Meanwhile, on the other side of the coin, I can show up at salary negotiation with a stack of W2s that said I made ~$280k per year while I was at Google, and they will still offer me something like $140k. That is good money and all, but I have data that I can do better ;)
So I am not sure that everyone is economics-textbook efficient. Rather they have some number in their head, and nothing will change their mind. ("Everyone we interview is so awful, it was so nice to meet you!" then "No way we'll pay you that." It's cute.)
So, even if you made $280K at Google, you'll get the $140K offer for that role because $140K is the top end of that range. You could get targeted into a different rank to get into a different range if you're work it. This is where you end up in a different title or level. It's much easier in the HR system to click the different title in the drop-down for you, than it is to get escalations and approvals to pay you outside the defined salary bands.
Note there are definitely some places with weirdly wide job bands. eg. some of the big banks has ranges that vary hugely to account for differences between the trading and back-office salaries - eg. VP on a trading desk with high salary vs VP in IT with low to middling.
1) Big companies already decided what your job position is worth, and don't have time to negotiate. They have 75,000 other employees, growing that to 75,001 is not worth special-casing you.
2) Small companies have not realized how expensive custom software is yet, and are low-balling you out of general ignorance. Or, when they're aware of the true price, they decide they don't need custom software anymore. (Which I think, in many cases, is the right decision.)
I still think that making the employer put a number or a range down, which might translate into some market research, would benefit everyone.
When someone asks me, to show I'm honest, I provide my paystub. I accept that the data I receive might not be accurate, but that doesn't stop me from trying.
I never apply to jobs that ask these questions. It shows they're more concerned about holding you back than competing with the market.
Disclaimer: Not a lawyer, not your lawyer.
This is very good to know, thanks.
It's also unlawful to ask about current or past compensation in New York.
My friend and I interviewed for the same job, he was working making 45k. They offered him 50, he declined. I was unemployed, so they inexplicably offered me 120k.
It won't stop all places, but it will stop some places. You have to be OK with that.
I'd never assume that your salary is a secret. It's pretty easy to figure it out. Making a material misstatement about it will be perceived as a character defect at best if you are caught, which may happen in the future when you are in some stupid internal dispute.
On the other hand, if the employer requires the applicant's current salary on the application, and Mr. Qualified Engineer applies, they can offer him $55k instead (just enough to make him consider the offer if he's unhappy with his current job).
Using this strategy, the employer can make sure their employees never know their real worth, since every raise/promotion/new job they get is based on a "just good enough" improvement over their current salary.