Lion of the Blogosphere

It will soon be illegal for employers in NYC to ask about salary history

Reported at the National Law Review:

New York City Mayor Bill de Blasio has signed into law a bill that will make it unlawful for private employers to inquire into or rely upon job applicants’ wage history during the hiring process, with limited exception. The law will take effect on October 31, 2017.

As we previously reported, the law prohibits employers, employment agencies, and their agents from inquiring about an applicant’s salary history, and/or relying on an applicant’s salary history in determining the salary, benefits or other compensation for that applicant during the hiring process, including as part of the negotiation of a contract.

This law is a great idea.

There cannot be a fair “free market” transaction when there is unequal knowledge between the parties. In the labor markets, the employer knows that salary history of every job applicant, while the applicant knows nothing about anyone else’s salary, not the salaries of other people applying for the job, and not the salaries of people who currently work for the employer.

The result of unequal knowledge is unequal bargaining power which means that value is transferred from the party with the weaker bargaining power to the party with the stronger.

De Blasio said:

It is unacceptable that we’re still fighting for equal pay for equal work. The simple fact is that women and people of color are frequently paid less for the same work as their white, male counterparts.

I wouldn’t assume this law will close any “gaps.” Because it gives everyone better bargaining power, including white males, white males will benefit from it just as much as women and minorities, and the gap will remain.

Despite popular belief that women and minorities are paid less than men for the allegedly same work, I think the opposite is more likely to be true. This new law might increase the gap.

Written by Lion of the Blogosphere

May 5, 2017 at 9:15 pm

Posted in Labor Markets

43 Responses

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  1. I’ve always thought the fairest way to fill a position would be to select five or six of the best applicants and let them bid for the job. I read about this once being done by a firm in Germany but it never seems to have caught on.

    No, better to go through rigid interview procedures with a fixed list of questions from which a pussified HR says cannot be deviated from, in order to avoid lawsuits. Better to make decisions on the basis of “diversity” considerations. Better to ask candidates how much their beliefs conform to all the latest fashions in PC (as I was once asked).

    And we wonder why the country is in such deep shit.

    sestamibi

    May 5, 2017 at 9:46 pm

    • “And we wonder why the country is in such deep shit”.

      I’m so glad that I’m out of the sh*thole called the UPS (United Prole States).

      JS

      May 5, 2017 at 11:54 pm

      • Are you able to earn a living in your new location?

        Curle

        May 6, 2017 at 10:45 am

      • Yes, I’m telecommuting with an American company and working as a chef assistant part time. My American source income is not taxable in both countries. I recently filed a non-resident Canadian tax form for the money earned as a kitchen helper, where nearly half of it went into taxes between the country and provincial taxes, then claiming foreign taxes paid as a credit on the IRS 1040 form, where I didn’t have to pay anything to Uncle Meriprole. I’m not complaining, because I don’t have to pay a dime to a country, that subsidizes more than half of its population of undesirables.

        JS

        May 6, 2017 at 12:06 pm

    • “select five or six of the best applicants and let them bid for the job”

      That would just create a race to the bottom, especially in the current immigration climate. Bad idea.

      Peterike

      May 6, 2017 at 9:25 am

      • Why is it a bad idea? The bottom might not be all that deep (depending on the job to be filled), and the immigration climate could be fixed if we had enough determination to do so.

        sestamibi

        May 6, 2017 at 10:13 am

      • It’s already happening. Wages have been stagnant for more than a decade and declining. In addition to immigration, automation on its way, including computer programs performing “White Collar” functions, there will be a lack of meaningful work for those unable to think on their own.

        JS

        May 6, 2017 at 11:35 am

    • I’ve always thought the fairest way to fill a position would be to select five or six of the best applicants and let them fight in a gladitorial battle royale with a few wild animals thrown in. I read about this once being done in Germania but it never seems to have caught on.

