>> It is bad for negotiation and getting a favourable outcome for yourself
Sooo, your main argument against this is not some privacy concern, but only the perception that it would somehow help your salary negotiation. When relying on a lack of data/information, the only one that gets increased leverage is your employer, not you and your smart argument of "you just don't need to tell the others, boss <wink>".
>> which is how they roll in Norway, and if you dare make more, they'll basically just tax it away
Norway's tax rate is on par with other Nordic countries: high but nothing exceptional, and you get plenty of benefits (basically you get what you paid for). It's not stopping anybody from trying to make it. As a matter of fact they have one of the highest rate of millionaires per inhabitant (close to 200k for 5M).
You can share salary data with your peers if you wish to do so and you think its in your best interest. Norway is largely a socialist society and they accept being heavily taxed and publicly sharing salary data. Taxes are on par with Denmark, Sweeden and maybe Finland. English/US culture is different and more capitalist. It encourages individuals to do better for themselves, it encourages competition, just like in nature.
They have the highest millionaire rate per inhabitant mainly because it doesn't have many inhabitants and it's an oil rich country.
Where the vast vast majority of creatures are either predated or die of hunger.
Arguments that depends on replicating evolution, socially, are either naive or highly morally dubious. Eugenics would, of course, lead to more populations with more 'desirable' traits: healthier and more productive, on average. That doesn't stop it being repugnant. Economic eugenics in the service of higher GDP is no better.
Sometimes I feel that every place with even minimal welfare is bound to be defined a socialist country, eventually. By that logic, Trump could be a fascist, Renzi is a commie, and so on.
I think basic welfare and good free healthcare are basic human rights. But tax-wise, Norway is about as bad as it gets. And I am obviously aware those services need to be paid for, but a lot of it has to do with policy as well.
It's probably a decent tradeoff for the average Norwegian, but not for anyone who wishes to (eventually) live off of investment and/or (semi) passive income.
A lot of these taxes don't serve any purpose (and generate very little revenue) and merely exist to stop or limit certain behaviors. Why are luxury cars taxed a lot? They don't want people to drive a Porsche or an Aston Martin, because some people would feel bad they can't afford those cars. Why is alcohol taxed excessively? They don't want people to drink (too much). Why is there a wealth tax? They don't want people to focus on getting rich. Etc
One simple example is a wealth tax: hard to verify whether people are reporting their true net worth, hard to enforce (takes a lot of manpower to check everything), and it brings in very little. In France, the wealth tax barely covers the cost of enforcing it. That's a policy decision, i.e. we want wealthy people to pay X% of extra tax. But it's not a sane decision.
As a Norwegian that aspires to eventually live off investments and passive income, you do have some salient points. We could probably have a significantly cheaper public sector; hiring for the public sector during the last decade has been ridiculous. Counter-cyclical spending during times of economic crisis should not be performed by hiring people for permanent positions with some of the strongest labor protections in the world; you'll never get rid of the expense when the cycle turns back.
And don't get me started on the wealth tax; it's a good and probably necessary idea in the long-term, but here it's both (1) too high; at 1% p.a. it's in effect an extra 25% capital gains tax on top of the 29% which is taxed directly, and (2) assets that "everyone" own (real estate) are only taxed at 25% of their market value. And debt is deducted at its full value! Buy a million dollar home borrowing $250k, and you pay no wealth tax at all! So you are allowed to be a real estate millionaire (and receive tax-free income on rent from your primary residence), but not a stock fund millionaire.
To everyone's big surprise, real estate has appreciated much faster than other assets (20% in Oslo last year), mostly evening out the post-tax advantage over other assets.
The tax on investment income was recently reduced by three percentage points to make the system more similar to other parts of the EEC, but a multiplicative factor was introduced when calculating the "taxable value" for stocks and funds, in effect increasing the tax by two percentage points. I never quite understood this move.
I am proud of our universal healthcare system and our welfare system -- in effect it's a means-tested basic income system; no one starves or freezes -- but some tax policies feel really oppressive if you are trying to do something ambitious.
Very nice example, and you can clearly see how market distorting the wealth tax is. In a post below you wrote it triggers from $175k, but the value of a property is only counted at 25%.
Purchasing property is essentially a tax avoidance mechanism to avoid the wealth tax on cash, and in turn leads to a massive property bubble (probably because the wealth tax cap is relatively low, and it hits a lot of people / families).
