My friend, Kosmo at The Casual Observer clued me into a Associated Press article about Norway opening up their country’s tax records. The belief by the Norwegian government is that transparency is the best policy. That transparency comes in the form of releasing a “skatteliste” or “tax list” to the media.
I realize that other cultures have other customs that may seem strange, but imagine this in the United States for a minute. Can you imagine all the privacy advocates in an uproar? (Note: I think I’d be roaring the loudest.) Critics claim that the list creates quite the ruckus in the country. For instance, instead of hearing “My dad can beat up your dad” in the school yard, there’s the “My dad makes more money than your dad.” I guess children grow up fast in Norway, because I didn’t think about money and how much my parents made back then. There’s also the fact that robbers can now calculate the highest return for their thieving effort.
For me personally, part of this concept struck very close to home. A few jobs ago, someone found a disk with the complete company’s payroll information. This quickly circulated around the company through private email accounts. When it got around to me, I was surprised to see that the person who spent half the day asking me questions was making 20% more than me. She also only worked 4 days a week. I know she was a favorite of the managers, but I still thought that was excessive considering I had more experience. In fact, I hinted at the experience as one of my earlier posts on this site.
In a transparent Norwegian-tax world, I would not have been underpaid that long as I would be able to make an easy case for a raise based on knowing what my peers make (and my managers knowing that I know what they make). So maybe this is a good thing for Norway as it can ensure that people get paid more fairly. What’s your take?
Four Pillars says
I totally support sharing salary info with co-workers – how else would you know if you are being ripped off?
Not sure about having my salary as public record tho…
Kosmo @ The Casual Observer says
Pillars – are you talking about voluntarily sharing info with your co-workers? In other words, 4 or 5 of you are sitting around having beers and talking about your salaries? I have no concerns about thus.
But when companies or government entities publish lists, I don’t like it.
My wife work for a state-controlled hospital. Because of state open-records laws, her salaries and the salaries of all of her co-workers are publicly available – in fact, they are published on the web site of the local newspaper. I’m in favor of open records laws as an attempt to make government transparents, but this little issue can be a real pain in the a$$.
It means that I have to hear about people earning salaries that are unfairly high in spite of skills that are perceived as deficient.
I, personally, am quite happy that my employer doesn’t do this. I really don’t care what the person sitting next to me earns. I negotiated my own starting salary and raises with my employer. Of course I use available information about the marketplace during negotiations, but I don’t feel the need to know how much money every else is making. Quite honestly, I don’t see the relevance. If they made $10K less, the money wouldn’t go into my pocket. Nor could I really use this information as a bargaining chip. If I asked for a $10K raised “because Bob make $10K more than me” I’d get laughed out of the room. My raises reflect the increase in my own value during the year.
People may also have skills that are not readily apparent to some other observers. For example, one of my skills is “using my twelve year of experience to stop people from making the same stupid mistake that other peple made three years ago.” Just the other day, I pushed a bit outside of my official span of control to question someone on a decision that had made and suggesting that they verify their proposed design with other users of the reusable component they wanted to change.
They quickly realized that the proposed design was a bad idea. Only a few people saw this (and I’m not sure how many realized the scope of damage that would have been caused), but it saved the company the cost it would have taken to fix the design and re-implement after the problem was discovered in production – likely $10K+. Even worse, it was a public-facing component, meaning that actual customers would have been inconvenienced.
So if the guy who sits across from me looks at my salary without an accurate idea of how I help the company, it’s quite possible that he might not be judging me fairly.
Four Pillars says
Yes, I was talking about a group of co-workers where you volunteer info.
I agree – I wouldn’t want everyone to know.
While I am a bit curious as to salaries of other types of professions – it’s pretty useless info. I do what I do and it doesn’t matter if Joe plumber or Sally doctor make 2x what I do – I’m not going to change careers at this point.
I have to agree. The voluntary sharing of information makes a lot of sense. I just had a friend who found out he has been underpaid for the last two years. The only reason he found out is that HR made his manager angry so he dropped the info to get back at them. Seems like all that could have been avoided by just some openness of people with each other.