      Toad

      May 7, 2017 at 6:14 am

  2. The law is dumb, but irrelevant. The HR departments are just trying to screw white collar people out of at most $3k per year with these annoying questions. The jobs are fairly tightly specced in terms of salary.

    In initial screening stages they genuinely are trying to make sure nobody is wasting time. The people doing the initial screening are often fairly stupid. They can’t pick up on the nuances. But they do stop everyone from wasting a lot of time when Mr. $170K is inquiring about a role that can’t pay any more than $135K.

    bobbybobbob

    May 5, 2017 at 9:47 pm

  3. Since when do employers know the salary history of every job applicant? I’ve never been asked that question as a job applicant.

    Hermes

    May 5, 2017 at 9:54 pm

    • You haven’t looked for a job in a while, then.

      Stealth

      May 6, 2017 at 8:16 am

      • So when did this practice become common?

        Hermes

        May 6, 2017 at 11:26 am

      • Potential employers don’t ask about salary history if they already know it.

        J1

        May 6, 2017 at 12:29 pm

    • I’ve never been asked that question as a job applicant.

      Dude, you’re a psychiatrist.

      S.J., Esquire

      May 6, 2017 at 11:53 am

      • Having said that, I agree with you. I can’t believe this is common practice, asking about past salaries.

        S.J., Esquire

        May 6, 2017 at 12:42 pm

      • I didn’t go to medical school straight out of college. I had a different career before.

        Hermes

        May 6, 2017 at 2:12 pm

  4. Interesting. I used to be a headhunter. We ALWAYS demanded from the candidate his current compensation info. Only rarely would he refuse to inform us. Don’t know how it will turn out. Most likely offer/bid/reject, offer/bid/reject, offer/bid/reject “OK m****r fu***r this is our last bid, accept the offer, counteroffer or walk.” Sounds like the headhunter’s job will be a little bit more fun, at least.

    Is it illegal yet in NYC for an employer to ask about SAT scores?

    Daniel

    May 5, 2017 at 10:35 pm

  5. In NYC if you own a three family house (and there are lots of these) it is illegal for the owner to refuse to rent to anyone covered as a protected class under US civil rights legislation and court decisions, and then some. You cannot legally refuse to rent to gays, Muslims or smelly immigrants who cook smelly food and others such. This is really intrusive. Deeply offends the sense that a man’s home is his castle.

    Daniel

    May 5, 2017 at 10:41 pm

  6. First, nowadays you get a lot of salary information about your peers, especially in jobs that are common. See glassdoor. You also get feedback on companies, especially the big ones.

    Second, this is bad and will hurt companies because pay is a proxy of performance, and you can easily figure out the candidate’s performance at the previous jobs. A candidate may now fake it and then months in you figure out you really hired the wrong person.

    Third, it’s stupid because it has nothing to do with any gaps.

    Zack

    May 5, 2017 at 11:17 pm

  7. Salaries have been declining ever since the beginning of the 21st century. Now that we have a glut or a post scarcity of workers, I don’t find any relevance to any of this. The employer still has the upper hand when it comes to pay. Prestigious companies will only hire the best of the White candidates. Proles need not apply.

    JS

    May 6, 2017 at 12:00 am

    • Salaries declined much more due to open borders than technology. If we kicked out 25% of the population in America that was foreign 1st/2nd gen ilegall, you’d see a massive economic upturn.

      The Philosopher

      May 7, 2017 at 8:29 am

      • Trump and his henchmen will not kick out anyone deemed as legal.

        America has evolved into a flea market.

        JS

        May 7, 2017 at 9:28 am

    • This technologeeeeee canard is retarded. Weve had technologeeee for hundreds of years. Technology doesn’t kill workers, it shifts them. Aspergers people say technologiiiii can make sex doll wives too.

      Its autistic.

      Open borders is a far far worse problem.

      The Philosopher

      May 7, 2017 at 8:30 am

      • Sexbots could happen.

