If hirer has an equally good candidate or consultant who quotes a lower rate: you're out of the running. Even if you're better, you have to be better value according to the employer's own assessment.

There are few employers who are price insensitive and you have to be in an overwhelmingly lucky or privileged position to find them.

And so the dumb part, the unfair part, about salary discrepancies is that it is divorced from performance. It is divorced from value.

Which doesn't mean that you, on an individual level, shouldn't negotiate.

But it does imply that salary negotiation generally leads to results that (very) (incredibly) (if at all) loosely correlate with what the job is.

And all of this assumes that any two people walking into the same negotiations with the same skillset, exp, etc. will have the same experience. Which is, you know…not how it works.

I had a good understanding of the value I was providing to the business, of what my next best offer was, and I negotiated my salary regularly. (Where my colleague was accepting a rate that was clearly below the market rate)

It was challenging for me to share my salary in this case. On reflection, the situation was not politically in my favour to do this: perhaps I should have negotiated a different job title (but I didn't care about that at the time).

The cool thing is that negotiation skills are a hundred times easier to learn than programming skills. A few weeks of effort will net you thousands or tens of thousands. The effects are cumulative over your life, so the sooner you start, the better.

Yeah, they may be negotiating with other people, but if you are the best candidate then it would be stupid to save one or two dollars an hour to go with someone who is less well suited for the job. Then they hire the wrong person, they’ve now wasted 3 months of wages and were set back by 3 months, and will need to hire someone again, and you may not be available then.

They may have hard caps, and if they do, they may say “look, the most we can do for this job is $35 an hour”. Take it if you’re happy with it, and don’t mention salary again - put up work that justifies your wage.

People need to frame the conversation in what value you bring to the company, not what you’re costing the company to be employed. If you weren’t bringing in greater value to the company than your cost, you would be fired. How much of that added value that you can take home is what is determined through negotiation.

Actually the 60k guy was the most talented on my 15 person team. The reason is simply when the 60k guy came on they asked him how much do you need, and he said 60k. He never asked for a raise, but they actually bumped him up anyway cause they thought he may be a flight risk if he ever checked out the marketplace.

I also found, people are much more likely to underestimate themselves than overestimate.

Only 10% of employees would consistently ask for more money every year. Everyone else almost never asked for a raise.

Now its not solely just negotiation cause if they were a star they probably got it. If they sucked it just made management like them less. When management doesn't like you, and comes time someone needs to be cut. That's who gets cut.

The OP should negotiate up (especially if they have data on comparable pay they can use), but what others in the market with comparable skill are willing to take also matters.

Because it actually is the prevailing market rate for their role and they know that. Also, let's not forget that there is always a large risk when hiring someone, especially as in the OPs case where they are recently graduated. The value can't be certain, so businesses are conservative until it can be proven to be higher. This is logical and expected.

Most professional jobs allow for a range of working styles and productivity so it’s only natural people with the same job would be compensated differently based on the value they offer the company.

Most candidates have no idea what they're worth. Here's what I imagine is happening behind the scenes in your scenarios, assuming a normal candidate:

Scenario 1: Recruiter: Great news. The candidate was happy with the offer and I didn't even need to ask for permission to offer higher comp. It's always extra time and work when I have to ask for $x+$y+$z.

Scenario 2: Recruiter: Ha ha. This candidate has no idea what the market rate is. They must only be interviewing at crap companies. We'll offer the bottom of the pay band and they'll be overjoyed because it's 10% higher than they were asking for.

Scenario 3: Exactly the same as scenario 2, except there was a brief moment when the recruiter wondered if the candidate knew how much they could get.

If I was offered a no-negotiation offer that I felt was low, I would ask for what was fair for what I was worth and if that means I'm breaking the rules then we really arent going to get along.

That's really all it comes down to - what the employer is willing to pay and what you're willing to accept. Value for what they get is secondary to that conversation.

I've not yet read a reason for the top paid people to talk about their salary. It seems they would have more to risk than gain and it would hurt them in the next negotiation.

Not having spoken about my salary I've got no idea if I make more or less. It only matters if I am happy or not.

From what I can see, as a guy who's been in a few businesses, the salary amount starts off with just a simple assumption: we'll pay roughly whatever everyone else is paying for a certain job. You then go and find a bunch of likely-sounding candidates and bring them in to interview. (OT: This is a complete mess, because you're not as good at this as you think, even taking into account lordnacho's law.) You will fall in love with one or two of these people, probably not more. You'll then throw out a lowball number on the game theoretical rationale that they'll either ask for more or be happy with it. If there are special circumstances like the guy being a recent grad, we can say a bunch of stuff like "you're learning a lot from us, you need us more than we need you" (yeah, it's a shitty thing to say) and count on other bosses thinking similarly. The candidate can then take it or leave it, or if they have another offer, use that to get a bit more. But it's really a silly dance around a fairly static anchor, silly because people can get pissed off over small amounts of money. I've worked with more than one guy who thought he was a great negotiator because he managed to talk some guy down by a few grand, even though a $700M hedge fund makes that amount in about three hours.

Now why would wages ever change, if this is roughly what happens? I never came across a situation where there wasn't a huge queue of people wanting whatever jobs we put up. In fact, there was no real rationale for setting any particular salary, other than "that's the market". My thinking is that salaries really only go up when companies find zero suitable people for a given job, or when they get a particularly large number of offerees coming back to them saying they took some other job.

And what would create a situation where there were very few candidates for a job?

1) Collective action. Apart from the London Tube, this seems to be out of fashion. It also seems to be hard to organise something like software devs, given they live in very different cost areas scattered around the world.

2) Growth. When things are booming, companies get desperate. They can see the demand, customers are telling them they want product, but they can't get the staff they need to build the product. But since they can see the demand, offering a bit more to grab those staff is a bit easier on the executive mind.