You earn how much?!!
What happens when people reveal their earnings?
“Discussing money is the last taboo,” says Karl Plunkett ruefully. “We are happy to discuss sex, or death, but not – shock, horror – how much we earn. It’s just not something we do.”
Plunkett knows how painful it can be, having taken part in an open – and televised – discussion of wages at the company where he works. In a remarkable experiment, the multimillionaire owner of Pimlico Plumbers, Charlie Mullins, asked his entire workforce to reveal exactly how much they are paid. One by one, they pinned their salaries on a notice board for workmates to see – provoking a tidal wave of shock, guilt and resentment.
“If this happened at my company,” said one viewer on Twitter, echoing what thousands of others may have been thinking, “there would be war.”
Remarkably, the experiment had a happy outcome. Better paid staff volunteered to take a pay cut to help raise the wages of the worst off. Mullins matched all contributions, and still somehow managed to reduce his overall wage bill by £200,000.
For decades, anthropologists have argued that primates have a biological, evolutionary sense of “fair play”. A celebrated experiment on monkeys showed they would prefer receiving nothing to receiving a reward that significantly favoured a second monkey.
But you don’t need to be Alan Sugar to see why companies don’t usually do what Mullins did: employers enjoy an advantage in pay negotiations because they have all the information and employees have none. That may gradually change, however, because under the Equality Act 2010 remuneration secrecy clauses in employment contracts are now unlawful, so the information may start to leak out.
“I’ve always believed in transparency,” says Mullins. “Perhaps if the government and other businesses were more transparent you wouldn’t have so much tax dodging and tax avoidance.”
The Tax Justice Network, which campaigns against tax avoidance internationally, believes we would all benefit from the kind of openness seen in Scandinavia, where everybody’s income is publicly available, through tax returns that are published every year. “The information is useful,” says Matti Kohonen, a spokesman for the network, “because it helps you when preparing for job interviews or pay rise meeting.” As a result, he believes, salaries in Nordic countries tend to be more equalized.
In Sweden, the information is published in directories, available for sale and in libraries. (“Check out what the income is of your neighbour, colleagues, your boss, friends and relatives,” urges the publisher.) But there are limits even to the Nordic tolerance for openness: when the information was put online, it led to a wave of complaints as people found themselves being reproached by friends and relatives for not spending enough on Christmas or birthday presents. The system was changed so that the information remains publicly available online but if anybody makes an inquiry, a note to that effect is sent to the person being investigated. (The directories can still be browsed anonymously.)
PR manager Karl Plunkett (copyright Channel 4)
Is Britain ready for such openness? Viewers of Channel 4’s Show Me Your Money have been deeply divided “I have been watching Twitter since it was broadcast,” says Plunkett. As PR manager, he was largely responsible for allowing TV cameras in – and as one of the highest paid staff came in for much criticism. The majority of comments online, he claims, have been positive or constructive. “But about 20 per cent is not very constructive, not very nice. And some of it is downright vile.
“Some chap who professed to be the owner of a Brazilian restaurant was on the phone at midnight, talking about how I was a tightfisted, horrible person.”
The experiment arose after Mullins imposed a pay freeze two years ago. “It’s tough out there,” he explains. “We can’t raise our charges. We have to raise productivity.” But staff continued to ask to him for money. “Every other week they come to me, ‘I’m going to have a baby’, ‘I’m building an extension’, ‘I wanna move house’. Well, I’ve already got a wage bill of £8m, and that’s a lot for 200 people. It ain’t coming out of my money,” says Mullins, a self-made man who gets around in a Bentley and lives in a palatial house with tennis court and swimming pool. “Some of the managers are well overpaid. Let’s see them take a wage cut.”
Taking inspiration from an experiment carried out by a factory in the 1950s, Mullins put up signs around the office announcing a new pay system, and called staff into meetings. Then he pinned his own annual wage, a big fat £1m, to the board and invited others to follow. (Nobody was obliged to take part, or to appear on TV, and about 15 per cent declined to do so.)
