nosy parkers prefer their privacy.
The BBC has been riven with jealousy after publishing its in-house gender pay gaps. One TV presenter successfully litigated over her pay gap with her co-presenter because they did similar things on-air.
She had had a good career as a TV presenter and was paid £400 ($796) an episode. After a successful career as a war correspondent, her co-host, who was paid £3000 an episode, had succeeded Terry Wogan as Panorama host from 2008 to 2015. Wogan was the Michael Parkinson of UK political chat show hosts.
Your pay is driven by your next best job offer. No one who is earning £400 per TV episode stays in that job if their next best offer is a few thousand pounds more.
Television is one of the most competitive industries in the world. If you don't rate, you lose your job. If you rate, your pay goes through the roof.
In jobs where there is scope for bargaining over the wage, the ability to keep your pay secret allows you to strike a private deal to be paid more if you are a cut above the rest. Employers prefer pay rates to be public because this makes their pay offer more credible as final offers because others will soon learn of it. If your employer gives you a public pay rise, colleagues who aren't really up to your mark but think they are will clamour for the same pay rise so there will be morale problems and petty jealousies.
Jim Rose. Photo / supplied
Competition forces employers to pay the going rate and undercut each other secretly to hire the best workers. In time, everyone is paid more. The bane of every cartel is secret price cutting. Every employer wants other employers to hold their wage offers down so they can poach their best and brightest by paying a little more. Wages spiral upwards as each employer secretly pays just that little bit more.
Instead, the Human Rights Commission wants workplaces riven with envy. This reminds of the old Russian joke about the peasant who cried out for relief from God when his neighbour bought a second cow. When God asked how to answer his prayers, the peasant said, "shoot the cow".
• Jim Rose is an economic consultant in Wellington and blogs at utopiayouarestandinginit.com