        I can certainly see computer AI become so powerful within the next 100 years that it can mimic a human personality. But I’m not so sure about a robot body that would look perfectly human.

  8. I am not understanding this. Do they mean they get the information from the previous employer or are these salaries self-reported by the employee?

    map

    May 6, 2017 at 12:03 am

    • I am not understanding this. Do they mean they get the information from the previous employer or are these salaries self-reported by the employee?

      Furthermore, this is like asset forfeiture. When it affects minorities, suddenly it’s an issue.

      map

      May 6, 2017 at 12:04 am

  9. Symmetry of information is a good thing, but the less information everyone has, the less efficient things are apt to be in general. People will find a way.

    Peregrino Nuzkwamia

    May 6, 2017 at 12:19 am

  10. As usual, Leftists get a bead on a kernel of truth but totally screw up the conclusions.

    It *is* true that a free market for employees is a lie because of unequal bargaining power that is inherent in all employer/employee relations. It *is* true that workers are paid less than they are worth; and if possible, much less. You might even say they are exploited, by definition. That’s why Unions and controlling the supply of labor are important. You might say that Unions are corrupt. Well, you’d be right. But management is *also* corrupt. The Union is a mob that is (theoretically) on the worker’s side.

    But of course, DeBlackio has to take all these salient points and conclude that women and NAMs are getting screwed; which is the total opposite of the truth.

    Food for thought “The employment contract is a legal fiction in that it recognises human beings juridically as mere tools or inputs by abdicating responsibility and self-determination, which the critics argue are inalienable. The contractarian argument is unassailable all the time it is accepted that abilities can ‘acquire’ an external relation to an individual, and can be treated as if they were property. To treat abilities in this manner is also implicitly to accept that the ‘exchange’ between employer and worker is like any other exchange of material property . . . The answer to the question of how property in the person can be contracted out is that no such procedure is possible. Labour power, capacities or services, cannot be separated from the person of the worker like pieces of property.”

    fakeemail

    May 6, 2017 at 12:49 am

  11. I’m not sure why anyone would be opposed to this. It’s really none of your previous employers’ business what you have made in the past. I’ve had precisely one interviewer ask me that, and not coincidentally the interviewer was perhaps the most socially inept I’ve ever seen. This a good move, my only objection with it being rolled out nationwide would be that it fuels the HR department with ever more regulation on the interview process.

    (Interviews are a terrible way to select the best candidate for a position. And there is too much room for HR to butt their nose in on things they have no clue about.)

    Panther of the Blogocube

    May 6, 2017 at 2:19 am

    • ” It’s really none of your previous employers’ business what you have made in the past. I’ve had precisely one interviewer ask me that”

      Interesting. I have never NOT been asked this. Every job I’ve applied to asks what is your current salary and what are you asking for.

      I think a smarter law would be to require companies to offer you a salary before you ask for what you want. This way you can’t mistakenly seriously under bid what they may have been willing to pay.

      Peterike

      May 6, 2017 at 9:29 am

      • As a prospective employee, if they let you give them a ballpark figure of what you’re looking for, then you have a lot of power. Psychological anchoring is real, and once you give a figure you set the framework of the negotiation. This is only a negative if you’re not sure what you’re worth (increasingly easier to find out if you use sites like Glassdoor).

        Panther of the Blogocube

        May 6, 2017 at 1:45 pm

  12. Another big difference in bargaining power is time. I saw that in Florida, a person got a maximum of 1000$ benefit a month during 3 months. In France the maximum is set in 7000$ a months during 24 months (730 days) + all social benetifs paid including retirement contribution wich represents 50% on top of this amount.
    It used to be 36 months. If you’re over 50, you still get 36 months and it can be more in some circunstances.

    So an executive who is fired has a lot of time and absolutely no duties except now a small formular to send every month wich takes 10 minutes a day work to keep current.

    Bruno from Paris

    May 6, 2017 at 5:30 am

  13. “There cannot be a fair “free market” transaction when there is unequal knowledge between the parties.”