Women in the call centre were shocked to discover that the newest (male) addition to their team earned £3,000 a year more than them. A mechanic, Mark Smale, was depressed to find he earned £9,000 a year less than his colleague: over four years at the company Smale had taken home £36,000 less than John Frankis. “I can’t see any great difference between the two,” said their manager, “and I see their work first hand every day.” (At this remark, interestingly, the entire team looked appalled and ashamed.) Meanwhile, Tina Cox in the canteen couldn’t believe how much managers such as Plunkett earn (£56,000 a year) while she struggles to make ends meet on £14,500.
Tina Cox, in the canteen (copyright Channel 4)
How could there be such discrepancies between people doing similar jobs? “I was amazed,” says Mullins. “It wasn’t meant to be that way. We have 200 people working for us and over the years [since 1979] as the company’s grown we’ve negotiated with people as they have come in. Someone might come along, and we say it pays £30,000, and they say they’ll take it for £32,000. And then we have maybe one person coming in for a raise and we might say, we’ll give you £1,000 but don’t tell anybody.” Over time, the differences become pronounced.
Having upset virtually everybody, Mullins challenged them to come up with a new structure. Underpaid workers looking for more money were encouraged to persuade higher paid colleagues to take a cut, with little success. When they approached Plunkett, he said: “If you are asking if I would take a paycut, it’s a no,” and walked off. Then he submitted an application to Mullins for a £19,000 raise.
One of the call centre staff went to talk to the plumbers, who earned as much as £150,000. “If all of you did this it would cost you £3 a week to bring call centre staff up to £21,000,” she said.
“You were told what you would earn when you came here,” came one plumber’s reply. “It’s a dog eat dog world. It ain’t my problem what you earn.” Later, when she’d gone, he added: “She ain’t a charity. She’s got a fucking job. She ain’t a tramp. She’s got a house. What’s she moaning for?”
His remarks divided viewers. “I cannot believe how greedy and selfish some of these people are,” came one comment. But another, typical of many viewers, said: “Who wants to take a pay cut, fair or not? Times are hard… I for one wouldn’t.”
Mullins regretted starting the whole business. “I wanted to pull the plug, because I had unhappy people.”
But it was too late: the information was already out. “Happily, a breakthrough came when the mechanics who service the company’s vans met to discuss sharing cash. Somewhat reluctantly, John and one other offered to give up a little money, but as soon as they’d offered, mechanics who earned less said they didn’t want to take it from them. It didn’t seem right, they said. So the group went off to identify ways to save tens of thousands of pounds from the departmental budget, and presented their ideas to Mullins.
The mechanics (copyright Channel 4)
“I was so shocked,” he says. “I don’t want to be disrespectful about mechanics but they normally have their head stuck under the bonnet, and here they were coming up with cost cutting ideas.” In other words, the exercise had encouraged them to take responsibility for the company’s success, rather than milking it for whatever they could get. “They said these were things we should have done years ago. Believe me, the transport manager has had a bollocking since then. Them fellas really put their head together.”
Since the programme went out, Mullins says he’s had many calls from other companies interested in repeating the experiment. “I don’t want to be responsible for them. I can only say, it worked for me. We was very dubious about doing it, and it weren’t plain sailing, but it cleared up a lot of unhappiness. Our people are more motivated and our sales have gone up.
“What was nice was the workers showing compassion to fellow workers. Some said, I’m happy with what I’m earning: I’m not prepared to take a cut, but I’m happy to give up on a pay rise. But there was a number of people that took actual wage cuts. ”
Even Plunkett eventually did that, foregoing his request for a £19,000 pay rise in favour of a £1,000 cut, after spending a day struggling to work in the canteen alongside Cox. “I felt Tina was not getting a living wage,” he says now. “If I could give £1,000 and Charlie would match it that would make a big difference to her situation. It wasn’t going to hurt me that much. But I don’t think everybody should be made to do what I did.”blog comments powered by Disqus