Lower Socioeconomic Backgrounds Lead to Disadvantages in Salary Negotiations
A major study reveals a double disadvantage for job seekers from lower socioeconomic backgrounds, who negotiate less often and face harsher recruiter judgments when they do.
Children growing up in households facing economic hardship often long for the moment they can transition into the adult world: finding a job, earning a salary, and taking their future into their own hands. However, even when they acquire higher education and enter the labor market, their background follows them into the salary negotiation. A new study found that individuals who grew up in lower socioeconomic backgrounds are less likely to ask for higher pay—and when they do, recruiters judge them much more harshly than candidates from privileged backgrounds making the exact same request.
The study, published in July in the journal PNAS, was conducted by Ying Lin, Jackson Lu, and Michelle Gelfand, and encompassed five studies involving 11,344 participants. The researchers examined two complementary questions: who feels they can negotiate, and how employers react when they do. The results point to a double disadvantage: those from lower backgrounds are less likely to ask, and their requests may carry a higher social cost.
The financial implications concern the moment the initial salary is set, and subsequently, raises, benefits, and promotion opportunities. While some employees treat an offer as a starting point and others fear that the mere discussion of it will jeopardize their relationship with the employer, the gap begins even before the first day on the job.
Same Degree, Different Treatment in Salary Talks
One part of the study examined 634 MBA graduates from a leading business school in the USA who received job offers. This group allows for testing the influence of background even among individuals who have already acquired similar professional education and entered a sought-after academic framework.
Family background was evaluated using parental education. Graduates coming from lower-class backgrounds were less likely to negotiate their starting salary. Among the reasons for avoidance, the fear of damaging the new relationship with the employer stood out. This finding underscores that the gap continues to exist even among those who have already reached a prestigious educational framework and acquired equivalent training. The researchers took into account grades, admission test results, and industry, and the connection between family background and the willingness to negotiate remained. The degree provides skills and a diploma; it does not erase the fear that asking for higher pay will compromise the opportunity already secured.
This is a fear that is easy to understand: the candidate has already been accepted, the offer is on the table, and they must decide whether to settle for it or ask for more. For someone afraid of being perceived as problematic, preserving the opportunity can take precedence over improving conditions.
In the graduate sample, those who negotiated earned an average of about $6,450 more per year at the start, after statistical adjustments. The researchers illustrated how the gap can accumulate to about $779,000 over a 40-year career, assuming a 5% annual raise. This is a hypothetical calculation based on fixed assumptions, rather than tracking participant earnings over four decades.
The importance of starting pay also stems from the fact that percentage raises are calculated from the existing baseline. An employee who started lower can receive the same percentage raise as their peer and still end up with a smaller monetary increase.
The Fear of Asking Stays with the Employee
To test the reaction of the other party, the researchers conducted an experiment among 1,133 human resources professionals in the USA. Participants evaluated a fictional candidate whose resume and interview transcript indicated either a high or low class background. In some scenarios, the candidate negotiated compensation, while in others, they accepted the offer.
Asking for a salary increase led to the candidate being evaluated as less cooperative, and this reaction was stronger toward the candidate from a lower background. The detriment to the perception of cooperation was also reflected in a lower evaluation of their recruitment suitability. The experiment allows for the separation of how the request is made from how it is received. The phrasing of the salary request was identical, but when the candidate was presented as having a lower-class background, the blow to their evaluation as a cooperative person was greater. From the candidate's perspective, the fear of being perceived as problematic finds a basis here in the recruiters' reactions.
In another part of the study, which included nearly one thousand full-time employees in the USA, the link between class and the willingness to negotiate was partly explained by a lower sense of power and a fear of negative reaction. The pattern also appeared in data from over 7,800 employees in Australia, where education was used as an indicator of status.
Who Needs to Change in the Salary Conversation?
This study casts a question mark over the conventional advice given to employees: know your worth and simply ask. Preparation for the conversation is important, but when the request itself is judged differently according to the requester's background, the employer also bears responsibility for the outcome.
The researchers suggest reducing ambiguity through clear salary ranges, transparent promotion criteria, and consistent evaluation of requests from employees of various backgrounds. The question for the manager is what they value when hearing a salary request: the professional contribution and the suitability of the sum for the role, or their own level of comfort with the employee making the request.
