Perhaps the biggest fallacy of the law in the U.S. is the presumption of equal bargaining power between employers and employees.  This is even more so in the context of a job search.  Although there are some job seekers who may already be employed in a highly-paid position and are looking for a change, many more job seekers are either un- or underemployed.  Job seekers who have been unemployed for a long time may be looking at decimated savings and retirement–and possibly looming foreclosure, eviction and homelessness–which further exacerbates the power imbalance.

Anyone who is looking for a job has no doubt been apprised by all the advice online about not bringing up the salary question.  We are instructed to focus solely on our skills and what we can do for the employer.  Indeed, this advice sometimes even exhorts us to NOT focus on the past (including our salary) because we may be looking at an entirely different position or industry.  However, what frequently happens is that the employer will bring up the salary question first. Nearly EVERY job search advice source recommends stalling and deflecting this question as long as possible so you can “sell” them on you.  Alternately, you have already done your research on job aggregator sites (salary.com, payscale.com, glassdoor.com, indeed.com), so you can truthfully give some answer along the lines of “based on my research, the salary range for jobs such as this, in this area, is…” .

One would hope that the employer has already budgeted something for this position.  Sure, there might be some “wiggle room” for negotiation, but–with much greater access to industry data than you have– you would think a potential employer already knows what they are going to pay when they created the position.   There are several reasons why employers ask this question–and ALL of them create potential downsides to the candidate.

• They are hoping to get the candidates to bid against each other so they can hire the person who will work the cheapest.  Persons who are desperate for a job may be tempted to underbid.  Unfortunately, even if you are hired, this new low-ball salary now becomes part of your career history, which makes it harder to get paid more later.  Alternatively, the low-ball answer can backfire, and the employer will question why you are lowering your standards.
• Even if you throw out a range that is appropriate based on your research, the employer may be looking to eliminate candidates (particularly if there are many applicants) by arbitrarily cutting off those who are “too expensive.”   The fact that you have done your research itself may be threatening, because you are viewed as someone who knows the “market” for your skills and will assert your own worth.

The salary question can take the form of either “what is your current salary” or “what are your expectations.”  Many job seekers know that they should avoid or deflect the expectations question, but may think that the current salary question is more innocuous.  As a practical matter, the job seeker has probably already (per the job application) given the employer permission to check employment references, and so the employer can easily get this information from elsewhere.  But the salary issue may come up before you even get to the interview.  For example, what do you do about online application processes that require you to fill in salary information to even apply through their system?

In my own case, I tend to just pass over these systems.  I ran my own business for over ten years, and not only did my income fluctuate, I would have to consult (now unavailable) tax records to know for sure how much income was attributed to the business versus how much I paid myself.  Since any form of misinformation during the process is cause for disqualification, I would rather not attempt to “guess.”  Indeed, at least one headhunter  advises job seekers to either find a way to work around the forms or walk away  from these deals, because they are obviously looking to low-ball candidates.

On August 1st of this year (2016), Massachusetts passed a law requiring employers to state a compensation figure upfront and making it illegal to require a candidate’s salary history (although it can be disclosed voluntarily).  The rationale behind this legislation is that basing salary offers on past history is serving to perpetuate the gender pay gap. With this new law, Massachusetts joins 12 other states that make it illegal for employers to prohibit salary discussions among employees. The down side is that this law does not become effective until July of 2018.

The gender pay equity advocates who supported this law say it will benefit all workers, not just women, and it is easy to see why.  The next question becomes “why not” in more states, or even at the federal level?  Among other things, the federal Paycheck Fairness Act would prohibit employer-mandated secrecy with respect to salaries.  Advocates have been pushing for a Paycheck Fairness Act since the late 1990s, which has been repeatedly blocked by congressional Republicans, the U.S. Chamber of Commerce and other business groups.  This suggests that any change might first have to come from the individual states before there is enough momentum to get it through Congress.

Job searches are becoming more and more like endurance marathons.  First, one’s application must make it through byzantine sorting algorithms and overwhelmed HR screeners.  Then there is a series of interviews, usually beginning with a phone interview, followed possibly by a video interview.  If one makes it past these initial screenings to an in-person interview, this may involve substantial travel costs–and sometimes there are multiple interviews at multiple locations.  In addition to interviews, some employers may require online or written tests which must be passed to advance to the next stage.  In essence, job seekers spend a lot of time, effort and resources on a mere possibility of a job, but how are they to determine if the effort is justified if they don’t know how much the job will pay?  Even economists believe that readily available accurate information is necessary in order for free markets to work as intended.  The only conclusion is that employers benefit from this system of perversion and secrecy at the expense of all the rest of us.  Until we get legislation passed like the law in Massachusetts that applies to everyone, most of us are going to continue to be working harder for less.