Even if you don't really want to invest in property, it makes sense to do so, because otherwise you'd just be paying wealth tax. Add to that that you can probably lever it up easily (e.g. buy something with 20% down) and.. you get a recipe for disaster at some point.
I wouldn't drive a Porsche or Aston Martin in Norway during winter. I'd drive it in Monte Carlo.
Alcohol is probably taxed because during a six month winter with 16 hours of darkness just about anyone and their mothers would develop chronic alcoholism.
Of course a wealth tax brings very little because anyone wealthy enough would move their assets to other countries with lower wealth taxes. Tax the rich is just an excuse to tax everyone else.
This is literally false. Socialism entails worker ownership of the means of production. Norway is a social democracy, not a Socialist society. It's worth remembering that in Marx's time, Socialism and Communism were synonymous.
It is socialism to the extent that the means of production is in fact largely publicly owned- or rather than owned, the fruits thereof is publicly redistributed via taxation.
This definition would fit nearly all so call capitalist economies too, which shows wr have VERY FEW purely capitalistic as well as purely socialist economies, although thr latter do exist more frequently in history and a few crazy places.
It's actually the amount of state control vs. free market forces that defines if a country/society is more socialist or rather more capitalist. Look at France and the UK for instance.
The US is not such a good example because big companies and lobby groups are actually in control, just like the state is in China.
> It's actually the amount of state control vs. free market forces that defines if a country/society is more socialist or rather more capitalist. Look at France and the UK for instance.
Are you suggesting that the UK is or is not socialist?
Are taxes in general anti-capitalist? Is publishing salaries anti-capitalist? When I think of anti-capitalism, I think of government owned entities, government backed (directly, or via regulation) industries, and things like tariffs. I know Norway qualifies as socialist for other reasons, but i don't see high income taxes as a stand-alone reason. Is that a reasonable argument?
> It encourages individuals to do better for themselves, it encourages competition, just like in nature.
Nature is savage and cruel. I think there are better arguments to be had in favor of capitalism.
>It encourages individuals to do better for themselves, it encourages competition, just like in nature.
Oscar Wilde argued that Socialism is what would push individuals to do better for themselves individually.
Further, if you're interested in the "nature" argument, Russian anarchist philosopher Kropotkin has written about it in The Conquest of Bread and Mutual Aid, in which he dismisses these ad natura arguments.
Yes and so does in capitalism. Some forms of cooperation are having a distribution chain for your products; other forms are called price fixing. The difference is that in capitalism cooperation occurs naturaly while in socialist societies it's largely state regulated.
Is there any evidence for this? Some prominent Socialists would disagree with you, especially anarchist ones, such as Bakunin, Kropotkin and probably even Marx and Engels themselves.
>> When relying on a lack of data/information, the only one that gets increased leverage is your employer, not you and your smart argument of "you just don't need to tell the others, boss <wink>".
This makes no sense. Why wouldn't you be able to figure out how much others are making? There's plenty of data you can gather, online and from talking to people. Just because data is not public doesn't mean no one is willing to share how much they're making.
If I'm making $50k, and I tell a new company I want $100k at a new job, there is no way that will fly if they know you're making $50k. But with opacity on salary, proper arguments and decent negotiating skills that is definitely achievable.
One example: as a consultant, I have (in the past) easily doubled and/or tripled my rate at times, just based on the setting and by negotiating well. That would never work if everything was public. And in the end, the client was extremely happy with the result + I was happy with the (way above average) increased rate.
>> Norway's tax rate is on par with other Nordic countries: high but nothing exceptional, and you get plenty of benefits (basically you get what you paid for). It's not stopping anybody from trying to make it. As a matter of fact they have one of the highest rate of millionaires per inhabitant (close to 200k for 5M).
Perhaps. But that's also because of the problematic real estate bubble in Norway and Oslo. In a country where everything is highly taxed, certain asset classes (in this case real estate) get distorted if they are taxed lower.
Add to that the reserves in their sovereign wealth fund, and you end up with many millionaires.
There's a reason why Tesla was selling a ton of cars in Denmark, and sales plummeted (down from a few hundred to 6 of 8 cars in 6 months?) when they got rid of the tax credit.
Benefits and healthcare are great and important -- I'm not saying you need super low taxes. What I'm saying is, if you don't specifically need to be in Norway to build out your business, e.g. it's something internet based, there are better countries to base yourself.
