The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
Kiersten Post isn’t afraid to talk about money. She chats with friends about buying a house and budgeting for vacations. She shares her personal finance goals with family members.
And much to her parents’ surprise, she even discloses her salary. Regularly.
Post, 29, estimates that she’s told more than 30 people how much money she makes since starting her career in 2014, most recently as a recruiter for a tech company in Tampa Bay, Florida. Many of the people she tells are her coworkers. More often than not, they share back, too.
“They were really shocked that I would have those conversations,” Post says, referring to her parents. “They didn’t think it was appropriate. They didn’t think it was a kind thing to do. I always came back and said, ‘How else am I supposed to know that I’m being paid fairly if I don’t ask?’”
From catastrophic recessions to wage gaps, Gen Z and millennial worker attitudes are changing
Post is among a growing share of younger workers to break those workplace taboos and discuss how much they’re earning with their networks. Nearly 42 percent of Generation Z workers (ages 18-25) and 40 percent of millennials (ages 26-41) have shared their salary information with a coworker or other professional contact, compared with 31 percent of Gen Xers (ages 42-57) and 19 percent of baby boomers (ages 58-76), according to a nationwide Bankrate survey from March.
Experts attribute that openness to broader generational shifts regarding work and money. Early in their careers, catastrophic downturns shaped their perceptions — from the Great Recession of 2007-2009 to the coronavirus crisis. Those events also dented workers’ earnings and limited their job prospects, keeping them from buying homes as their student loan debt metastasized.
Millennials, for instance, held 6.4 percent of the nation’s wealth through the fourth quarter of 2021, despite making up the largest share of the workforce, according to Federal Reserve household wealth data. When baby boomers were around the same age in 1990, they controlled more than 3.4 times that amount (22 percent).
Throughout most of the recovery from the Great Recession, wage growth remained stagnant, and millennials learned that their biggest pay gains would come from job-hopping, parting from their older predecessors.
And now, Generation Z is starting to enter the workforce at a time when inflation is at a 40-year high, which is taking a significant bite out of all generations’ paychecks.
All of those factors have only exacerbated the longer-run wage disparities that have kept workers behind for generations, such as the racial and gender pay gap. More than half (or 57 percent) of millennials said they felt underpaid compared to peers with the same work experience and qualifications, along with 45 percent of Gen Zers, Bankrate’s poll also found.
Across the board, salary transparency does help eliminate those asymmetric information problems that can contribute to the gender wage gap, racial wage issues and the labor market. At the end of the day, we do want a labor market that is fair and equitable for everybody.
— AnnElizabeth KonkelEconomist at the Indeed Hiring Lab
Labor economists say younger workers might feel more comfortable being open from growing up with social media, and they’re more likely to forge closer friendships with their coworkers.
In a previous position, Post once approached a more senior-level coworker after getting a hunch that she didn’t ask for enough money. “I didn’t want to wait two years to find out that I was making less than everyone else,” she says. But after sharing her salary and bonus potential, she learned that she was being fairly compensated — but another coworker wasn’t.
“She was shocked because a team leader had the same bonus potential as me,” Post says. “It got the wheels spinning about asking for more in the next review.”
Workers also now have more bargaining power than ever to hunt for the pay or position they want. Employers have had a near record number of job openings for 13-straight months, and about 1.8 positions per every jobless worker are open, according to the latest data from the Department of Labor.
Amid talks of a “great resignation” of workers, more than half (or 51 percent) of workers in the labor market said they were likely to look for a new job over the next 12 months, according to Bankrate’s survey. For Gen Zers and millennials, a respective 79 percent and 61 percent are likely to join the search, compared with 37 percent of Gen Xers and 27 percent of boomers.
And Gen Zers and millennials (at 70 percent and 58 percent) are also overwhelmingly more likely than their older counterparts to have taken career action at some point between February 2021 and February 2022, such as ask for a raise, quit their job, get a new job or ask for more flexibility. That’s compared to 36 percent of Gen Xers and 29 percent of boomers.
“As long as the unemployment rate remains as low, workers will maintain a high level of job security,” says Mark Hamrick, Bankrate senior economic analyst and Washington bureau chief. “And with that, they have a high degree of confidence that they can find work more to their liking. This provides an opportunity for better work-life balance and higher pay, which should translate to progress with their personal finances.”
Still, experts say there’s a right time and place to bring up a salary conversation, and workers shouldn’t feel like the responsibility to achieve equal pay falls on them. Here’s what to know about bringing up your salary with a coworker, including how to know when it’s time to walk away.
1. Only discuss salaries with coworkers who feel comfortable, and do it outside of work
By law, employees can discuss their pay with coworkers, according to the National Labor Relations Act of 1935. Yet, some companies still find ways to fire employees for discussing pay by making them sign non-disclosure agreements, according to Katie Donovan, equal pay expert and founder of the consultancy firm Equal Pay Negotiations. Not to mention, some workers just might not feel comfortable.
If you feel anxious, try chatting with a coworker who you already have a relationship with and only bring up your pay if career or personal finance-related topics come up in conversation. Consider also approaching the subject outside of work hours, perhaps at a happy hour or post-work meetup with colleagues.
The sooner in your career you bring up those conversations, the quicker you might be able to catch wage gaps. For example, a woman starting her full-time career today would miss out on $417,400 over the course of a 40-year career based on current disparities, according to a 2022 analysis from the National Women’s Law Center.
