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Pay ranges on job listings are widening. It’s a ‘double-edged sword’ for job seekers, one economist says

Salary ranges are getting wider for certain jobs — particularly those in technology hubs and in states with pay-transparency laws.

Job listings in the pharmacy, medical information, scientific research and development, industrial engineering and software engineering fields are showing increasingly large pay ranges, according to a new study by Indeed Hiring Lab. 

While 45% of U.S. job postings in April 2023 included some salary information, up from fewer than 20% before the pandemic, only one in five of those postings mentioned a precise pay level, the report found.

The median percentage difference between the top and bottom salary on a job posting for a pharmacy role increased to 31.2% in April 2023 from 20% in April 2022. For software-development roles, it rose to 35.3% from 28.6%.

New transparency laws requiring companies to include pay ranges in job listings took effect this year in California and Washington state, and late last year in New York City.

The average base salary for a pharmacist in New York City is $140,230 a year, and for a software engineer, it’s $141,875 a year, according to Indeed data. 

“A majority of employers that offer some level of pay transparency in their job postings do so by publishing a proposed salary/wage range — ranges that vary widely by occupation, seniority, and geography, among other factors,” the report found, adding that “job seekers looking for lower-wage and/or in-person jobs are getting more accurate information in job postings than they were a year ago.”

Pay information is extracted from job postings on Indeed. Salaries advertised as being paid daily or weekly are omitted from the analysis, as are jobs that pay salaries below $7.25 an hour. Indeed tracked the median percentage difference between the top and bottom salary for U.S.-based job postings. 

New transparency laws requiring companies to include pay ranges in job listings took effect this year in California and Washington state, and late last year in New York City. Proponents of the laws say they are meant to help address gender and racial wage gaps. Roughly a dozen states have some form of pay-transparency law.

‘Job seekers looking for lower-wage and/or in-person jobs are getting more accurate information in job postings than they were a year ago.’


— Indeed Hiring Lab analysis

A report released in January by Revelio Labs, a provider of workforce data, also found some very wide pay ranges, such as these in New York: Société Générale
SCGLY,
+0.99%
posted an opening for a senior salesperson with a salary range of $135,000 to $400,000 a year, and Netflix Inc.
NFLX,
-1.60%
was offering $165,000 to $470,000 for security operations managers.

That report looked at nearly 90,000 job listings posted on large companies’ websites since the laws took effect in Colorado in 2021 and in New York City in November. They found that 80% of postings included salary ranges that fell within a reasonable industrywide range. 

A wide salary range on a job listing is a “double-edged sword” for job seekers, said Cory Stahle, the author of the study and an economist at Indeed Hiring Lab. 

While pay-transparency regulations aim to help address gender and racial wage gaps, wider pay ranges make that task more difficult. Posting wider salary ranges may give candidates more room for negotiation, but it also requires candidates to work harder to maximize their experience and skills to get the best possible salary. 

“When these ranges are getting wider, they’re getting less precise,” Stahle told MarketWatch. “The wider the range gets, the less good information you have on exactly what people are making within those jobs.”

If the pay range is too wide, it defeats the purpose of pay transparency, Stahle wrote in the analysis. 

Posting wider salary ranges may give candidates more room for negotiation, but it requires candidates to work harder to get the best possible salary. 

From April 2022 to April 2023, some industries saw pay ranges narrow for job postings, including those for child-care and dental positions, Indeed Hiring Lab found. One theory as to why these are outliers is that employers think more exact information, including precise pay ranges and detailed information about benefits, will help attract workers in competitive industries. 

Child-care job postings on Indeed rose by 61.6% from Feb 1, 2020, to May 12, 2023, according to the company’s data, and dental job postings increased by 59.2% over the same period. Meanwhile, tech hiring was on the decline, with postings for software-development jobs falling 5.9% from Feb 1, 2020, to May 12, 2023. 

There are some upsides to these findings: A wider pay range could lead to more opportunity for salary negotiation, Stahle said, and that could be an advantage to people entering the job market. 

Employers might be more willing to hire junior candidates or those with less experience at a lower salary and then train them for roles they’re having difficulty finding qualified candidates for, he said. He cited midlevel or senior software-developer positions as an example of where more junior candidates could land better jobs and salaries.

Levi Sumagaysay contributed to this report.

Related: What can I do to improve my salary? Am I being paid fairly? In a strong jobs market, here’s how to push for a pay raise.

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