A horse race that takes minutes can be an analogy for a lifetime career. Race handicappers evaluate a horse’s past performance to determine future outcomes. Imagine this mindset applied to salary negotiations.
Horse races are often as much about breakaway from the gate and maneuvering through the pack as they are about running ability. Capable runners don’t always get to rack up the statistics that would make them the favorites. Those closer to the outside rail have to try harder because they’re covering a longer distance.
A bill passing through the state legislature, House 2802 and Senate 1423, would prohibit Massachusetts employers from seeking job candidates’ salary histories in job negotiations. It would also prohibit longstanding employer bans on employees discussing salary with their colleagues.
In a completely impolitic cultural analogy, imagine that the ones with a balky start – as measured by pay in the first job after college – are female graduates, as compared to their male counterparts. Not to get sidetracked into a gender war, but if there’s an entire class of job candidates who come out of the gate at a disadvantage, how hard and for how many decades will they have to work to overcome that?
When the news about the proposed state bill broke, reports cited a 2012 study conducted by the American Association of University Women using data from 2009, tracking grads from the class of 2007 or 2008, showed that women graduates in the same professional fields as their male counterparts and working the same 40 hours a week, lagged in salaries by 84 percent across all disciplines. The study repeatedly emphasized that even women in high-paying college majors trailed their male counterparts in salary their first year out. Examples: In the computer sciences field, women’s earnings were 77 percent of their male counterparts; in engineering, it was 88 percent; business, 84 percent and social sciences, 83 percent. Overall, the study revealed that first-year starting salaries for newly minted male grads in 2009 were 7 percent higher than for female grads.
The well-known arguments about the causes of gender-based pay disparities, which include both career and family/life choices, were taken into account. Just as in horse races, early results can be used to determine future career trajectory, at least in the willingness of future employers to bet on their picks.
Let’s return to gender-neutral territory, for the sake of the state bill, which would apply to everyone. First caveat: Since 2009, the economy has improved to the point that even WalMart and The TJX Cos. Inc. recently announced that they are raising wages to stay competitive. Upper-end markets will likely follow. Second caveat: Even if a state law prohibiting employers from requesting salary history gets passed, that information is probably accessible either through professional networks or social media. And third caveat: A general social taboo about money talk will make some people self-select themselves out of the discussion.
Ultimately, market forces will be a big determiner of future salary levels, law or no law. But a system in which performance and responsibilities trump the numbers on one’s prior W-2s should be actively encouraged.