“You’re always going to have people who are competitive or don’t want to be transparent. Maybe they know they’re paid better than they should be,” says Nicole Palidwor, a certified career coach with Ama La Vida. “But encouraging millennials and Gen Z to begin having those conversations early in their career will be helpful.”
Post has an approach that’s worked for her. When talking about money, she’ll often voluntarily disclose her salary first. “I can tell they’re curious and that they wanted to ask, so I’ll say, ‘By the way, this is how much I make right now,’” she says.
That conversation shouldn’t just be left up to women or individuals of color. Experts say White men have a role in the conversation too since they’re statistically and historically the highest paid demographic.
“Go find the tallest, whitest dude,” Donovan says. “To be paid equitably, you want to earn what White men are earning. The median of everyone is less than the median of White men.”
2. Do outside research
But know that there are limitations to only talking with your coworkers. Perhaps you and your coworker are earning comparative salaries, but your company is also paying less than the industry standard. That’s why it’s important to research what workers with similar experience make in your sector and region.
You might be “on point with your coworker down the hallway, but a couple years later if you switch jobs, you might be like, ‘Wow, we were all underpaid, and none of us knew it,’” Konkel says. “When someone is straight out of school and has little work experience, and you’re a woman of color and your White male colleague is making substantially more than you, it gets trickier to be able to look at those comparisons and know, why is it different and why is it up or down?”
Consider looking at salary data from websites such as Glassdoor or PayScale and chatting with recruiters, trade organizations, unions and other pay experts that represent your industry.
Consider asking those experts, “Someone with ‘X’ years of experience, what would you offer that person?” Konkel says.
3. Know the limitations of data sources
That research is easier said than done. Workers have no way of verifying whether self-reported salary data on websites is accurate, and most of the time they aren’t, Donovan points out. Not to mention, salary information is likely already incorporating significant wage gaps because it includes everyone into the data, even the historically underpaid workers, she adds.
Acknowledging those limitations is important for both workers tracking down their pay — and the companies that hope to set wages fairly.
“The way the system is set up, no one truly can ever know for sure that they’re paid fairly,” Donovan says. She suggests always aiming for the high end of any salary range, with a good rule of thumb being the 75th wage percentile of your specific job and industry. “No matter what the job, shoot for the high end, and settle for what you’re willing to settle for.”
4. Know when to negotiate and when to walk away
If you suspect that you’re underpaid, next comes the negotiation phase — and the job-hunt process. Approach both your current and potential employers at the negotiating table with clear ways that you brought value to your team and company. Yet, regardless of whether you really want to leave your position, you might be better off if you have a new offer.
“Your goal should be to get two offers when you look for a job,” Donovan says. “That gives you the power to actually make a decision instead of being kept with what you’re given. And that’s when you have power in the negotiating process. You can actually truly say no and truly walk away, and then they’ll truly give you the highest offer they have available.”
Even staying at one job can leave significant amounts of money on the table. On average, workers see a 2 to 3 percent wage increase every year, according to historical data from the Department of Labor. But the market has changed considerably amid pandemic-induced disruptions to the worker pool — so much that firms’ salary budgets jumped by the most since 2008, according to the Conference Board. Data suggests that job switchers are reaping most of those benefits, with workers who switched to a new position in March seeing a 7.1 percent increase in pay, compared with job stayers who saw a 5.3 percent raise, according to the Atlanta Fed’s wage tracker.
But even when you hunt for higher pay, be careful about disclosing a specific salary that you’re seeking. Also avoid divulging your salary history — information that some states, including Colorado, are now banning because it can perpetuate wage gaps — and don’t lock yourself into a lower salary than you could get by asking for a specific number.
“If the employer says it’s going to pay $50,000, that becomes the floor,” Donovan says. “If I say I’m looking for $50,000, that just became the ceiling. That’s why employers want you to say what you’re considering.”
5. Know it’s a societal problem — not a you problem
While talking about your salary can arm you with more knowledge, it doesn’t erase the fact that companies are still underpaying workers, whether they realize it or not.
“It’s putting the onus on them to fix it, but it’s not their fault,” Donovan says. “It’s the employer’s job. Women and people of color are consistently underpaid, and if you’re underpaid for one reason somewhere in life, it just follows you over and over and over again.”
Achieving pay equity requires more than just talking about salaries with coworkers but also putting pressure on companies to be transparent with their pay scales and salary ranges.
“Companies that always say they pay competitively but hate listing a salary range, they’re looking for the lowest bidder,” says Ama La Vida’s Palidwor. “It’s who can get the highest experience for the lowest amount of money.”
Possible remedies could include defining what employees need to do to get to the next level with their salary, how pay raises are calculated and how salaries differ from workers in different regions of the country. Companies that are hoping to make the most significant change should avoid basing their salary offerings on the median in the market because of its inherent inequalities, Donovan says.
If you find out that your coworker is making less than you, pay it forward, Post says. Consider helping your colleague come up with her own negotiation strategy.
“We want to show up for each other, we can only do that if we’re being open and honest,” she adds. “People do have this mindset of — ‘I don’t want to make anyone feel bad. What if I make more money than them?’ — they may think it benefits themselves without thinking about the larger picture. The only people who benefit are companies.”