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Google Staffers Share Salary Info With Each Other; Management Freaks
Nerval's Lobster writes: Imagine a couple of employees at your company create a spreadsheet that lists their salaries. They place the spreadsheet on an internal network, where other employees soon add their own financial information. Within a day, the project has caught on like wildfire, with people not only listing their salaries but also their bonuses and other compensation-related info. While that might sound a little far-fetched, that's exactly the scenario that recently played out at Google, according to an employee, Erica Baker, who detailed the whole incident on Twitter. While management frowned upon employees sharing salary data, she wrote, "the world didn't end everything didn't go up in flames because salaries got shared." For years, employees and employers have debated the merits (and drawbacks) of revealing salaries. While most workplaces keep employee pay a tightly guarded secret, others have begun fiddling with varying degrees of transparency, taking inspiration from studies that have shown a higher degree of salary-related openness translates into happier workers. (Other studies (PDF) haven't suggested the same effect.) Baker claims the spreadsheet compelled more Google employees to ask and receive "equitable pay based on data in the sheet."
In the US, at least, they can't prevent it. If people want to talk about that, let them do it.
Employers afraid of employees asking for raises, film at eleven.
I firmly believe that when job-hunting, you should know how much you'll be making when you apply. I've been through a number of interviews for what seemed to be great positions, only to have to turn them down after being offered the job because they weren't paying a decent wage for the job at hand.
Making public how much everyone is making goes a long way to keeping job-seekers aware of how much they are worth. Hiding salaries only helps companies, who can then keep low-balling people.
Back when I was in the Army, we all knew exactly how much everyone else made in base pay, from E1 to O9. That at least gave incentive to work up the chain from the bottom.
Remind me why would management not like that?
It has been so taboo at many of the places that I have worked to talk about salary.
The place I work now is very guarded about this as well. We recently had someone canned because they opened someone else's offer letter (which was sitting on a shared workstation).
I have always just assumed it was conspiracy cooked up in a board room full of men long ago as a way to enable pay inequality.
My eyes reflect the stars and a smile lights up my face.
Baker claims the spreadsheet compelled more Google employees to ask and receive "equitable pay based on data in the sheet."
90% of drivers think they are better than the average driver, and I would bet 90%+ of workers think they are better than average, and would therefore expected to be paid above the median (note for the statistically challenged - 90% of a group cannot be above the median). This study will give them data to know where they are on the graph. How will management deal with 90% of their workers demanding to be paid more since they are being paid below what they think they should be based on their (biased) self-assessment?
if you have two people doing the same and one is grossly underpaid, he or she will not sit back and take it as bosses dish it out. What is so surprising about this?
__________
The more I know people, the more I love animals
The contracting agency gave me a new fancy title, "Senior Systems Administrator," based on 18 years of I.T. experience, when they renewed my contract. I pointed out that a Senior Systems Admin in Silicon Valley makes $40K more per year than what I'm getting paid now. I heard their frown all the way from the East Coast on my raise request. Didn't help that the company I'm assigned to gave me server access to fix a blotched printer migration.
The (American only?) taboo on discussing compensation simply perpetuates inequality. If it seems unfair it probably is.
Management can get away with not paying the going rate if people aren't aware they are being short changed. Knowledge of what the going rate is should be enough to put some steel in their spines.
The big difficulty is that salary gets really complicated, really fast. It helps many people, but building the system that is equitable would be difficult, and all the positive outliers could be harmed in the process.
SCENARIO: Money is a little tight but applicants are plentiful. We interview lots of people, and three of them look very qualified and are willing to work for a certain wage in a tight range. All hired. Three months later the group discovers a unique need, needing a developer on a specific tool with specific skills. They'll be hired at the same job title, but because the group need a specialized skill immediately, they will go through a headhunter and ultimately pay a premium for that fourth worker. Now, because all four have the same job title, the critical question: should the company go back and increase the three other workers' pay to the same pay rate of the fourth worker with the specialized skill? Should they refuse to hire the specialist at a rate above the other three?
In some fields it can make sense to standardize pay. Most skilled trades operate this way. There is a standard rate in a region for a Journeyman with specific certifications. Trade unions can help fight for specific benefits. You know that this class of tradesman has a specific skill set and can be hired for $27/hour. You need four of them. All of them are treated as interchangeable.
In other fields it can make far less sense to standardize pay, mostly because there are many variables. Unfortunately software development is one of those fields where it is complicated. It would be really convenient -- both for applicants and employers -- to have such a scale. This is a Java programmer with seven endorsements certified at grade 27, so pay is automatically $x.