Norway is a great country to visit though. I (personally) just couldn't live there, because I don't think the model of such a society would work for me. It's great to be able to have a bottle of wine with friends in a restaurant, without having to pay €300 for your meal + drinks in an average restaurant.
I think your prediction of how things would play out is just wrong.
Employers usually have an HR team that is dedicated to knowing what the labor market looks like. They may not know exactly your previous salary, but they keep very up to date tabs on industry trends. They also know exactly how their current human resources are paid.
You know nothing except your past salary. They have more cards than you do.
Public salary means they know your past salary, but it also means you know what they pay their current employees, and can negotiate accordingly.
The only way this is not beneficial to any given employee is if they think they are a huge positive outlier.
edit bc hn limits me if I post like 3 times in short succession:
I don't think you understand the public policy implications of this.
The vast, vast majority of people aren't negotiating 20k increases. And people who are negotiating far more, like CEOs, do fine even with public information out there.
The equation here is one of giving employees more bargaining power over employers. An insignificant proportion of employees currently benefit from secrecy, and many of them aren't even sure they benefit, they just suspect they do.
If it's all "rounding errors", as you say, consider how this alters the dynamics between you and your bosses, not only between you and your peers.
I think your prediction of how things would play out is just wrong.
Employers usually have an HR team that is dedicated to knowing what the labor market looks like. They may not know exactly your previous salary, but they keep very up to date tabs on industry trends. They also know exactly how their current human resources are paid.
Hm? It's correct in my experience. People can get massive raises on the order of 50% or more just by keeping quiet about their past salary.
If they pull some "We need an answer in order to move forward with the job" nonsense on you, tell them your past salary was $1.
Is it hard to believe that the new team's salary fluctuates by as much as $50k solely due to negotiation?
If a company wants someone, and that someone doesn't want to go, negotiation and salary fluctuation is what happens. I think $50k is on the low side of what the disparities could end up being. (See the recent craze of poaching AI talent.)
I'm being hired for my software skills, not my negotiation skills. The fact that negotiation is so important is cargo culting from business-types who benefit from it.
(I happen to be quite savvy at negotiation, but I've seen many shy people exploited because they're not as cocky as me).
More to the point,
1) If my team was hiring a new guy with skills indistinct from mine for 50k extra, and I found out about it, I'd ask for a raise. If they refused, I'd quit on the spot.
2) If the skills are indeed a whole class above mine, they'll probably have a different title, and it's much less of my concern (I wouldn't call it "a fluctuation among members in my team").
Information may not always make things better, but it always -- no exceptions -- makes a market more efficient.
Moreover, stop focusing on two team members fighting against each other. The big prize here is employees finding out how much their bosses make, especially when it comes to "tightening belt" periods. I don't honestly care if Jeff-next-door is getting 20k extra because he plead for his newborn, but I absolutely care if my salary gets frozen and my boss gets a bonus.
Opponents to salary transparency are basically arguing for an inefficiency that favors higher-ups, preying on the ignorance of less resourceful subordinates.
So what you're saying is that there basically is no room for negotiation, because it would deviate too much from the standard scale? e.g. a company needs someone for X, and will fix pay around €XX,000.
At any big company, you need to make sure they want to hire you first. Once you have done that, pay becomes irrelevant because mentally they have already hired you. It's a rounding error on a budget. And it often is not even their own budget.
You would be surprised at how easy it is to negotiate a €20k salary increase by just saying: I'd love to work here, but we need to figure out a salary range that works for both. And if they lowball you (which they probably will), you just counter and take it from there.
There's another scenario that is becoming more common, especially in the company where I work: Changing countries by changing jobs. The markets are dramatically different so any salary comparison makes no sense. Instead you have to compare level and experience, which is what we should be basing salary decisions on in the first place.
Sooo, your main argument against this is not some privacy concern, but only the perception that it would somehow help your salary negotiation. When relying on a lack of data/information, the only one that gets increased leverage is your employer, not you and your smart argument of "you just don't need to tell the others, boss <wink>".
>> which is how they roll in Norway, and if you dare make more, they'll basically just tax it away
Norway's tax rate is on par with other Nordic countries: high but nothing exceptional, and you get plenty of benefits (basically you get what you paid for). It's not stopping anybody from trying to make it. As a matter of fact they have one of the highest rate of millionaires per inhabitant (close to 200k for 5M).