So your good friend told you that he makes $150,000 a year, and you heard that Google pays $85,000 to fresh graduates. It's enough to make you want to find a new job and get mad at your boss for even offering a paltry $100,000 for your 10 years of hard-core experience, right... Well, right? Here's the funny thing about all these conversations, they are all basically BS. When you ask people how much they are making they lie. If they tell you without asking they lie. They lie on their credit card applications and they lie on their income taxes. Even people who are basically honest lie some of the time. To make things worse, stories grow. Let's say a friend of yours who graduated from MIT first in his class gets $80k right out of college (pretty darn good). Now you tell your other friend and so on and pretty soon a junior college grad is making $100,000 working as a tester.
More than once I've had employees come to me and tell me they have a friend at another company who is making SO much more and that the company's salary structure is screwed up and then after I look in to salaries and find that from every objective fact I can find my team is well above the norm what am I supposed to say. My favorite anecdote about this was a person who came up to me shortly after getting a raise and said, "Look I know that the other guys on the team at my level are making more than me. It talked with one of them and so I know. Your review said I did great, and I got a good percentage increase, but I think I got a lower salary when I started so I'm still lower." I won't say which country or company this happened in, but it's a true story as well as I can remember it. The rub is that he was already making more than any of the other people with the same level of experience as he had. He wouldn't have said it if he didn't believe it, so my suspicion is that somebody lied to him.
Why would people lie? Well, do you want your friends to think you are getting screwed by being paid less that you should? Since almost everyone thinks they are making less than they should most people are going to be a bit embarrassed to give the honest answer. By the way, I make slightly less than $10,000,000 per year (plus options).