But unfortunately for this field, technology is ALWAYS changing, so the scale would be difficult. You were certified in version 3.2, but the system has moved on to version 4.1. Does that individual lose the old certification? If they take the new industry trade group's course do they now have 8 certifications instead of seven? Do certifications expire over time, or transfer between technologies? With the huge number of technologies out there, does that mean we'll have thousands, perhaps tens of thousands, of different certifications for the trade union? How are individual certifications weighted, and how are they equivalent? Is a master Direct3D 12 certification the same value as a master PostgreSQL 9.4 certification? Is a PostgreSQL 9.4.4 certification valued differently than a PostgreSQL 9.3.9 certification? If someone has certifications in other specializations, must those apply in the cost? With the rapid pace of an enormous number of technologies, what prevents someone from getting hundreds of certifications? Such as "I've got 47 certifications, one for each version of the software released over the past two years"? While it works good for slower-moving trades, it does not work so well in software.
Sometimes I feel it would be nice to have programming trade unions. There are many features like collective bargaining for benefits that could be nice. But for actual salary levels, union-based standardized wages would be a nightmare. It would add a convenience factor to ensure new workers have certain minimum competencies, but it unfortunately adds maximum values as well. Nobody wants to know that they could be making more due to market pressure.
By establishing fixed buckets of pay levels, it establishes both a minimum (yay) and a maximum (boo) within a region. If you've got any kind of specialization or exotic skill -- and many of us do -- those same pay buckets that help many people also hurt the top performers.
//TODO: Think of witty sig statement
For those that have worked in the public sector this is often the norm -- at least it was where I worked. Back in the dark ages (pre Internet) the State Audit department published a book with every employee's actual earnings and travel expenses annually. That document was a public record and available to anyone who knew about it and took the trouble to get a copy. When the Internet came along the data is now on line and searchable on a public web site. When vendors came to sell us the latest and greatest security gismo or software their standard example of confidential information was the employee salary data. Once it was on line I always got a kick out of going to the Web site and calling up the application and showing them that salary data was NOT at all confidential where we worked!
While interviewing for jobs last year, I ran into a former coworker who was still working at the same company and making slightly more money than I did when we worked together nine years ago. He stayed in the same position and accepted 2% pay raises over those nine years. I did short-term contract work — anywhere from a day to a year — for various Fortune 500 companies in Silicon Valley, making 80% more money because I have much broader range of experiences in assignment and corporate cultures. Go figure.
At every company there's someone that works harder than you and makes far less money than you. Conversely, there's also someone that works far less than you and makes way more money than you.
If the company didn't think they were worth it, wouldn't be getting paid it.
No matter what you make, there is someone who is going to be jealous and will try to undermine you.
Management didn't "freak". The spreadsheet in question is alive and well, and Google employees continue adding their information to it (I did). If management really wanted gone, it would be taken down. Erica Baker's manager wasn't happy about it, and she was invited to talk to her manager about it. It may or may not have bothered someone above her manager; Erica doesn't know and neither do we.
Her manager also chose to interpret the peer bonus rules such that the bonuses peers sent her forward weren't given to her. That's at least partly correct on her manager's part. The peer bonus rules say that any given action/effort can only be rewarded once. If the manager feels that it was a really valuable contribution the manager can choose to discard the peer bonus ($125) and instead award a larger spot bonus (amount variable), but only one peer bonus per act.
What is a little bit weird was that Erica said peer bonuses were rejected before one was approved, so the rejections before the approval weren't due to the one PB per action rule. Also weird is that Erica said her colleague got multiple bonuses for the spreadsheet. That shouldn't normally happen.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
I would sure as hell like to know what people made
at a company before I started there... aftewards, meh not so much..
That's a bit short sighted...
Esp given the current trend of paying new people in this competitive job market more than current employees for similar positions...
Although if you don't care about being underpaid, I guess it doesn't matter much...
You do realize that 'perfect information' is one of the defining characteristics of the idealized model of 'free market' behavior? You don't have to like it; but calling anything vaguely related to money that displeases you 'socialistic' is dumb beyond words.
"Secret salaries" is a classic prisoners dilemma, but with a twist. Here the prisoners are allowed to communicate to achieve the statistically best mutual outcome, but the statistically best mutual outcome also comes with the slight penalty that the one with the best outcome currently (highest paid for position) not only receives no direct benefit, but also receives a slight penalty in that if others use the information to say, get a raise, their highest paid position will be lessened or eliminated.
Now statistically, in a company with thousands of employees, many with roughly the same "position" the logical thing to do would be to share, as odds are extremely good you aren't in that highest paid position and thus can only receive benefit. But the idea that you *MIGHT* be has probably kept employees from doing this before now.
Inflation isn't a problem, as the current rate is well below the Fed's target rate of 2%. Where most people get into trouble is thinking that they deserve finer things in life when they make more money. Hence, bigger houses, bigger cars and bigger TVs. It isn't long before they find themselves in the same predicament they were in before, still thinking that more money would solve all their problems.
Your salary and compensation is personal information and your company should never share without your permission. (Unless there is a public reporting requirement, of course).
