I was a manager for a long time, and during that time, every year at raise time I was told by upper management what raises (and thus salaries) were to be, so I knew everyone’s salary in my group. As you might expect, newer employees always made more than those around longer.

I made my opinions clear to my management when things were out of whack… namely when longer-term more experienced employees were making less than newer less-experienced ones. But salaries were not something I could control. Nor could I tell those longer-term more experienced employees where they stood.

But in a recent reorganization, I am no longer a manager (a long story). So I felt I was free of the management conspiracy of silence, and I took it upon myself to tell, confidentially, a particuarly lower-paid but senior employee that she was grossly under-paid. She took it well, and using industry-available surveys is pressing her case. I sure hope she (a) gets more, and (b) doesn’t tell about my input.

It sure is a cultural thing, this silence. I recall being in China, and one of the main questions you asked someone when you met them was “How much do you earn?” A common question and no taboo at all. (Others were: What do you do? Do you have any children?). That was back a while.

Keep in mind that secrecy always has value to someone. All you got to figure out if that someone is you or someone else. If it isn’t you, you’re probably not earning as much as you could be.

On a related note, I think the tabooishness of money is also associated with guilt and lack of money handling skills.

Frankly I’m not that interested in knowing the details anyone. It’s pretty easy to derive the fact that if a family has 2 relatively new cars in the drive way of their 3/5 roomed suburbian house, and their garage is full of stuff, their net worth is likely close to zero.

Amongst my friends and colleagues (when I’m not in a managerial position), we often talk about how much each other is making and how much others make – and how we can make more. If one’s making more than another, it’s not bragging, it’s a statement of fact. Well, unless they’re saying “nyah, nyah I make more than you do” – which is something I’ve never heard of in almost 30 years of working.

With regards to my friends that earn more than I do, I’m not jealous of them and I think the only time I compared and felt badly was when I wasn’t making what I could have. It was a good push for me to earn more. As far as my friends who make a ton? I’m happy that they’ve been rewarded for their hard work. But also grateful that only one of them is making 7 figures.

I’m actually the Lead Scientist over at GetRaised.com (the ones that Donna nods to as giving you your salary – we use BLS data as well as a mashup of open local job postings and user data), which is really code for “behavioral psychologist”, which we just don’t put on my card because it scares people. =]

I actually got the “discussing salary” question a lot in relation to our previous company, JustThrive.com. Many people asked us to include a feature that would allow them to compare their income to others, and internally within the team, we discussed it often. Ultimately, I decided not to take the product in that direction for one simple reason: according to all the evidence that we have from psychology, comparing salaries really just ends up making people miserable.

Social comparison is, in general, a losing game. If you compare and find yourself lacking (which most people do, as the tendency is to compare upwards: to select people that you are making less than, rather than your peers or people who are making less), it is obvious why that might make you feel unhappy. Some have argued that provides motivation to act and to pursue higher salary, but given that above a relatively low threshold, more money does not bring much additional happiness, that doesn’t seem like a worthwhile pursuit.

This discussion is actually part of what led us to create GetRaised, which breaks the rule we made at Thrive. But for a very specific reason:

Knowing your salary in relation to others is critical to getting a raise. When we talk about “market rate”, we imply that other people, collectively, are making around a certain amount of money. And that’s the benchmark we use for changing your compensation.

That said, there is a big difference between knowing your market rate in general, and knowing what specific peers make. And having a private compensation conversation with your boss is a whole lot different than having a public one with your friends.

And one of the important reasons that we use market rates is specifically for women. In general, according to a number of studies, women don’t know their market rate nearly as well as men tend to, and they ask for raises much less often. Part of helping women ask for raises, and closing the wage gap between men and women, is showing them in as strong a way as possible that they are underpaid. We try to do it in a way that isn’t about comparison, but about information, and we’re always looking for new ways to discourage social comparison, but it is a risk we’re willing to run to narrow the gender wage gap with GetRaised.

So here’s my rule of thumb, backed up by psychology: the only people that should know your salary are the ones that need to know (coincidentally, the ones that discourage comparison and keeping up with Dick and Jane). Significant other, boss, kids that are old enough to understand and participate in family finances, the IRS, and that’s really about it. Know your market rate, but don’t dwell on it – trust me when I say that there are much better things to do!

We had moved to Monroe MI from another town only an hour away, but found family / household expenses here to be a completely different formula than what we were used to. We found less income taxes, more property taxes, higher car insurance, higher rent, higher home prices, more retail stores close by where one can shop for bargains, and more free and low-cost community services.

If my relatives and friends who live an hour away have such a different set of parameters to work with, I can’t expect anybody except the local readers to understand the local cost of living.

So, I don’t discuss my exact finances on my blog. There’s no point.