A True Story

A True Story July 29, 2006

The heated debate in comments to this post reminded me of this:

How rich are you?

(I'm doing quite well myself, thanks. I'm in the Top 6.57 percent worldwide in terms of personal income — provided I get that next paycheck.)

It also reminded me of a story:

My first job out of college was as an intern with … let's just call them The Company.

As an intern, I wasn't a part of the complex salary structure of grade levels and pay scales that governed all actual jobs with The Company, from filing clerk to CEO. As a result, I didn't have any particular stake in the massive, yearlong salary restructuring that took place while I was there.

The Company hired the Hay Group to come in and evaluate its various job levels and pay scales, which involved months of interviews and endless discussion of things like "core responsibilities." Finally, the Hay people came up with a grand plan and everybody in The Company gathered in the cafeteria — the only room large enough to hold us all — to learn about the details and the transition from how things were to how things would come to be.

This was pre-PowerPoint, but there were lots of transparencies on an overhead projector. The gist of the presentation had to do with "midpoints." At every salary level, it was explained, some workers were earning less than the midpoint salary for that level, while other workers were earning more. This was, it was explained, unfair.

Over the next few years, it was further explained, the salary structure would be made more fair by freezing the salaries of those currently earning more than 100 percent of their grade-level midpoint and giving incremental raises to those earning less than the midpoint.

I've simplified this a great deal. The actual presentation took nearly an hour and made all of this sound much more confusing and complicated than it really was, but this was the basic gist.

Finally, stumbling to a conclusion, the CEO reassured us all that thanks to this transition process and the fine contribution of the fine folks from the Hay Group, The Company would have a fairer, more just salary structure in a few short years. Those currently earning more than their midpoints might not enjoy any raises in the next few years, he suggested, but they were hardly in a position to complain, seeing as they had been ding so much better than everyone else up until now.

Then, suddenly, he was done. "Any questions?" he asked.

Awkward pause. Fear and confusion and much shuffling of feet. Then the intern had a question.

I was a bit nervous, in part because I was only 22 and in part because I had just heard what sounded to me like an elaborate scam and thus the only question I could think of was "Did I just hear correctly, that you're proposing a salary freeze on your secretary so you can give yourself a raise?" and that's not an easy question to ask your boss's boss.

So I was a bit nervous, and thus couldn't muster the courage or the clarity to put the question quite so baldly. Instead, nervously, I chose an unfortunately elaborate analogy.

"You've explained that some people's buckets are overflowing," I said. "While other's buckets are only 80 percent full. But that doesn't tell us anything unless we know how big the various buckets are."

A blank stare from the CEO and an awkward silence, after which I'm afraid I repeated the analogy, only this time with cups instead of buckets. More awkward silence.

I panicked and switched gears, disastrously: "Since the new salary structure will be, you've said, perfectly fair and just, is there any reason not to demonstrate this by disclosing everyone's salary publicly?"

Audible gasps throughout the cafeteria and looks of horror as though I had just farted in church. I'd lost the room. The CEO harrumphed about confidentiality of personnel matters and, there being no further questions, the meeting was adjourned.

Over the following year, working from job postings that advertised both "grade levels" and starting salaries, I was able to graph the rapidly accelerating curve of the various "midpoints" and to confirm that, yes, in fact, this process was the elaborate scam I had feared. Top-level executives had largely been judged to be earning less than their "midpoints," and so received generous raises. Their secretaries and support staff had largely been judged to be earning more than their "midpoints," and so faced salary freezes for several years. All in the name of fairness and justice.

From this experience, I learned several lessons:

1. If you ever encounter a consultant from the Hay Group, keep one hand on your wallet and never turn your back.

2. Americans find any public discussion or comparison of income distasteful and grounds for extreme defensiveness. They might be willing to talk publicly about the intimate details of their sex lives or their gastrointestinal functions, but not about their salary.

3. This reluctance to speak transparently about income does not serve most people well, but serves some people very well indeed.

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  • Scorpio

    My ex employer forbade dsicussion of income. I think they reserved the right to fire folks who discussed it.
    A secret pay scale is a guarantee that someone is getting screwed — count on it.

  • Steve

    I’d say ‘B’ was getting screwed..
    Thanks, Duane. I knew there was an obvious joke there…but was too tired last night to figure it out. I needed a laugh today.