However, I don't see why you can't choose to share your own salary information. My only concern would be that there could become some sort of pressure group so that everyone has to do so.
I think it is a bad idea to share salaries except in the most anonymous of manners. I don't mind someone knowing how much a person with my job title makes on average, but its a big deal if someone knows exactly what I make. There are lots of considerations that go into salary numbers, and those can't be adequately assessed by simply sharing the numbers.
usually has a clause explicitly saying we can't discuss our pay with other contractors. I always found this a bit evil, since it's only purpose is to depress wages overall. But if Google doesn't include such a clause in their employment contract, too bad for them.
I worked for a university that paid its lecturers based on years with the university and level of terminal degree (a PhD was worth $50/course than a master's degree; no extra $ for multiple degrees at any level). Everyone knew (or could have easily determined) what I earned and vice-versa. It didn't quell grumbling in the ranks, but I don't think anyone was upset by that aspect of our situation.
Geology - it's not rocket science; it's rock science
It was a google docs spreadsheet ;)
Anyone?
Requiem for the American Dream
Though you are probably right about not going into the public sector, I fail to see why some management should not be paid like peons, and vice versa.
When all you have is a hammer, every problem starts to look like a thumb.
Some employees deserve more compensation than others. Get over it.
Most linux users don't know this, but the man pages were named after Chuck Norris. Chuck Norris fsck'ing hates noobs!
Some 30 years ago I worked for a company where discussing salary info with co-workers was cause for dismissal. Problem was, they had a boatload of titles, each title had maybe a 5k range in salary. The titles and salaries with each said title was easily available.
The problem? Everyone had their title printed on the business cards, and the company directory listed everyone's title. So I didn't need to ask how much you made. You were a widget master 3, therefor you made from 20-25k.
My company does management training yearly, and every time they remind us that per NLRB rules, we can't tell employees not to discuss salary info amongst themselves. And unless you're being a shitty employer to begin with and treating people unfairly, you shouldn't really care if people discuss it. As long as you can rationally explain to a judge why different people are paid differently, who cares?
Where most people get into trouble is thinking that they deserve finer things in life when they make more money. Hence, bigger houses, bigger cars and bigger TVs. It isn't long before they find themselves in the same predicament they were in before, still thinking that more money would solve all their problems.
Inflation IS a problem, because people think they at least deserve the same things they could afford last year, but because companies are too cheap to give COLA, you are effectively getting paid less every year and can't afford the things you could last year.
However, as far as getting more money goes, I agree that an extra 10 or 20% isn't going to mean much for very long, but I used to make more than 4 times (adjusted for inflation) what I make right now, and I can tell you that that money DID solve all my problems. I could save up for a couple months and buy a car for cash if I wanted to. I was putting $3k to $4k into mutual funds every month. I had no credit card debt. Now, I am underpaid and have eaten through all that I saved up in that period and more, and I have credit card debt again because I had to take out money to live on. I have sold the cars and the stocks, and moved into a cheaper house. But I know I could comfortably live with breathing room on about 40% of what I used to make back in 1998 (adjusted for inflation).
If you are not allowed to question your government then the government has answered your question.
While interviewing for jobs last year, I ran into a former coworker who was still working at the same company and making slightly more money than I did when we worked together nine years ago. He stayed in the same position and accepted 2% pay raises over those nine years. I did short-term contract work — anywhere from a day to a year — for various Fortune 500 companies in Silicon Valley, making 80% more money because I have much broader range of experiences in assignment and corporate cultures. Go figure.
Businesses are stupid. They won't pay you raises even if you ask for them. They would rather you quit and then they will have to hire somebody else and train them, losing months of productivity and probably having to pay 120% or more of your salary to attract the talent, rather than just give you a lousy 10% raise.
If you are not allowed to question your government then the government has answered your question.
Base salary and bonuses are not the only forms of compensation to think about. Depending on your position you may have paid conferences and training that you are sent to. You may have a paid cell phone, internet services, bring your own device voucher, new technologies voucher, company vehicles, holiday and paid time off, stock options, retirement, health and wellness benefits, coveted vendor "gifts", etc. I could share my base salary and it would be an interesting to others. But it wouldn't show all the various other ways that my company might do to keep me happy. Sometimes compensation is hard to monetize as well. For one person time off or flexible working may be more valuable than increased pay.
There is or can be built a machine that can simulate any physical object. -Church-Turing principle
If you click through to the "article," you'll get a long list of ten-word sentences formatted as tweets. When did this become an even remotely acceptable way of presenting something?
Good lord. If you work for Google, can't you figure out how to create a blog? My mother did it.
How can we continue to believe in a just universe and freedom to eat crackers if we have no ale?
Businesses are stupid. They won't pay you raises even if you ask for them.
Sounds like your boss has you well trained. You won't ever ask for a raise because you won't expect to get it.
