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Money can be a touchy subject for many people. Though salaries and savings are deeply important to most Americans, they are also often taboo topics of conversation. Recently, however, there has been a cultural shift pushing for more salary transparency between coworkers and from employers.
For example, in 2022, New York City passed a law requiring companies to disclose the expected salary range for any public job listings, a marked shift toward pay transparency in the city.
Whether it’s credit card debt or savings account balances, salary isn’t the only money issue people avoid discussing. To explore this further, FinanceBuzz surveyed over 1,200 U.S. adults asking about their personal finances in general, which money topics they feel comfortable sharing with others, and who they’re comfortable sharing that information with.
Key findings
- Only 37% of people with a salary feel that it has kept up with inflation – Even more (41%) believe they are currently underpaid.
- Over half of those surveyed report regularly talking to friends and family about personal finance topics.
- More than one-fifth of employed people (22%) have been discouraged from sharing compensation details by their employer before.
- Only 30% of employed people say they have shared their salary information with coworkers.
- 15% of people have quit a job because they were making less money than coworkers.
Should you share personal finance information with friends and family?
Perhaps surprisingly, the majority of people choose to share personal finance information, at least with the people they are closest with. Fifty-nine percent of people say that they regularly talk about personal finance topics with their friends and family.
At least 50% of people in every generation say they discuss these kinds of topics with others. Gen X is the generation least likely to have these conversations, as just 51% of those in that age group regularly discuss personal finance. In contrast, 68% of Gen Z discuss these topics with friends and family, which is the highest of any generation.
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People are much more likely to confide financial information in a spouse than any other person in their lives. More than half of people, 57%, say they have shared their salary information with their spouse, followed by parents and friends.
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Which money topics are off-limits?
Of course, some pieces of personal financial information are treated with a greater degree of confidentiality than others. More than half of the people surveyed said that a number of topics are off-limits. Sixty percent say that they are unlikely to disclose how much money is in their bank account to a friend, while nearly the same amount (58%) said they keep their credit card debt a secret. Additionally, 54% say they are unlikely to disclose the amount of student loan debt they have, and 52% hide their total retirement savings.
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There is a level of secrecy surrounding salaries that people of all ages maintain. Even among the generation that is most open to comparing salaries, Gen Z, only 50% have actually shared salary data with their coworkers. Still, that is a level of transparency that is higher than workers in previous generations, significantly so when it comes to baby boomers. Seventy-eight percent of people in that generation say they have not shared their salary information with coworkers, a rate 13 percentage points higher than any other generation.
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For some workers, the hesitance to share salary information may be influenced by their employers. Over one-fifth of people (22%) have been encouraged not to share salary details by an employer before. It makes sense for bosses not to want that kind of information sharing — 16% of workers also said they’ve used their knowledge of a coworker’s salary to ask for a raise. Fifteen percent have quit a job because they knew they were being paid less than a coworker, and 10% have shared their salary information to give a coworker leverage when requesting a raise.
Tip
Though employers may not want you to share salary information, it’s important to know that most workers have a right to discuss wages with whomever they choose under federal law. Under the National Labor Relations Act, most workers, in most circumstances, are permitted to discuss their own or others’ salaries with coworkers and are protected from adverse action taken by an employer in retaliation for these conversations.How do you feel about your current salary?
Beyond asking how people feel about sharing personal financial information, we also wanted to see how they feel about their current salary. Just over half of people, 52%, said they feel that they are fairly compensated, while 41% feel that they are underpaid, and 7% feel they are paid too much.
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Across generational lines, there are some interesting differences in how people feel about their paychecks. Millennials are the only generation where less than 50% of people feel they are fairly paid, as only 44% of those in that generation feel they receive fair compensation. They are also the most likely (48%) to feel that they are underpaid.
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While most people do feel they are being paid a fair amount by their employer, that does not mean they are totally satisfied with their compensation, especially in the face of the current economic climate.
With inflation driving up costs for all kinds of products all around the world, paychecks for many people are not stretching as far as they used to. Only 37% of people feel that their salary has kept up with inflation in recent years, meaning that nearly two-thirds (63%) feel that their salary has not been able to keep pace.
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Looking beyond their own personal salaries, respondents also shared how they feel about how much their boss is paid. Less than half of people feel their boss is correctly compensated, while nearly 40% say that they think their boss is overpaid.
Fact
37% of respondents believe their boss makes way too much money.Bottom line
Making conversations about salary and personal finance part of your routine can make the experience more comfortable for everyone. Likewise, improving your overall financial situation can help relieve some of the stress.
- Get a good job that pays well. Look into some of the best jobs available on the market to find a fulfilling role that offers a generous salary.
- Consider a side hustle. Sometimes, multiple streams of income are necessary. Starting one of the best side hustles to supplement your current salary can be a huge help in keeping you afloat financially.
- Pay off any debts weighing you down. Carrying debt can feel shameful, but learning how to pay off debt is a huge accomplishment.
- Bank with confidence to maximize your finances. A good bank can provide customers with a range of options for maximizing their money, so opening an account at one of the best banks for your financial situation can boost your bottom line.