  • pharoute

    If wages don’t fall under the big nasty COMMERCE clause of the Constitution, nothing does…

  • ninjanun

    Forgive me my very naive question, but isn’t it bothersome that being in say, the top 1-3 percent of wealthiest people on the planet doesn’t mean that you are actually rich by your own country’s standards, depending on where you live?
    Like I said, it’s a naive question, b/c I don’t know anything about economics.
    But for an example: my husband and I “own” our own house (well, the bank owns most of it, but still), and are in the top 1%. But because we live in Seattle, that’s not really an accurate indication of our wealth. As Duane’s joke (I’m guessing) about his helipad and gargoyles imply, earning $49,000 in a city like Seattle or LA is not the same as earning $49,000 in Podunk, AR (where we’re originally from). I have friends back in the midwest who earn less than us, but on that income can afford a bigger, newer house and send their children to private schools. And I have friends here in Seattle who are making more than us, but because they had to wait a few extra years to pay off student loans (my husband and I both had the great good fortune of attending college in the midwest, where it’s cheaper, AND getting scholarships and work-study and having our parents be able to pay for the rest of our education so that we weren’t saddled with debt right out of the gate) are now not able to afford a house. My husband and I, due to our good credit and no other major loans, were able to afford a dreamy fixer-upper 1959 3-bedroom rambler in a decent (not nice, not affluent, but decent) Seattle suburb for just under $240,000 nearly three years ago. Now? That won’t get you a decent manufactured home in the same area. New houses springing up around here (newer, but not necessarily nicer in quality, and squeezed together on dime-size lots) are advertising “in the low $400’s”, and of course, the closer you get to Seattle proper, the costlier it gets, no matter WHAT the size or condition of the house. A 1-bedroom fixer-upper in Seattle proper would easily be on the market for $500,000 (probably more).
    I guess my concern is for all the people making less than 1% in Seattle. I’m not begrudging anyone who earns more for the lifestyle their income affords them, but it disturbs me that being in the top 10% and living in just about any major metropolitan area in the U.S. means you’re seriously struggling to make ends meet.

  • Journ-O-LST-3

    Someone over at the exile was talking about this (http://www.exile.ru/2003-June-26/feature_story.html ) sort of.
    Ninjanun, I think part of the problem is scale. There are plenty of benifits in America and the rest of the first world that we havn’t talked about yet. We have access to free clean water. For every person who whimpers about the taste/smell/chemicals in their water, someone right now is dying outside of the first world because their water really is dirty. We have infrastructure and security, electricity generaly works we have quite a bit that just does not exist out there.
    Also to bring this into a bit better focus, take an Environmental Footprint test (here’s one: http://www.myfootprint.org/ ). You’ll likely find that the world can’t support 6 billion people living like you do. Even those of us who suffer along in the top 13% of the global money game. The thing is there are limited resources, and for each of us who uses 2.4 earths worth of resources 1.4 people can’t have any.

  • Duane

    I guess my concern is for all the people making less than 1% in Seattle. I’m not begrudging anyone who earns more for the lifestyle their income affords them, but it disturbs me that being in the top 10% and living in just about any major metropolitan area in the U.S. means you’re seriously struggling to make ends meet.
    Comparing incomes across disparate economies is like comparing apples and motorcycles. But as it has been explained to me, if you aren’t dying of malnutrition or being killed by Israelis then you should be grateful for your exceptional luck and want for nothing else.

  • ninjanun@hotmail.com

    Thanks for the link, Journ-O-LST-3. Very eye-opening. I like that they have suggestions for what we can do to change things. What frustrates me, however, is that most of the suggestions for “what you can do individually,” my husband and I are already doing (bike to work, take the bus, eat no meat, recycle, talk to my political representatives) already. And yet I’m only leaving a slightly smaller footprint than other people in my area because of this, which is still way more than the majority of the world. Gah!
    And I AM grateful, Duane. Not a day goes by that I don’t understand that I have it better than the majority of people on this planet. But like I said, it disturbs me that being in the top 10% in this country means you end up having to make choices, which (as per the Wal-Mart discussion) in the long-run, means you’re leaving a bigger footprint, and kind of shooting yourself in the foot. And it disturbs me that the top 1% leave an even bigger footprint, even though they could afford to leave a smaller one (if that makes sense), due to being able to afford more energy-efficient cars, appliances, American-made products, organic foods, etc., all the time. I know there are people in the top 1% who are probably doing all they can to leave as little impact on the planet as possible, but I’m highly suspicious that the majority are even aware that their lifestyle is a threat to others in the long-run (or even right now).
    I know, a big part of it is the “American Lifestyle” that the current Administration seems to want us to believe is our Right, combined with rampant consumerism and the idea that whatever is worth enjoying is worth *owning* (rather than sharing or borrowing). It disturbs me that the American Dream has gone from owning your own home and being able to provide for you family, to being some bloated, giant, blood-sucking gluttonous mosquito that’s consuming more than our fair share of the world’s resources.
    Anyway, I guess I’m just frustrated. :(

  • ninjanun

    Sorry about that!