Inflation IS a problem
"The latest inflation rate for the United States is 0.1% through the 12 months ended June 2015 as published by the US government on July 17, 2015."
http://www.usinflationcalculator.com/inflation/current-inflation-rates/
but because companies are too cheap to give COLA
"PayScale anticipates U.S. wage growth of 0.4 percent year over year in Q3 2015"
http://www.payscale.com/payscale-index/
so you are wrong on two counts, inflation is not a problem, and wages are in fact rising faster than inflation
these clauses are unenforceable, but apparently you don't know that.
i bet they figured out you were a sucker and screwed you over in about 20 different ways, and you don't even know it.
The Inflation Calculator doesn't take into account the fact that the inflation indicator is a lie. How else does stuff cost twice as much as it did 5 years ago when inflation has only gone up maybe 20%? Inflation says a box of cookies only costs 20% more now than it did 5 years ago, but it doesn't take into account that the box of cookies weighs only 60% of what it did 5 years ago. Cases of soda still cost the same amount, but wait, cases of soda only have 20 cans in them now instead of 24.
Wages growing at 0.4% may beat the inflation numbers, but it doesn't beat how much stuff actually increases in price every year. And there are still hug numbers of employers that consistently give 0% for raise or Cost of Living Adjustment every single year, and there is no arguing that you as an employee have made yourself more valuable to them during that year and should be paid more than a COLA. It is an insult that they don't give you a raise, and a slap in the face that they don't give you a COLA.
If you are not allowed to question your government then the government has answered your question.
Businesses are stupid. They won't pay you raises even if you ask for them.
Sounds like your boss has you well trained. You won't ever ask for a raise because you won't expect to get it.
No, I asked for raises several times a year, and was always told lies and delay tactics.
If you are not allowed to question your government then the government has answered your question.
No, I asked for raises several times a year, and was always told lies and delay tactics.
you're still there, proof positive
Cases of soda still cost the same amount, but wait, cases of soda only have 20 cans in them now instead of 24.
What orifice do you pull this shit out of?
http://www.amazon.com/Coca-Cola-Classic-12-Ounce-Cans/dp/B004JXBHQK
http://www.amazon.com/Pepsi-Cola-12-Ounce-Cans-Pack/dp/B004JX9FDM
http://www.officedepot.com/a/products/368420/Barqs-Root-Beer-12-Oz-Cans/
http://www.walmart.com/ip/Hansen-s-Beverage-Diet-Ginger-Ale-Soda-12-oz-6ct-Pack-of-4/17197594
you must live in some strange weird alternate universe where soda cases have 20 cans, it sure isn't this one
Wow...Google just got schooled by their own belief that information is power.
Again, sharing salaries is a good thing, but does it scale? Gov't (GS levels are well known) indicates no considering their efficiency and employee satisfaction...
One's never going to get away from corporate politics, as much as the young googlers want to in their vision of the "sharing economy":
sharing = exploitation^2; // as the saying goes....
... for taboos.
It's not like most workplaces need more reasons for friction and resentment.
Spreadsheets allow a lot of analysis - and believe me, there's a ton. (I lost count of how many tabs of pivot tables and charts this thing has, because I got tired of scrolling.)
It's alive and well, and you'd think Google could managed to take down a Google Spreadsheet if it was a problem. I don't get the hubbub - it basically confirms what they've been telling us for years about how salary is determined, which as you might expect is fairly well defined.
I have developed a truly marvelous proof of this comment, which this signature is too narrow to contain.
As in they can say, no, we won't give you a raise, Jennifer does the same job for less and she's been here longer. Maybe next year.
excitingthingstodo.blogspot.com
stroking your beard whilst openly counting the minutes until your three-hour shift ends doesn't count as work
Yes it does. It's in the Collective Bargaining Agreement document, section 4, subsection 4.2.6b, under "General notes and allowances".
Be warned that a grievance will be submitted about this by the union representative when she comes back to work after her 54 months maternity leave.
lucm, indeed.
A spreadsheet at Google is state of the art; simultaneous edits, web-enabled, authenticated changes, version control.
FTFY.
Is KNOWING what employee X gets paid while drooling on themselves, never doing anything nor showing any interest in learning anything. All the while you're busting your ass doing 2x the work because Captain Saliva is incapable of doing it at all.
Why should they show any motivation ?
Their pay is exactly the same as the top performing people without all the hard work and stress that comes with it. On paper the work gets done. The reality is it gets done by a fraction of the folks.
It is, however, a double edged sword. The top performers eventually burn out and question why they're working so damn hard when the pay is the same. Eventually, all the employees eventually align themselves with the bottom performers and the whole thing goes to hell.
Sometimes it sucks not being in a positio where you can negotiate salary. :|
How could that be, unless you are suggesting that the idealized form of free market behavior is an impossibility? In which case, why even mention it? This 'perfect information' meme doesn't make any sense if the thing you are describing is supposed to be a representation of actual human behavior...
