By Paulina Cachero
Salary, once a taboo topic in the workplace, is now being shared openly in offices and on social media among a younger generation of workers.
Empowered by the tightest labor market in decades and incentivized by skyrocketing inflation, employees are embracing transparency, discussing their pay in the hopes of getting raises for themselves — and their colleagues.
Nearly 42% of Gen Z workers and 40% of millennials have shared their compensation with a coworker or other professional contact, according to a March study of 2,449 American adults conducted for Bankrate by YouGov Plc. That’s significantly higher than Gen Xers (31%) and more than double that of Baby Boomers (19%).
Pay transparency rules have gained traction across the U.S., with laws in New York City and Rhode Island expected to join disclosure requirements in several other states later this year or next. But many younger workers, who have significantly less wealth than their parents had at their age, aren’t willing to wait.
Hannah Goodbar, a 25-year-old programmatic supervisor at an advertising firm in Chicago, said she and her colleagues have always been open with each other about their finances.
In early January, a coworker who was recently promoted said she was offered $10,000 more for the same role Goodbar had held since last year. Goodbar and another colleague waited to receive a similar bump, but by March nothing had changed. HR said they would have to wait for their review toward the end of the year to be considered for a compensation boost, so they began hunting for other jobs.
By early April, Goodbar informed her employers that she had another offer on the table. Within days, the company countered with a $20,000 raise. She accepted the counteroffer, which boosted her salary by 29%.
“I was like, ‘All I wanted was the $10,000, but now you guys have to pay me $20,000 more or else I’m leaving,’” Goodbar said.
Read more: Pay Me More or I Quit: Workers Play Risky Game With Their Bosses
Wage Leverage
Workers are more confident than ever about asking their bosses for more money, according to LinkedIn’s Workforce Confidence Index survey. And for good reason: the number of job openings hit an all-time high in March, with nearly two open jobs for every unemployed person.
The median wage in April grew by 7.2% for people who switched jobs and 5.3% for those who stayed in their roles, according to the Atlanta Fed’s Wage Growth Tracker, which tracks the three-month moving average.
“Inflation right now is really increasing the urgency for younger workers to bring up the conversations,” said Bankrate’s Sarah Foster. “Thanks to the Great Resignation, for the first time in a lot of these younger workers’ lives, they have the leverage to seek out the pay that they want.”
Although current market conditions have given workers an unprecedented amount of leverage, the idea of pay transparency began to gain traction even before the pandemic. Evan Murphy started collaborating with two of his coworkers to secure higher compensation a few years ago.
The 26-year-old said they were all offered starting salaries of $60,000 as new college grads. While it seemed like a good offer at the time, they changed their mind after researching the market rate for engineers with similar experience.
The trio approached their boss to ask for more money, but they started hunting for new jobs when their company failed to give them a raise as promised. Once the three engineers informed their manager that they were all interviewing at other companies that were offering higher pay, Murphy said it “lit a fire” under his employer, which gave them each a $5,000 raise.
“People are generally very frustrated with the status quo, especially younger people who feel like they’ve been through once-in-a-lifetime economic turmoil,” Murphy explained. “If we’re being taken advantage of, then it’s better if we are able to make each other aware of that.”
Online Transparency
Social media and a growing awareness of pay disparities are also encouraging people to speak up.
Josh Buchea, 40, spent much of his teenage years on the internet and is “comfortable” being transparent online. Sharing his salary on Twitter was a natural next step.
In July 2019, Buchea tweeted his compensation history as a software developer after learning about the gender wage gap. His candor prompted a flood of other users to share their salary history in various industries, from tech to design.
Although Buchea was “nervous” about how his employers might respond, he “decided that the reward was worth the risk.”
“I’m a little bitter at the state of the world. I have a lot of student loan debt and my family is having trouble finding a home that we can afford,” he said. “Younger generations are not the kind to go along with the status quo.”
More stories like this are available on bloomberg.com.