Expert advice
Darren Brooks
Assistant Dean for Strategic Engagement & MBA Program Director
Florida State University
- Should one ever share their salary with coworkers? Why or why not?
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While there are no legal provisions that prohibit someone from sharing their salary information with coworkers, the question that one should ask is — what is the goal I hope to achieve for sharing my salary or asking the salary of a co-worker?
If there are differences, one must be mindful that there may be justifiable factors for pay differences such as experience, certifications, time on the job, etc., that warranted higher compensation for similar work. Additionally, this conversation can backfire and create morale problems if you are more highly paid than others in your work unit, creating additional relationship challenges with your coworkers.
- For anyone who feels their salary hasn't kept up with inflation, how should they make the most of their income?
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Most of us have experienced some downside impact on our purchasing power over the past two years. Two thoughts emerge from this question. First, in the short term, re-evaluate your budget and, where possible, eliminate non-essential items from your spending.
Second, discuss your salary concerns with your supervisor. Many companies are re-evaluating their compensation structures and practices to address issues of inflation on pay. In fact, some private and public firms are adjusting salary structures and pay bands to account for inflation.
Michael Harari, Ph.D.
Associate Professor, College of Business
Florida Atlantic University
- Should one ever share their salary with coworkers? Why or why not?
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It's a personal matter, but I would personally exercise caution. People are very sensitive to issues of fairness in the workplace, and this is especially true with pay, as pay is the primary reason why we work in the first place.
In fact, a prominent theory of employee behavior in the workplace — called equity theory — suggests that perceived differences in pay and effort can have a strong impact on one's psychological state at work.
We have a tendency to think about the fairness of what we're paid for the work that we do in relation to what we perceive others are being paid for the work that they do. Perception is the key word — it's a highly subjective and imperfect inference.
- Do you believe other cities will follow New York City's recent salary transparency legislature?
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Regardless of the diffusion of these types of laws, it presents interesting opportunities for employers. Posting expected salaries on job ads could be helpful to many employers.
Job seeking is a self-selection process. Candidates choose which jobs to apply to based on perceptions of fit. By posting anticipated salary information, candidates who are looking for a higher paying job can withhold their applications, thus saving businesses time and money screening candidates who ultimately wouldn't be interested in the job.
Russell Spears
Assistant Professor of Economics
Department of Economics, Finance and Quantitative Analysis
- Should one ever share their salary with coworkers? Why or why not?
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Voluntarily sharing salary with coworkers has historically been taboo in the workplace, mainly due to … unintended consequences. While salary transparency and sharing aim to promote aggregated labor force symmetrical knowledge, it is not exempt from the potential consequences of workplace disharmony.
- For anyone who feels their salary hasn't kept up with inflation, how should they make the most of their income?
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While most salaries have not paralleled inflation and the cost of money (debt) is becoming more expensive, it is important to somehow optimize value from expenditures. With the housing market and auto industry still at a premium due to low inventory, consumers can boost efforts to find a different kind of value in products and services.
For example, according to the National Retail Federation (NRF), consumers are spending more time finding deeper discounts from other manufacturers and retailers. In other words, consumers have increased both in-store shopping and e-commerce to compare discounts, thereby making the optimal purchase that will take their dollar further.
- Do you believe other cities will follow New York City's recent salary transparency legislature?
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In the aforementioned commentary of New York City’s salary transparency legislature, it is important to materialize the reasons for states to follow suit.
According to the Wall Street Journal, 30 states have some form of salary transparency law. So, if other cities intend to follow the Big Apple’s transparency law, they would have to somehow quantify the intended consequences and juxtapose those with the unintended consequences.
However, if labor costs are driven up from these laws, firms must hire [fewer] workers unless they can pass along these higher labor costs to the consumer, which again contributes to even more inflation. New York City and other cities can stand as petri dishes for these types of [legislation], so following suit will always depend on the current labor market conditions.
Methodology
FinanceBuzz surveyed 1,250 U.S. adults in November 2022. They were asked if they regularly talk about personal finance with friends or family and which topics they’re comfortable discussing. Likewise, they were asked whether they ever disclosed their salary and whether they felt they were being paid fairly.
Quotes were lightly edited for clarity.
2019 survey results
- Millennials are more open to discussing their money details than Gen Xers. This is true whether they’re sharing money details with parents or co-workers — or on social media.
- Money taboos are strongest around the money we have or owe. People are least willing to share the amount of money in their bank account, with just 30% saying they’d be willing to share this information with a close friend. Almost half of those surveyed (47%) would be willing to share their credit card debt details with a friend. People are much more willing to share details around the price they paid for their home (76%) or their credit score (61%).
- 83% of people think parents shouldn’t discuss the details of their personal finances with young children (ages 14 and younger). This includes 14% who say parents should never talk about money with their kids.
- Salary has long been a taboo topic, but this appears to be shifting. 29% of millennials say they’re willing to discuss their salary with a co-worker versus 21% of their Gen X counterparts. Millennials are also more open about discussing salary with a close friend (60%) compared to Gen Xers (49%).