    This is why consumer protection laws require businesses to physically post prices. For whatever reason the noncompliance of the medical profession is ignored by state governments.

    Dsgntd_plyr

    May 6, 2017 at 6:42 am

    • There has long been a law requiring art galleries in New York to post prices. Nonetheless, serious galleries rarely do. They will hand you a price list at the desk if you ask, but that doesn’t prevent them from sizing up a customer before giving them a list. (To be fair, often all the work has been pre-sold to known collectors, so none of it could be purchased by a walk-in anyway.)

      Anthony

      May 6, 2017 at 10:24 am

  14. I am pretty confident this law will increase the wage gap between men and women. Most of the wage gap results from the fact that men face a lot more social pressure to make money than women and are willing to take risks, work more demanding jobs, etc. to get it. So if you give all workers an advantage, men will exploit that advantage more aggressively.

    There does exist some actual sex discrimination in wages, but most of it goes to the benefit of attractive women in their 20s and early 30s. A lot of people are willing to pay a premium to have some young hottie working for them.

    fortaleza84

    May 6, 2017 at 7:40 am

  15. This will only further help people with elite credentials. A high salary is one of the few signals a non-elite hard working schlub can bring to the table. That and job title, but the ‘proof’ backing a job title is usually a corresponding salary.

    Curle

    May 6, 2017 at 10:31 am

  16. BTW- I’m interested in your thoughts on racism as word, social force, historicist prophecy, psychological construct, shaming device, bit of brilliant propaganda, whatever. I fully understand that HBD invalidates some of its claims, but how did we ever come about with this hobbyhorse? There’s darn little on the inter webs formally critiquing anti-racism. Almost seems like something Bernays would have dreamed up.

    Curle

    May 6, 2017 at 10:40 am

  17. How is this law going to work anyway? Supposed you are being paid $100,000 a year, you don’t tell your new employer that, and they offer you $90k. Are you allowed to then tell them that you are currently making $100k and therefore they will need to offer more money? And if the applicant is allowed to volunteer his current salary, what’s to stop employers from just making lowball offers with the expectation that the applicant will volunteer his salary in response?

    fortaleza84

    May 6, 2017 at 11:20 am

    • Nothing prevents the applicant from revealing his salary, just as nothing prevents a pregnant woman from revealing that she’s pregnant. It’s the employer who is not allowed to ask the questions.

      • Bill de Ballsio subconsciously thinks blacks and Hispanics earn less and therefore it allows prospective employers to low ball them. Given the fact, that most young White people who live in NYC, especially Manhattan have a decent paying job or they are partly subsidized by someone in their family, it becomes a moot issue for them.

        JS

        May 6, 2017 at 12:18 pm

  18. Legally, can a prospective employer ask a previous employer about your salary history?

    If not, why can’t you just lie and give them a figure that you think is reasonable for the available position?

    Cognitive Miser

    May 6, 2017 at 2:41 pm

  19. “It is unacceptable that we’re still fighting for equal pay for equal work. The simple fact is that women and people of color are frequently paid less for the same work as their white, male counterparts.”

    No one seems bothered that there are lines of work where women are paid more than men to “do the same work:” porno, stripping, bartending…

    Gary Moe

    May 6, 2017 at 3:02 pm

    • Institutional privilege is vastly in the favor of women and minorities when it comes to getting highly paid positions. If you show up as a white man you are a dime a dozen and can only do the job for which you have been hired. However if you are ‘diverse’ you bring social proof for the company which increases its status in a way that merely performing its business well can’t.

      Like Lion, I very strongly suspect that if you were able to quantitatively compare pay to qualifications, these groups are paid MORE than white men. It would be interesting to see an analysis of IQ & sex/race by income breakdown, but I’m skeptical such a data set exists.

      Panther of the Blogocube

      May 9, 2017 at 3:38 am


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