They still have 24 packs, but the 20 packs cost what the 24 packs used to cost. And yes, there are 20 packs out there.
Wal-Mart
Amazon
Office Depot seems to only sell the 24 packs. For $12.99. 3 years ago I was stocking soda for our soda machine and the 24 pack cases were $6.99, sometimes $4.99 on sale. Wal-mart sells the 20 pack cases for $6.48, which at first makes you think the price of a case of soda has gone down, until you see that it went down in price by 8% and down in quantity by 20%.
If you are not allowed to question your government then the government has answered your question.
No, I asked for raises several times a year, and was always told lies and delay tactics.
you're still there, proof positive
I am? Could have fooled me.
If you are not allowed to question your government then the government has answered your question.
He ran to management and dropped a dime -- "Perlface" is making more than me and he just got his bachelors.... So he got a raise that management didn't think he deserved. And I got a talking to.
I guess the problem in my case was that management was just too chicken shit to tell him "you aren't worth it bro."
However, if we had lock step salaries based on credentials and experience I would have been making less than the less productive Masters dude, which would have sucked as well.
I work for a state university and as part of the state government, our salaries are subject to open records laws.
The student newspaper publishes an entire section every year listing the pay of all ~10,000 employees.
Keep salary info private? That edition has the best reading of the year!
If your employer/manager implies otherwise, or discriminates against you in any way for discussing compensation, they are in legal hot water.
In practice, sharing your salary in personally identifiable way is probably not beneficial for your career. Coworkers who earn less are likely to be resentful, and those who earn more may feel you must be somehow inferior. Sites like glassdoor are probably the best balance of transparency and privacy.
Capitalism has several logical impossibilities embedded in it that don't make sense to anyone but an economist, aside from "perfect information" we also have invalid assumptions like "rational actors" and "infinite growth".
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
unhindered economcs, low cost of entry, perfect information and rational actors make up free market.
Without information, nobody can make rational decisions - how can one choose to, say, buy some item from vendor A if he does not know what the prices are at vendor B - Z?
Many prices are open in public. If I want to know the prices my competitor offers, I just look up his price sheet. But for employees, appearently having a public price list is frowned upon, which gives employers an unfair advantage in the negotiation. Differently than the employee, the employer has perfect information, he knows how much he pays every employee. And thus the power in salary negotiation is very loopsided, as the employee has much less information about the market and the competition than the employer has. Thus salary negotiations in most cases don't happen in a free market environment.
Price information is vital, no doubt, but why would it have to be 'perfect'? Surely the market is 'free' if you are voluntarily choosing to purchase something that someone else is voluntarily offering; regardless of whether you get an absolute 'best price' or not. Otherwise, you could say that a 'freedom to choose' doesn't exist in reality because we don't have perfect knowledge of anything. Is that a fair standard, or a ludicrous one?
i'm glad that i'm not on that list.
now we need to go OSS in diesel cars
... how much does Anonymous Coward make?
now we need to go OSS in diesel cars
But, but.. SOCIALISM!
I stand corrected lol :D
Requiem for the American Dream
"Perfect information" is the idealized model. As with any idealized model, economics or otherwise(trajectories with respect to a single point mass in absence of friction, ideal gasses, etc.) it sacrifices real-world attainability for substantial convenience in in building and analyzing the model.
Once you have the idealized model, you have something with which to compare real world outcomes and a basis for studying how and why they deviate from the idealized version. Is it barriers to entry? Asymmetric information? Bounded rationality on the part of some or all actors? That's where the economists who grovel through data come in.
In this case, the point isn't that perfect information is expected of real-world economic happenings; perfect information is not possible in practice. However, 'sharing salary data' is an absolutely textbook example of something that would move the situation from 'very imperfect data' to 'closer to perfect data'. It also likely reduces the asymmetry of information(HQ already knew all the salaries, and possibly some at competing companies as well; these employees now have better information and information that is closer to parity with the actor they are negotiating with).
The purpose of idealized models is not to a deliberately unanswerable demand "If it isn't a 'Free Market' the market isn't free!"; but to act as a simplified analytical tool that allows you to focus more clearly on the aspects of the real market that are most or least like their ideal counterparts and tease out how the non-ideal behavior changes the outcomes.
Price information is vital, no doubt, but why would it have to be 'perfect'? Surely the market is 'free' if you are voluntarily choosing to purchase something that someone else is voluntarily offering; regardless of whether you get an absolute 'best price' or not. Otherwise, you could say that a 'freedom to choose' doesn't exist in reality because we don't have perfect knowledge of anything. Is that a fair standard, or a ludicrous one?
If information is imperfect, some people can profit by it without doing any economically productive work, which is an inefficiency.
