Pay reform will spark a bloody war Soumaya Keynes Financial Times
On average, women are paid less than men and “they don’t like it”, says Soumaya Keynes. Is transparency the answer? In the EU, a major reform means that by 2026 “employees will have the right to hear ‘objective’ criteria for pay and progression, as well as what others doing work ‘of equal value’ earn”. Employers will have to put salary bands on job advertisements. But will it work? A recent Harvard Business School study finds that people tend to underestimate what their bosses earn and work harder when they find out. Transparency in job advertisements seems to have raised pay. But policies that shed light on the gender-pay gap are particularly tricky. Rather than raising pay for women, employers tend to lower it for men; finding out you are being paid less than your peers is bad for morale and productivity. Other consequences are likely to include outsourcing of jobs and more creative compensation. Ultimately, it will lead to more formal, rigid pay structures. Managers will have to work out how to measure achievements objectively, “an impossible task in some white-collar settings”, and have “tough conversations” with staff, who “may not be the best judges of their own performance”. Gender bias is wrong, but this will be a bloody battle.
Can AI save San Francisco? EditorialThe Economist
“Whenever a global economic transformation takes place, a single city usually drives it forward,” says The Economist. In the case of generative artificial intelligence (AI), that city is San Francisco, home to OpenAI, Anthropic, Databricks and Scale AI. Yet San Francisco is also shorthand for a “failed city”. Drug overdoses and homelessness have soared, the city’s population fell by 8% between April 2020 and July 2022, and more than 30% of offices are vacant. But the AI boom presents a golden opportunity. Overdoses have started falling and inhabitants are now better paid and more educated than pre-Covid. Average income is more than double the US average (although income inequality has soared). As investors spend big and finance types move to the city to “be close to the action”, house prices are rising. Some elites anticipate a broader transformation and are entering the political fray in despair at the“left-wingers” who have resisted “building houses, cutting business taxes, shrinking the bloated budget or funding the police”. City contests in March and November offer voters the “prospect of real change”. The AI boom may amount to less
