The Fair Salary

Spoiler alert: it doesn't exist

by Sofia Jacobi – tbd*, March 17, 2021
Man sitting on coins reading

Our Salary. Many of us don't like to talk about it. It seems that we reveal a hidden, shameful part of ourselves when we talk about it with others. But why is that?

Perhaps it is because we are aware that (financial) resources are finite and the monetary valuation of our labour inevitably triggers the question in those that earn less: "Am I worth less?". Or because suddenly ourdifferences, which are otherwise difficult to put into words, pop up in a tangible and above all measurable way? Or because it feels "unethical" to give a monetary value to a person and their labour, although it is done all the time in our culture and is even required of us? Or simply because it is to the benefit of employers if employees do not discuss their wages, as then there would be no pressure to change?

If you type "pay" and "talk" into Google in Germany, the first thing the algorithm spits out is "talk about pay reason for getting fired". What are we afraid of?

The Search for the Fairest Salary

We, the tbd* team, have been in the midst of an exciting and very educational change process for a year and a half now. Not only have we gone completely remote, evolving towards a self-organised organisation, but we have also decided to look at our own blind spots head-on, scrutinise them and change them.

In concrete terms, this includes talking about and discussing all the issues that we consider "uncomfortable" or "sensitive" and that are sometimes painful to deal with. This includes the issue of salary. Previously set by our directors and subject to the negotiating skills of individual staff members, it is now a screw within our structure that needs to be realigned. Particularly because if in a self-organised team like ours, everyone takes on more or less the same responsibility - what factors still define salary differences at all? Education? Seniority? Needs? Life circumstances? Or do we abolish differences altogether and introduce a standard salary? Is that fair then?

Women and Salary

In an intensive but very insightful coaching session, we tried to approach the issue of salary internally. What does it mean for us as individuals? What needs do we personally see as being met? What other ways of compensating our labour do we know and appreciate beyond monetary remuneration?

It immediately struck us how important this topic is - especially for us as an all-women team. We had never before discussed our own needs and especially fears around the area of "money" with such openness. And even though women in Germany have been free to decide on their employment and the associated pay since 1958, we quickly noticed a commonality: for all of us, money was above all an important means of autonomy. The less dependent our income makes us on relationships, housing, family circumstances, etc., the more satisfied we are. 

Compensating for Injustice

We soon realised that we had opened Pandora's Box: Everything is unfair! Why, for example, should someone earn more than someone who has studied, just because of a degree? It may well be that the person didn’thave the same opportunities to complete a degree because of his family background. Should he or shetherefore be "punished" forever and paid less? And why are some educations worth more than others? Why do engineers, for example, get more pay on average than art graduates? Could that not also have something to do with gender discrimination?

A truly fair salary system would have to compensate for all forms of inequality, and differences would only have to be based on voluntarily chosen decisions. Sociologist Erik Olin Wright describes it in his book "Real Utopias: Ways Out of Capitalism" as follows:

Liberal-egalitarian views of justice revolve around the idea of equality of opportunity. The basic idea is that a distribution system is just if it is the case that all forms of inequality result from a combination of individual choices with what is called "option luck". Option luck is like a lottery game in which one participates voluntarily: A person knows a priori the risks and chances of success and then decides to take a gamble. If the person wins, he is rich. If he loses, he has no reason to complain. The counterpart to this is "pure luck". These are risks that no one can control and for which, therefore, no one can be held morally responsible. The so-called "genetic lottery", which determines a person's basic biological make-up, is the most frequently discussed example, but most diseases and accidents also have this character. According to liberal-egalitarians, people should be compensated for all opportunity and welfare deficits that result from pure luck, whereas the consequences of option luck should not be compensated. Once the consequences of pure luck have been fully compensated, everyone has the same opportunities in real terms, and the remaining inequalities are solely the result of choices for which the person concerned bears moral responsibility.

Anyone who has noticed the book title of this quotation should now understand that a truly fair wage within capitalism will remain a utopia. Because every actor in this system must inevitably submit to the rules of this very system. Rules that are primarily not designed for fairness. Let’s look at an example. Assuming we were to introduce a standard wage at tbd*, it would still be subject to our turnover, i.e. the game of supply and demand. In addition, we have to be competitive when hiring new staff – most people would not want to work for us, no matter how fair we would be if our wages were, for example, considerably lower than those of other employers.

How Unfair Can We Be?

It all looked so simple at first. With all the companies and organisations out there, surely there must be one or two that have developed a great pay system that we can take as a model and adapt to our circumstances? But soon we got to the point where we weren't asking ourselves how fair we wanted to be, but rather, "How unfair can we be?" What unfairness do we want to avoid at all costs? Old age poverty? Low wages that don't hold up in the current tight rental market?

We took the first important step: we talked in an open space and without judging or comparing ourselves about our personal needs and limits when it comes to salaries. For the first time, we were able to express injustices we felt and now know how our colleagues feel about the issue. We realised that even in a small team like ours, there are many different ideas and standards. Further developments will show whether we can find a system that can fulfil all needs and wishes. In the meantime, it is clear to us that in the end we will not have a fair wage that can be applied to every person through and through, but a compromise within the context of external factors. Even we are not independent of the system that surrounds us.