This is why there are laws against insider trading, as obviously a stockbroker is going to have an advantage over a random member of the public otherwise in the real world where information is not perfect..
To have a right to do a thing is not at all the same as to be right in doing it
I work in the public sector and it is exactly like that. There are "pay grades" based on job title. Typically there are 3 pay grades within a department: management, supervisor, and peon.... By rate of pay some the management are peons. I WARN YOU FROM MY OWN EXPERIENCE: NEVER GO INTO PUBLIC SECTOR WORK.
In the public sector you sacrifice some things (such as high pay) but gain job stability, reasonable treatment by employers, excellent pensions, relatively generous holiday entitlement, and so on.
Of course, in the UK at least, the idea is to get rid of all these benefits and so either literally or effectively privatise everything.
To have a right to do a thing is not at all the same as to be right in doing it
A free market comes with the notion of a price equilibrium. Faster information means faster equilibrium, less room for inefficiencies.
Of course labor market is regulater by government so it's not really a free market. But witholding information from sellers only hurts a free market, as a whole. This makes it effectively a buyers market, which would behave closer to an oligopsony (https://en.wikipedia.org/wiki/Oligopsony). That's inefficient for the market as a whole.
The reason you're seeing new packaging with slightly smaller sizes isn't some conspiracy to help the government cover up inflation (why?), but because of an opposite fact: Wal-Mart has gone seriously into groceries lately and is treating its suppliers the same way it treats non-grocery suppliers. It expects businesses to sell to it at a loss.
Problem is that margins for grocery suppliers are already razor thin. So they're trying to match Wal-mart's price demands by reducing the cost of each product, which, in this case, means changing the quantities per package.
Usually, though not always, the strange quantities do not make their way into real supermarkets like Publix. But occasionally they do - sometimes it's easier to just sell one product, and you notice, and you think it's a conspiracy.
Inflation by any real measure is static or going down. A gallon of milk cost around $4.20 six months ago. It's approx $3.50 here now. A gallon of concentrated orange juice was $5 six months ago, now it's $4 (and I'm not talking sale prices.)
You don't notice these things because you never notice when things go down in price as much as when they go up. When things go up you worry about whether you can afford to continue eating what you eat. When they go down, you think "Oh, that's nice" and carry on.
You are not alone. This is not normal. None of this is normal.
First assume the cow is a perfect sphere....
That's economics today.
Cheap storage VM.
I was curious about the 'official' inflation rate and put it (from the Fed) against the Big Mac Index; in my findings for the past 5 years the Big Mac Index indicates that the 'official inflation rate' is 20% lower than what the Big Mac Index (used to compare international currencies) indicates.
calling anything vaguely related to money that displeases you 'socialistic' is dumb beyond words.
The poster did no such thing.
Um...yes he did. Emphasis mine:
And if to you the rest of the world is limited to the USA, you might be right... A good portion of the western world is actually more socialist than we are.
Lastly, sharing bonus and salary information is the way I ensure that my employer wishes to stay competitive in all aspects of what they do. Not just sharing that information with other employees, but using sites like salary.com to get a "temperature" of where my wages fall in line with other people who have similar Education/Experience, which when review times come up I always bring a copy of reports from several such sites, as well as the public financial numbers of the company, to the negotiation table. So far, this has served me and my bosses well in keeping my salary at a level that's comfortable and competitive for everyone.
If only...
I've done private, public, and non-profit work, and I've done consulting work.
1. Private pays good, often, but if varies from industry to industry and boss to boss. It's also impossible to really compare pay between different offers because there is such a huge variance in benefits (another number it's almost impossible to get before you start). You might get a ballpark number from the interviewer, only to find out it is for single coverage, and you need family. I've seen variances in the 15% to 20% of salary.
2. public lower pay, little room to advance, no respect. There are alot of people working incredibly hard, and IMHO, no more slackers then you see at any large company. I do see a greater tendency towards fiefdoms. Job stability can be better. Benefits are largly the same as other industries, maybe a 7.5 hour day or a bit better pto.
3. non-profit Serious cronyism issues, alot of waste (in established non-profitss), low pay, no advancement. You might get to make a difference in the world (probably not).
4. consulting Your job makes money for your bosses, so pay is better. Otherwise, the same. Often there is less stability, but not always.
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You don't fix this kind of problem (perverse market incentives) by adding another layer to 'correct' for the results. You fix this kind of problem by addressing the underlying incentives in some fashion.
The underlying incentive here is that there's a benefit to keeping salary information private. (Whether that benefit is merely perceived or real is irrelevant.) One obvious solution to this is to have the SEC require that all salaries and compensation data at publicly listed companies be made public, similar to how all government salary data is public. Public companies already have to run open books anyway. This just extends that a bit.
