No, because employers have an upper hand and more information (in most scenarios of buying and selling labor).
The benefit of the law would be to give all market participants access to more information, but it is also important not to unnecessarily restrict any of the market participants.
It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants. For a labor seller, they will know to avoid labor buyers that cannot provide a decent bottom pay for their job listing.
It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants.
Wait this doesn't make sense.
If you think that employers would get better applicants if they put more accurate ranges... then they'd be putting accurate ranges right now, as nothing's stopping them.
Why does the government need to step if it's it's obviously such a good deal for the employers right now?
And why would I ignore a company with a wide range? I don't care if the range is wide, as long as I get the upper end of it.
Why does the government need to step if it's it's obviously such a good deal for the employers right now?
Because employers have had disproportionate power over labor for a very long time. Might not be so much for engineers/doctors/lawyers/etc, but 80%+ of people are walking into a negotiation in a weaker spot with less info than the employer.
That is why in the past couple years, we are finally seeing signs outside Taco Bell and signs on bus driving advertising pay rates. Until now, they have enjoyed a better negotiating position than the employees.
And why would I ignore a company with a wide range? I don't care if the range is wide, as long as I get the upper end of it.
Because if I am capable of getting the upper end, and another employer is offering the upper end, but with a higher lower end also, I am not going to waste my time risking getting a lower offer. Applying to a job and interviewing have costs.
You think it's an advantage to companies to post more accurate pay bands - right? You said "It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants."
But they can post narrow bands right now if they want to - they don't need to wait for the law to tell them do it.
If it's an advantage to them, then why aren't they doing it anyway?
I would guess that the answer is it's not an advantage, because most of the time their pay is bad, and telling people up front does not help them. I've seen this with companies like ThoughtBot and GitLab that make a big deal out of pay transparency... problem is they're being transparent about how bad their pay is.
If it's an advantage to them, then why aren't they doing it anyway?
Because it does not sufficiently offset the advantage they get from withholding pay information from labor sellers.
As soon as it does help employers more than it hurts them, they do advertise pay. Now that labor supply has shifted so drastically that restaurants and retailers have to close early, those places are advertising pay.
The purpose of the legislation is not to help employers, it is to help employees, who are at a disadvantage due to lack of information among other things.
I've seen this with companies like ThoughtBot and GitLab that make a big deal out of pay transparency... problem is they're being transparent about how bad their pay is.
Their pay is bad to you. Maybe it is acceptable to someone else. Maybe someone is earning $20 as a bus driver and wants to switch jobs. Maybe they would be willing to work for ThoughtBot and Gitlab’s wages and work to become qualified.
Or maybe their pay is objectively too low and they will eventually go out of business. Either way, price transparency always leads to better resource allocation and better functioning marketplaces. Letting either buyers or sellers have long term disproportionate advantages is not in society’s best interest.
They don't have more information. They don't know:
- what the prospective employee is currently paid
- what the prospective employee would move job for
- how serious the alternatives the prospective employee mentions are
Those three are the things the prospective employee knows, that the prospective employer is trying to guess. This new law erodes (and will likely eradicate) the first one, as it's basically a statewide public salary banding system.
Also, this probably isn't all just "labor" jobs. I think it's all jobs.
An employer usually has more information about market prices than an employee because the employer is simply hiring or at least interviewing more often. Plus they might have access to things like https://theworknumber.com/ which can show them accurate pricing nationwide and per applicant (although this CA law would outlaw that).
It should never be relevant to an employer what a candidate is currently being paid.
Also, this probably isn't all just "labor" jobs. I think it's all jobs.
I do not understand this. All jobs involve a worker selling labor to someone else.
It should never be relevant to an employer what a candidate is currently being paid
Well they aren't going to come and work for you unless you pay them more than what they're currently being paid (unless they're moving for something like life reasons) so I don't think there is any more relevant number than that.
It should never be relevant to an employer what a candidate is currently being paid.
