The last great taboo

LONDON

We are no longer embarrassed when talking about sex. Death, disease and depression are discussed openly. There isn't a single bodily function that a comedian can't joke about on TV.

But one taboo remains. Most people are reluctant to discuss what they earn, or how much money they have. We know precisely how much most chief executive officers earn. But our co-workers? Our neighbors? Most of us have no idea what they make, how much they owe on their house, or what kind of savings they have. In reality, we'd all be better off if we revealed our finances. We would get a fairer deal, feel more secure, and be less likely to run up crazy debts. If we're comfortable talking about sex or death with everyone, we should be able to talk about money.

Regulations force senior managers to make their earnings public. We know that Lloyds Banking Group CEO Antonio Horta-Osorio will get an annual salary of $1.7 million, as well as a bonus, because the bank said so in a statement when he was appointed. With a quick search, we can get details for nearly any corporate executive.

Scandinavian countries aren't shy about it, either. In Norway, details of everyone's earnings are published online by the tax authorities.

But almost everywhere else, salaries are still cloaked in secrecy. A survey of 1,392 British adults published last week by the website Uswitch.com found that 37 percent of people were happy to tell family and friends what they earned, 20 percent would discuss their bonuses, and 23 percent their debts. But, of course, that still means 63 percent of people aren't happy to discuss their finances.

A U.S. survey found that Americans were also reticent. A poll by Harris Interactive of 2,257 adults for the website Glassdoor.com this year found that 17 percent of people wouldn't discuss their earnings with anyone at all. But of the 83 percent that would, most would share that information only with their spouse or partner. A third would discuss their earnings with their best friend, only 15 percent with a colleague at a similar level in the workplace, and just 5 percent with an acquaintance.

There is still huge resistance to revealing your financial situation to the world. The majority of us just won't do it. But we should all be completely open about what kind of money we make. Here's why.

One, everyone would benefit. We can't really be sure if we are paid fairly unless we know what our colleagues are getting. Our bosses can easily hoodwink us because we don't have enough information. If we all knew what everyone else was getting paid, we would find it easier to seal a better deal. In the short term, we might suffer some embarrassment if it turned out we'd negotiated only a fraction of what everyone else in the office was getting. In the medium term, we'd come out ahead.

Two, since we have no idea what everyone else is earning, we tend to feel insecure about what we are making. We look around us and assume others are earning much more. Chances are, we get a salary somewhere in the middle. If we were more open, we'd probably be pleasantly surprised and realize we are doing okay. Our self-esteem would improve.

Three, it will make us more financially responsible. One of the big problems around the world right now is consumer debt. That is partly because we are so secretive about our finances. We show off by spending lots of money. If it was normal to tell everyone how big your mortgage was, or how we had purchased that new car entirely on credit, we might feel a bit uneasy. We would compete on financial responsibility, as well as just consumption — and feel less tempted to run up unaffordable debts.

True, what we earn is personal information. It reveals much about us and our place in the world. But society is undoubtedly a better place for having swept away Victorian taboos on discussing sex, death, health and emotions.

We should do the same for money as well. How much do I earn? I'll tell you — but only if you tell me yours first.

© 2010 Bloomberg News

The last great taboo 11/12/10 [Last modified: Monday, November 7, 2011 1:20pm]

    

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