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Hey thanks for the well written and insightful reply! I can see the value of an idealized model as a way of looking at the effects of extreme variations. (like your absence of friction example) I misinterpreted your post to mean an achievable ideal rather than a model used for analytic purposes. (and subsequently assumed your response to be a form of mockery :))
The inflation numbers you see everywhere are a lie, or at least so oversimplified that they might as well be a lie.
http://www.businessinsider.com...
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It doesn't "have" to be perfect to be a working market. It just has to be perfect in order to be a completely idealized perfectly competitive free market on paper. No markets live up to the perfectly idealized theory, but they generally work. They just work less well as you move away from that ideal state. "I don't know what my competitor whill charge tomorrow" is a slight deviation from perfect information, but it's not really a big deal. "Nobody knows what anybody else is charging," is a major deviation that causes real problems.
It's a problem that applies really well to the medical market as well: You don't know nearly as well as your doctor what the actual value of his services are. You also often don't know what he'll charge you until after you've "bought" his services. And you sure as hell don't have a list of what other doctors would charge you. The end result is that the market is a total mess. Every step away from that problem and toward more perfect information (clearly published prices, more educated consumers, etc.) will improve outcomes, even if we never get to true "perfect information."
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
... also tells people not to share salary information. Admittedly not going to be in the same range as Google, but still ...
Just last year Wal-mart finally committed to raise all their wages to over $10/hr - by next year, not immediately. But still, next year that cartpusher who helps you with your groceries will be making at least $10/hr.
My pleasure. I'm always glad to see a discussion take a turn for the better rather than just sliding off the rails. Unfortunately, it seems as though the value of known-inaccurate simplified models is often enough poorly understood that some people treat them as "Haha, your model doesn't happen in real life, therefore Economics Refuted!" and others treat them as though their results can actually be trusted when talking about the real-world situations that they are intended to help analyze.
In this case, perfect information is obviously not happening(if nothing else, you'd be crowned God-Emperor of HR for all eternity if you actually found a way of objectively ranking an employee's expertise with enough precision to justify the difference between their salary and the category average down to the last dollar, or even the nearest $10k in a lot of cases); but it does seem like a pretty decent example of how a situation goes from being substantially not-'free-market'(information is both imperfect and asymmetric, with Google knowing all the salaries and each employee knowing only their salary) to one that is markedly closer to 'free market'(Google knows all the salaries, each employee knows at least a fair number of salaries; and is negotiating from a position of much better price information).
I admit that my initial post was pretty snippy; I get annoyed at the cries of "SOCIALISM!!!", especially now that the Cold War is over, all the 'communist' states have either collapsed or turned into crony-capitalist states of various flavors; and the closest thing you can find to 'socialism' is capitalist countries with comparatively cushy social safety nets; and whoever the AC was pushed my buttons.
That specific annoyance aside, though, I'm actually rather fascinated by how useful(across a wide variety of disciplines) models that we know are false can be, despite their falsehood. They are wrong; but by being wrong in well defined ways that are amenable to (relatively) simple analysis they can be such a good jumping off point for examining the real world and figuring out how it must be different in order to produce the results you see.
But by the iPad Gen 1 index, inflation is way down. By the gold index, we're in deflation. By the California water index, inflation is out of control. But those aren't really indexes. They're just prices. The BLS puts a *ton* of effort into creating an index of what people actually buy that's comparable from year to year. A single price randomly sampled just won't do it. If you ask the average American, they seem to think they spend 95% of their income on gasoline and milk. But they don't. They spend a moderate percentage of their income on gas and hardly any of it on milk. They probably don't remember the 1/10th of a refrigerator they "bought" this year due to depreciation, for example.
The reality is that the BLS numbers match up well with the independent billion price index and with inflation expectations built into the financial markets. The odds that shadowstats or some other bogus index is the "real" index are slim to none. If we were really getting hammered at the the rates that, say, shadowstats, would have us believe, we'd all be destitute and we'd have noticed at least some captial flows following the money.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
Take a look at the BLS data instead of sampling single data points. Like most people, your estimate of inflation is based on your gut and not on real data. Think about it this way: Assuming you're spot-on about soda and the price is climbing rapidly, what percentage of the average American household income goes to buying soda? How would even a small change in the price of some other good affect the usefulness of that data point?
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
All salaries are public in the state of Montana. Any state employee's salary can be seen on the checkbook page by employee name or agency. So what's the big deal?
I never said that the Big Mac Index was the be-all end-all of indices; however, it is obvious then that the metrics in the index are important, and assuming Big Brother (the government) knows or cares best is an example of passive gullibility. The Big Mac Index was much more conformant to the 'official' inflation index over five years prior -- only in the last five years has the Big Mac Index diverged so significantly; perhaps as you indicate the iPad 1 is an important part of their metric that helps them paint a rosey picture of inflation?