Of course it's relevant - it helps them understand what can tempt an employee away from their current job. That's why it's worth hiding it. This law stops it being hidden.
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And that is the applicant’s choice if they want to spend their time on finding that out.
Otherwise they can apply with Apple, Alphabet, Microsoft, and Facebook who might be hiring within a narrower, but higher pay band.
So... what's the point of the law? Isn't this already the case?
No, because employers have an upper hand and more information (in most scenarios of buying and selling labor).
The benefit of the law would be to give all market participants access to more information, but it is also important not to unnecessarily restrict any of the market participants.
It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants. For a labor seller, they will know to avoid labor buyers that cannot provide a decent bottom pay for their job listing.
Wait this doesn't make sense.
If you think that employers would get better applicants if they put more accurate ranges... then they'd be putting accurate ranges right now, as nothing's stopping them.
Why does the government need to step if it's it's obviously such a good deal for the employers right now?
And why would I ignore a company with a wide range? I don't care if the range is wide, as long as I get the upper end of it.
Because employers have had disproportionate power over labor for a very long time. Might not be so much for engineers/doctors/lawyers/etc, but 80%+ of people are walking into a negotiation in a weaker spot with less info than the employer.
That is why in the past couple years, we are finally seeing signs outside Taco Bell and signs on bus driving advertising pay rates. Until now, they have enjoyed a better negotiating position than the employees.
Because if I am capable of getting the upper end, and another employer is offering the upper end, but with a higher lower end also, I am not going to waste my time risking getting a lower offer. Applying to a job and interviewing have costs.
Sorry I'm still confused.
You think it's an advantage to companies to post more accurate pay bands - right? You said "It will be obvious that if a labor buyer is putting out $min wage to $1B pay ranges, that they should be ignored and/or they will get the worst applicants."
But they can post narrow bands right now if they want to - they don't need to wait for the law to tell them do it.
If it's an advantage to them, then why aren't they doing it anyway?
I would guess that the answer is it's not an advantage, because most of the time their pay is bad, and telling people up front does not help them. I've seen this with companies like ThoughtBot and GitLab that make a big deal out of pay transparency... problem is they're being transparent about how bad their pay is.
Because it does not sufficiently offset the advantage they get from withholding pay information from labor sellers.
As soon as it does help employers more than it hurts them, they do advertise pay. Now that labor supply has shifted so drastically that restaurants and retailers have to close early, those places are advertising pay.
The purpose of the legislation is not to help employers, it is to help employees, who are at a disadvantage due to lack of information among other things.
Their pay is bad to you. Maybe it is acceptable to someone else. Maybe someone is earning $20 as a bus driver and wants to switch jobs. Maybe they would be willing to work for ThoughtBot and Gitlab’s wages and work to become qualified.
Or maybe their pay is objectively too low and they will eventually go out of business. Either way, price transparency always leads to better resource allocation and better functioning marketplaces. Letting either buyers or sellers have long term disproportionate advantages is not in society’s best interest.
They don't have more information. They don't know:
- what the prospective employee is currently paid - what the prospective employee would move job for - how serious the alternatives the prospective employee mentions are
Those three are the things the prospective employee knows, that the prospective employer is trying to guess. This new law erodes (and will likely eradicate) the first one, as it's basically a statewide public salary banding system.
Also, this probably isn't all just "labor" jobs. I think it's all jobs.
An employer usually has more information about market prices than an employee because the employer is simply hiring or at least interviewing more often. Plus they might have access to things like https://theworknumber.com/ which can show them accurate pricing nationwide and per applicant (although this CA law would outlaw that).
It should never be relevant to an employer what a candidate is currently being paid.
I do not understand this. All jobs involve a worker selling labor to someone else.
Well they aren't going to come and work for you unless you pay them more than what they're currently being paid (unless they're moving for something like life reasons) so I don't think there is any more relevant number than that.
Of course it's relevant - it helps them understand what can tempt an employee away from their current job. That's why it's worth hiding it. This law stops it being hidden.