Hmmm … I wonder if this would put a stop to buying for appearances? Competition is in our genes — our ancestors howled the loudest, puffed up their chests the biggest, turned the brightest colors to see who procreated and passed on their DNA.
In today’s human world, the primary measure is money. But since it’s not polite to mention your salary or ask others about their’s, all we can do is indirectly disclose our salary by showing off what we consume.
If income was public knowledge, would we then have to drive the fast sports car, wear the designer suits, flash the bling? We’d just say “hi, my name is XYZ” and then somebody is punching that into their iPhone and saying “oh yeah, you’re a badass”.
I have a feeling that the snitch line at the local tax authority might get a workout after this sort of info goes public. “My neighbor just bought this, this and this, and he only makes $$$!” Maybe that sort of behavior is what they are going for though…
Financial Samurai says
Sharing everybody’s salaries probably creates an eventually sameness in all salaries. ‘
When you’re younger, you want to know about other people’s salaries as goals to strive towards.
When you’re older, you become more private b/c people will question your worth, and you may even question yourself. You don’t want to be gunned for.
So, from my perspective, I’m happy to kind of know the salary bands, but not down to the very last detail.
It would cause a riot and lawsuits all around.
I think there should be more salary transparency in the workplace. I think if salaries are private that it leads to far too many unfair salary inequalities. Another good reason to have more openness about salaries is to stop and guard against discrimination in wages. Yes there might be situations where someone is paid more for a reason thats not obvious, but if the system is based on merit then an individuals higher salary should be easy to justify. And if someone else makes less due to a specific reason (no degree) then that should be easily explained too.
The more information we all have the better. If everything is on the up and up then I see no reason to hide it.
Minority Fortune says
Sure, open finances sure would satisfy one’s natural curiosity, but I think an open list would open up Pandora’s Box like you said. It would be interesting to see how people in Norway have gotten accustomed and react to this transparency. It sounds like it comes with various pros and cons.
I’m a Canadian currently working in Norway, and I was aware of this system, though it was a bit surprising when I first arrived.
I can add to this that you don’t have some of the reactions in Norway that you might (rightly) expect in Canada and the USA. The difference here is the Norwegian culture is MUCH less focused on finances and materialism than in North America. They are instead much more focused on personal and familial health, leisure, environment, etc. It’s simply not that big a deal.
I work for a civic government so my salary is listed somewhere
I consider it a violation of my privacy. Sure I am funded by tax payer dollars but that doesn’t make it right to publish my actual salary.
I have no problem with publishing a salary range i.e. Occupation A earns between X + Y dollars.
Why stop at salaries? Let’s publish everyone’s medical tests and doctors visits because after all taxpayers fund health care. I have the “right” to know where my dollars are spent.
Private comapnies should disclose too. Businesses utilize tax deductions so therefore I as a tax payer have a vested interest in knowing that my tax dollars are well spent.
Basically the right to swing your fist ends where the other guy’s face starts.
To publish my salary is the same as hitting me in the face.
For the record I hit back.
When I was in the military, pay was based on grade and time in. If you looked at someone rank insignia and asked them how long they’ve been in, you can get their income easily enough.
I remember when I was making $x (a low number), I was fairly unconcerned sharing what I made. But not that I make significantly more than most people in my area, I avoid discussing income numbers. I feel like it would be uncomfortable when they realized that I make 3-4x their income. My family knows and my close friends know, and none of them care about that.
At work, where most of my peers are within a similar salary band, there is a taboo about discussing salary. There’s a $30k band that everyone in our group sits in (and based on your level, the band is broken down into smaller $10k bands), but everyone avoids it.
However, despite my high income, I live “poorer” than most people. I’m always looking ways to cut heating costs and spending in general. I wash my clothes and then hang them on a hanger on a chain in a spare room. I’m always driving cars that are about a decade old and 100k+ miles.
I think the concept of keeping our salaries private is part of a big social dogma and I personally would have no issue seeing it go away.
However, perhaps things should be sealed for 2-3 years. So if you file your 2009 taxes in 2010, they shouldn’t become publicly available until 2012 or 2013.
Lazy Man says
That’s a good point. My wife is in the military and it’s fairly clear what they are making. However, you can’t get her net worth information.