All the media fuzz around about that spreadsheet, but the real interesting and relevant information is always missing: it's the salary distribution (e.g, a graph that shows the salary range on the x axis, say grouped by 1000 dollar steps, and the frequency of salaries within that group on the y axis... then more detailed data by department or task as well as other factors... so one could have an actual idea of how much google pays and what factors might influence the pay. So where can i get either that data (can be anonymized, i don't care about the names)... or, if not available.... where can i download the spreadsheet?
There's a simple reason for that: The price of a Big Mac is probably driven mostly by volatile inputs like food and energy. Food an energy are only a part of the overall inflation picture, and they're generally not leading indicators of long term trends. There are two key CPI numbers: headline and core. Core removes volatile components like food and energy because they tend not to be built into long-term inflation expectations. When headline and core diverge significantly, the divergence generally goes away in the near future, and it generally goes away when the headline number moves back toward the core number, not the other way around.
Long term, inflation is driven mostly by expectations and the interaction between expectations and wages. Spikes or drops in the price of oil or beef tend to revert to historical norms, so while they make for interesting charts in the news, they're not really all that useful for long-run predictions because they don't really provide steady enough "feedback" to feed into slower moving prices like wages. The divergence between the Big Mac index and our other inflation metrics is likely driven by that phenomenon rather than an actual failure of the broader metrics.
Anyway, it's not a matter of "assuming" the BLS knows best. You'll find that people who actually study this stuff and use the data think they put out a very useful set of indices and have very good reasons to ignore outliers like the Big Mac index. The BLS basket of goods is very broad, well analyzed and completely public. Every quarter we hear the big headline about something like, "Chicken prices spiraling out of control! Inflation to come!" Not unless the public at large *really* eats tons and tons of chicken and the trend continues for some time. There are other cross-checks that are pretty easy to do. For example, if the Big Mac Index was truly reflective of reality, we'd be seeing massive capital flight from the US to foreign markets with better inflation numbers. If you know the dollar is losing 10% in inflation every year, just sell your dollar-denominated assets, buy Japanese bonds with yen and enjoy your nearly risk free ~12% real return in dollars. Either the big money (who are presumably the puppet masters driving this whole scam) is too dumb to do this or that's really not how the numbers work out. Either that or all currencies everywhere are inflating at roughly the same rate without feeding back into wages anywhere, but that would be a really interesting macroeconomic state of affairs.
An interesting anagram of "BANACH TARSKI" is "BANACH TARSKI BANACH TARSKI"
You are totally missing out on an opportunity to lord your success over your peers. You should feel free to call them minions or vassals; Also, I whole-heartedly recommend using the salary information in your next meeting. "Well, George, from the look of things I make almost twice what you do. Apparently no one who matters actually cares what you think, so STFU."
Winning friends and influencing people through transparency...
out loud. ;)
And thus the power in salary negotiation is very loopsided, as the employee has much less information about the market and the competition than the employer has. Thus salary negotiations in most cases don't happen in a free market environment.
Why do you think the employee has much less information about the market and competition? If you work with an agency they'll tell you exactly what's going on in the market, salary ranges, number of open positions versus available talent, etc. For example, in Chicago right now there's a shortage of front-end developers and companies are having to show them the money since they get multiple job offers.
Salary negotiations happen when the company really wants you and knows that you have other options. Many employees under-sell themselves, but it is true that you can't negotiate (effectively) unless you're willing to walk away.
If you've got unique skills and aren't simply a cog in the machine, then you should be asking for about 20% more than what you'll take. Good employers will work with you and I would avoid the ones that aren't willing to negotiate. Never take the first offer.
calling anything vaguely related to money that displeases you 'socialistic' is dumb beyond words.
The poster did no such thing.
Um...yes he did. Emphasis mine:
No he didn't. Emphasis mine.
lucm, indeed.
since you believe that the public interest is yours to exploit.
I hope people post your salary on this thread.
/. -- the Free Republic of technology.
and there is strong evidence that dynamic is in play... then it's good enough for the help too.
Curroption widely distributed tends to benefit the broader public interest more than limited corruption.
/. -- the Free Republic of technology.
Since, in this day and age, labor is less and less required and makes less and less sense as a basis for distributing basic human needs, the only real purpose it serves is to "keep the working-class poor", as Arthur Young put it. So why are we playing along again?
/. -- the Free Republic of technology.
Catch-22 goes both ways.
/. -- the Free Republic of technology.
Well, good. What kind of desperate tool are you that would want to? Do enough and go home, and stop racing one another to the bottom, instead of conspiring with management to get far less than what you should have just because you need to grandstand.
Get over yourself. For real.
/. -- the Free Republic of technology.
If you are already an employee and negotiating for a raise, you don't have an agency. But your employer still has perfect information.
Same story in Finland:
they say, a cup of coffee was something around 1.5-2 Finnish marks (before switch to euro), now it's at least 2€ (http://keskustelu.suomi24.fi/t/10766202/mitahan-se-kahvikupponen).
5-6 times increase...