Imagine walking down a busy street. You see people you’ve never met hustle to and fro. They’re going to work, school, and social gatherings. Some faces are smiling; others, not so much. You don’t know them and they don’t know you.
Now, imagine seeing digits carefully placed above their heads. When you look at these digits you judge someone beyond their race, ethnicity, age, gender, potential sexual identification. These numbers allow you to see someone’s annual income, and even their net worth. Suddenly, that man with ripped jeans looks a lot more impressive with a staggering 7 digits above his head, doesn’t he? Or, how about the mother with two kids followed along by a 4-digit number?
Would you worry more? Would you care more? How would you evaluate disparities?
Traditionally, annual incomes are closely guarded secrets. Nobody knows what their neighbors make most of the time. Unless you work for a public, governmental organization that requires public disclosures, annual income is between you and your employer.
Even more difficult to ascertain is net worth. As a total of all assets — liquid and non-liquid — it can be challenging to calculate. Net worth represents a total wealth after taxes that’s yours to keep and grow and spend as you see fit.
Aside from the aforementioned exception for public employees, income and net worth tend to stay private. Broaching the subject in certain company can seem gruff, rude, or downright hostile. To talk about these numbers is to admit something… personal.
It’s as if net worth represents our worth.
If you were to ask your neighbors what their incomes and net worth was, how might they react? How about your friends? How about your acquaintances? And perhaps most tellingly, how would your parents react?
Likely, there would be some awkward reactions, defensiveness, shame, and dread about talking in depth about digits. Those in poverty might exhibit the same emotions as those who are wealthy. Talking about money management and worth are inexplicably tied to self-worth and self-identity.
The consequences of this hush-hush mentality have been grave. To publicly acknowledge may seem novel, but silence harbors injustices and prejudices. And that’s why we must throw open the door to personal vaults and share.
Take the gender gap injustice: women make 77 cents for every $1 men make. There’s nothing fair about it. If we treated, understood, and respected women as equals, this pay gap wouldn’t exist. Women also deserve paid maternity leave, child care assistance, and flexible health insurance options should they be single parents. Each of these failures in assistance perpetuate gender inequities.
Another population that suffers greatly for economic privacy are African Americans. In 2011, black workers made an average (median) household income of $39,760. Whites took home a staggering $67,175 in comparison. Racial inequality has been around for hundreds of years, but that doesn’t mean we should accept this status quo. Again, various factors hold African Americans back: high policing in black neighborhoods, judicial policies that prejudicially penalize non-violent drug offenders, and poorer educational opportunities in predominantly minority communities.
Between communities, tremendous per capita incomes exist. You can be born and stay in poverty — all as a consequence of your birthplace. In Washington, D.C., the average per capita income is $45,290. But in poverty stricken post-boom-and-bust Gary, Indiana, each resident makes an average $15,764. While these average incomes help show broader income inequality, they’re depersonalized. You can’t see the individual and how that one person must live.
Annual income and net worth become two of the best measurements for the consequences of these hurtful, unequal policies. By failing to openly discuss these issues, we fail every disadvantaged group.
By opening up our wallets for analysis, we may squirm and squeal. It’s uncomfortable to admit our total salary and savings because we think it says something about who we are; frankly, it does. But there’s a chance that if we admit our incomes and net worth, we’re providing those looking for equality an opportunity to stake their claim.
Oh, lest some commenter call me a hypocrite, I make about $20,000 per year.
Very interesting take on a sensitive topic Sam. I never thought about it before, but you’re right, silence does help maintain the current economic inequities you’ve identified.
I think part of the challenge that people have with these numbers is that society has made them analogous to your “score” in a video game. It’s used as a measure of one’s success in life. Not sharing means that we can protect our ego by NOT knowing that our friends and neighbours are “beating” us. People protect their self-image by hiding their true “score” behind a facade built with debt.
But we know that’s all crap don’t we? Success in life is so much more complex then that. It should measured by the richness of our relationships and our sense of fulfillment. You can’t measure personal fulfillment from a bank statement.
Great post Sam, thank you!
I think most people want you to look at their clothes, their house, and their car(s) and make assumptions about their income/net worth. I drive a 10 year old can and live in a house that needs work, but I bet the number above my head would not match expectations…
Good discussion about keeping financial information private leading to lack of understanding. It seems that people with little money try to put their best foot forward and wear the best clothes and drive the best cars that they can- just like everyone else. This can make it hard to see real problems.
I think I’m missing your point — is it the last sentence of the post in which you say, if we reveal our income and net worth, those who suffer from all the gender and race and economic inequities then would have something to strive for? It seems like a far more complex issue — and even your statement that you currently earn $20K doesn’t take into account that you’re deferring current income to get a PhD and move into a higher income bracket later.
FWIW, I’m a government contractor and am forbidden to reveal my salary! Esp to coworkers. Doesn’t take a rocket scientist to figure out why. And yes, I definitely feel if the numbers were revealed, we’d see some inequities at work!
