Why lower-class workers are less likely to negotiate for higher pay—and how it could cost some nearly $800,000

A new study reveals that lower-class workers are significantly less likely to negotiate for higher pay compared to their upper-class counterparts, and this reluctance can result in substantial financial losses over a lifetime. According to research led by Michele Gelfand, a professor of organizational behavior at Stanford Graduate School of Business, individuals from lower socioeconomic backgrounds face both a lower likelihood of initiating salary negotiations and greater potential for negative consequences if they do attempt to negotiate. The findings suggest that these disparities contribute to long-term economic disadvantages, potentially costing some workers nearly $800,000 over their careers. The research, published in the Proceedings of the National Academy of Sciences, was conducted in collaboration with Ying Lin of Hong Kong University and Jackson Liu of MIT’s Sloan School of Management. Gelfand emphasized that negotiation is a learned skill rather than an innate ability, and that social and economic factors influence who feels empowered to engage in such discussions. Her team explored how class affects negotiation behaviors through multiple studies involving thousands of participants across different settings. One of the initial studies analyzed data from over 7,800 Australian workers, using education levels as a proxy for socioeconomic status. Lower-class employees were found to be less likely to report having negotiated their salaries, even after accounting for other variables. These workers typically ended up with lower wages compared to those who did negotiate. Recognizing that education alone might not fully capture class dynamics, the researchers later conducted a study with more than 600 recent MBA graduates from a top U.S. business school. Despite receiving identical education and training, graduates whose parents had lower educational attainment were more inclined to accept the initial salary offers without negotiation. Many cited concerns about damaging new professional relationships as a reason for their restraint. In contrast, upper-class graduates negotiated modest increases, averaging around $6,450 more than their lower-class peers. While this amount may seem small initially, the cumulative effect over four decades is considerable. By retirement age, the upper-class graduates could earn nearly $800,000 more due solely to the act of negotiating for better compensation throughout their careers. Further experiments reinforced these findings. In one controlled experiment, nearly 700 participants completed a simple task and were promised a performance-based bonus ranging from 50 cents to $3. Although all participants started with 50 cents, those from higher-income backgrounds were more likely to attempt to negotiate for a larger bonus. Another study surveyed nearly 1,000 U.S. workers about their experiences with salary negotiations. Lower-class respondents expressed hesitation due to fears of backlash and a diminished sense of personal power. Gelfand noted that while the correlations observed in the studies were relatively modest, the consistency across different methodologies and participant pools strengthened the validity of the findings. The patterns identified in the Australian data further supported the idea that these trends might be relevant beyond the U.S., particularly in culturally similar contexts. However, she acknowledged that additional research is necessary to confirm these effects across a broader range of cultural and geographic settings. The research highlights a complex interplay between social identity and workplace behavior, suggesting that economic inequality is perpetuated not just by systemic barriers but also by individual choices shaped by perceived risks and power imbalances. As Gelfand and her colleagues continue to explore these dynamics, their work underscores the importance of understanding how class influences not only income but also opportunities for advancement and long-term financial security.