According to a new study, silence can be beneficial for workers if they reveal their salary history.
According to a study released on Monday by the National Bureau of Economic Research, workers who did not see double-digit salary increases for potential employers achieved better wages than workers who disclosed their previous salaries.
Researchers from the University of Minnesota and the MIT Sloan School of Management have developed an experiment in which nearly 3,000 employers posting job vacancies on an unidentified online job site could not see how much the wage was that previous employers had while applying for a job paid for a period of two weeks.
A separate group of 3,000 employers could see the applicant's salary history.
The experiment showed:
• Employers whose salary history was not shown asked applicants 13% more questions. However, after completing the test, they asked 22% fewer questions than during the test.
• Employees whose salary history was not visible accepted wages of 9%. More of their initial offer compared to workers whose previous wages were known.
• Employers without salary information looked at more applicants, asked applicants more questions about their skills – and were actually more willing to hire employees.
• It also helped people who received lower wages in their previous jobs. Employers who saw no wages in the past hired workers with 13% lower average wages.
The working paper is published as more and more states and cities issue regulations that prohibit employers from asking applicants how much they have paid in the past.
Salary bans have been imposed or enacted in nearly 20 states, and bans have been imposed in some form in another 20 cities – such as New York City Atlanta and New Orleans.
The Greater Philadelphia Chamber of Commerce has sued this city for its 2017 ban, claiming it violates members' right to freedom of expression. The case is pending at the Third Circuit Court of Appeals.
Proponents of the ban on salary expectations say that if employers can ask about a salary, it can unjustifiably lower wages, especially for women who already have a wage gap.
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Last year, the democratically controlled US House of Representatives passed the Paycheck Fairness Act, a measure that includes a federal ban on questions of salary history.
Despite the passage of the bill in the House of Representatives, the prospect of it being passed in the Republican Senate is more difficult.
Mitch McConnell, a Kentucky Republican, Senate Majority Leader, called an earlier version of the law "just another democratic idea that threatens to hurt the very people he claims to help."
An observer from the Heritage Foundation, a conservative think tank, said the law on fairness of salaries would lead to "rigid salary scales" and increased business costs because employers would lack discretion to negotiate salaries.
The researchers for the latest work, Professor Moshe Barach of the University of Minnesota and Professor John Horton of the MIT Sloan School of Management, recognize that the demand for a previous salary may indicate how much a previous employer valued an application.
However, they found – at least in the context of online hiring for short-time work – that "our results suggest that measures that restrict employers' access to remuneration history more or less have the intended effects and benefit those with relatively low wages , with No general reduction in settings. "
Barach told MarketWatch that the paper does not take any specific positions on certain salary prohibition laws, but at least in the specific context of her experiment: “The vast majority of public order concerns are unfounded. … employers can always ask questions. "
However, the study focused only on a small portion of the jobs – publicly available hourly jobs where every applicant could throw his hat in the ring. Employers may have a different approach to long-term pay.
The results of the study on an increase in wages are consistent with previous studies on salary negotiations and the so-called "anchoring effect". Researchers say people tend to put more weight on the first information they pick up – so a hiring manager might wrongly weight on salary history.
A study by the Journal of Applied Social Psychology in 2011 found that people who jokingly offered a large salary offer and thus made a more expensive anchor did more than people who seriously called their salary requirement.
However, if there is no anchor for the salary negotiations, workers may have more leeway to call a higher price.
A 2017 survey of 15,000 people by Payscale.com, where users could compare salaries, found a possible gender bias in the way employers treated applicants who refused to disclose their previous salary.
As a result, women who refused to speak about their salary development earned 1.8% less than women who spoke about the number. However, when men refused to speak about payment, they were 1.2% higher than men who discussed their previous payment.