  • ninjanun

    Hmm, it looks like the first part of my original comment got cut off. I meant to say, “thanks for the link, Journ-O-List-3. Very eye-opening.”
    I encourage everyone to use the link (which I provided, yet it strangely got deleted and went awry) and see your own footprint.
    Mine was slightly less for my area, but still huge overall, compared to the rest of the world. And this is even tho’ my husband and I are doing most of the things suggested for “how to make a difference–individually,” such as not eating meat, taking the bus, biking to work, carpooling, recycling, etc.

  • inge

    re: http://www.myfootprint.org/: I do not get how that works. I got a very small number for transport, although I go most places by motorbike, yet a high one on “services”, though I didn’t notice a single question in that category. And because I closed the window, I can’t get to the FAQ without filling it all out again.

  • Seth

    > You’ll likely find that the world can’t support 6 billion people living like you do.
    Like, this depends on what ‘like’ is like, ya know?
    Seriously, the world can’t support 6 billion people living with the same technologies that we use. But I believe it can easily support that population as we learn to live smarter and change the way we look at problems.
    An example of what I mean by the latter is electric cars. For years everyone “knew” that electric cars would be 100% electric, have limited range and performance, and you would have to plug them in a lot. No wonder nobody but a few fanatics wanted them.
    The Prius changed that. Suddenly hybrid cars had unlimited range, good performance, and most importantly no plugs, but they would still go electric at city speeds. People who would never look at electric cars are suddenly talking to their hybrid car dealership.
    Now some enthusists have put the plug back into the Prius. They want to plug in their car AT HOME (but not on the road). That may eliminate gasoline usage entirely in the city — and can be powered by wind generators! Even conventional plants will be more efficient (and have better exhaust scrubbers) than what you can put on a mobile engine.
    We won’t have gasoline-powered cars in 30 years, but that doesn’t mean we won’t still have cars.
    There’s similar changes occuring across the board. E.g., 20th century water purification facilities were huge monsters that take massive amounts of chemicals. 21st century water purification plants may involve some short pipes with hard UV soruces (to sterilize the water) and a set of membrane filters (to remove the contaminants). In a few short years much of the world will think of a $200 hardened tablet PC that’s powered by a handcrank (15 minutes cranking for 2 hours of use?).

  • Seth

    P.S., this doesn’t absolve us from the responsibility to actually invest the time, money and effort in finding out how to get there from here. Far too many people think it’s acceptable to just sit back and let others do the work.

  • Seth

    I finally figured out why that comparison between minimim wage laws (good) and laws between consensual anal sex (bad) was so offensive.
    Sexual partners approach each other as equals. Not absolute equals, but if there’s a marked inequality between them we start to pay legal attention. That’s why minors can’t legally agree to sex, drunk/stoned individuals can’t legally agree to sex, patients can’t legally agree to sex with their doctor or therapist, etc. (It’s also the secular argument against prostitution, although I find that situation to be far more complex after you take care of the sad cases involving addictions and physical coercion.)
    Now look at minimum wage. I’m an educated person with experience and resources. I’ll always be subordinate in any wage negotiation with an employer, but I’m not powerless since I’ll always have the ability to move on and it costs at least $20k (last I heard) to replace somebody at my level. I don’t need the government’s assistance to ensure a fair wage… and in fact my biggest problem is the government skewing the relationship the other way by manipulating the labor pool.
    But look at the bottom end of the economic ladder. These are people without college-level education and few resources. If their boss tells them to do something, they could easily face immediate homelessness if they refuse. There’s no equality at all in the situation. If we can accept that the government has the right -and duty- to prevent sexual exploitation of minors, then I believe we have to accept that the government has the right -and duty- to prevent the financial exploitation of the most defenseless workers.
    Unfortunately these two items often merge with the most defenseless workers. Illegal immigrants, or skilled HB-1 visa holders who must leave the country within days of being terminated from their job. Far too many people are told to sleep with the boss or they’re fired. Criminal prosecution is a joke if the complaintant has already be deported from the country and both parties know it.

  • Spherical Time

    This article is at least partially related to this topic of conversation. I thought that I’d post it, even if it’s from fark.com.

  • Tom

    “I know everyone would like me to take it to the bitch but honestly, she hardly ever exploits the working class around the house.”
    Don’t worry, Duane, I got it at least.

  • Ismael

    Layton Dallin Ronaldo Jevon Rory <a href="http:…