Finally, I really liked your image of the tattered man with the 7-figure net worth. Would knowing his numbers change my perspective of him? Yes, it would. I’d be dying of curiosity to know how he made his money, what choices had influenced his wealth, and whether his appearance had anything to do with his acceptance/rejection of it all.
When this post popped up on Twitter, I thought it was going to be about giving on your own accord. I’d be curious for your thoughts on charitable giving…I don’t see much about it on many blogs.
Hey Katy!
Great question about charitable giving. That’s something I care deeply and have written about before. I’m not sure if you mean disclosing charitable giving or giving in general, but I’ll try to answer both. Generally, I think disclosing charitable giving can go either way… Sometimes it feels like grandstanding, and at other times it comes across as generous and supportive for a cause. Likely, it depends on the person. Nonetheless, I’d always encourage people to give when they can.
Sam
Interesting topic, Sam! Despite revealing my net worth on my blog, I’ve always been hesitant to share the salary from my day job. Why? Potential resentment from co-workers. And although I budget down to zero every month, I have a few different sources of incomes, so it would be tough for anyone figure out my exact salary from my blog.
Regardless of all that, I’m very interested in the #TalkPay movement. Although it was short-lived, it made an important statement about the gender pay gap.
It’s also been interesting to see pay transparency from several tech companies, including Buffer. More here: https://open.bufferapp.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ Will it continue?
In my opinion, compensation transparency removes unfair pay gaps. It also eliminates someone’s ability to earn more just because they’re better at negotiating.
Sorry to be pedantic, but median means middle, it’s the 50th percentile. This is very different than ‘average.’ Average income tends to be far higher than median as the million dollar salaries help pull up the average, but the median numbers are still pretty awful.
Hey Joe,
Thanks for pointing this out, as I don’t want to be confusing for people. Basically, average is a catchall term for mean, median, and mode. By clarifying that it’s specifically a median, I wanted to avoid confusion of it being a mean or mode. And yeah, you’re absolutely right, any way you look at it the numbers are painful.
Sam
I’m all for transparent pay; it’s just hard to be the first that goes 😉 As a female aerospace engineer (or, you know, rocket scientist), I have been quite sure that I have been undercompensated my entire career. Some people are better at negotiating; it’s true. But also, my employers have a tendency to think I just can’t do the job as well as a man. They’d never SAY that’s how they feel, and some of them might not realize that’s how they think.
This is why I love sites like Glassdoor.com so much. I can log on and see how much a company is paying a specific role – at least as reported by those who have shared. It’s the beginning of transparency without being overly transparent about WHO is making that figure.
I know what you mean about the income inequality, but I also have a friend who is constantly telling everyone, about how much she makes, bonuses, etc… Even though I have at times made more money than her, now that I quit the corporate world to manage my rental properties and freelance, she seems to look down on me choosing a simpler life instead of chasing a paycheck. I would rather that money not even be an issue with talking to people. I am financially independent at 40 from a combination of simple living and smart investing. I like how ERE doesn’t state is net worth, but instead states that he has enough money and income to last 90+ years. But he lives on less than $10k a year. MMM is similar, but has a family of 3, so $25k is more like it. I love hearing more about how people live on less, rather than how much they make!
I disagree with the arguments in this post. I do not see how having knowledge of everyone’s compensation and net worth is solving any issues. First of all, we have a census every ten years that collects all the data that you have referenced in your piece. What more is to be gained by taking this kind of information down to a personal level? Nothing. Women will still be compensated less than men, African Americans will still receive lower compensation and so on. You are only focusing on one factor and not the entire situation. For example, if we looked at the income disparity of African Americans, would we also find education and family unit disparity and more? The answer is yes. I do not take issue with addressing disparity, but “get out of the weeds” and take a higher level view and do a root-cause analysis of the situation. Taking away our personal liberty to financial privacy without such an in depth review will not address the issues you reference and will likely further domestic turmoil and unrest in this country.
imo, i don’t think one should share their income or net worth..if you have a comfortable income or net worth, out comes the charlatains, scammers, con men and folks think someone is better or is worth more human like if their $$ is high..
I wrote a different blog in the past that was on a totally different subject, and a few times I met strangers who knew the blog and referred to things I had posted there, that were inside our home. Even though I had freely shared that info, hearing it reflected back that way felt oddly invasive. That’s part of why we don’t share our numbers. The other part, in all honesty, is that our numbers are big. Way above average. And we don’t want people to judge us for that, because we actually live on something much closer to the the median U.S. income, and save and give away the rest. And more than that, we don’t want those numbers to be a distraction or a reason why people don’t want to read our blog. We don’t blog about the numbers, or say much about how we got there, but instead talk about the feelings and conundrums involved in planning for early retirement, which are a bit more universal.