For better or worse, office gossip has always been a guilty pleasure of working life for many: Who’s getting promoted? What departments are hiring? Why can’t we continue doing our jobs remotely?
One topic, however, has traditionally remained off-limits: A discussion of how much money people make. I can’t recall any workplace where my colleagues and I were willing to talk about the size of our paycheck. The idea of doing so always seemed inappropriate, out of bounds—and likely against company rules. I’m reminded of Lilly Ledbetter, the Alabama woman whose lawsuit led to the Fair Pay Act. After decades at Goodyear, she found out that she was woefully underpaid only after a male colleague slipped her a furtive note.
Times have certainly changed, and for anyone concerned about narrowing the gender and racial pay gaps, that’s great news.
This year, salary transparency laws went into effect in California and Washington state, requiring companies with 15 or more employees to post pay ranges in all job posting and to provide that information to any employee who seeks it out. This comes on the heels of a similar law adopted in New York City last fall (and the state, slated for this fall), which mandates salary-range disclosure for employers with more than four workers. (Colorado led this trend, adopting a pay transparency requirement in 2019.) Clearly, the momentum toward transparency is building, and we’re likely to see more cities and states follow suit in the months and years ahead.
These new laws are formalizing a trend that’s been percolating among younger workers for quite some time. When millennials began moving into the workforce a decade or so ago, the taboo around sharing salary info began to fade. This generation—a cohort accustomed to freely sharing details of their lives – felt perfectly comfortable discussing their paychecks on their runs to the coffee shop. They circulated spreadsheets on social media encouraging workers in different professions to disclose how much (or little!) they earned. They used that information to negotiate pay raises or at least to feel confident they weren’t underpaid.
Though this can all seem a little jarring for anyone who came of age when salary info was secret, the fact is that this openness can be a key component of ending discriminatory wage practices.
Consider, for example, the gender pay gap, which has remained stagnant for far too long: Women working full time in the U.S. are still paid just 83 cents to every dollar earned by men — and the consequences of this gap affect women throughout their life. If you include part-time workers, the gap widens to just 77 cents.
Of course, some of the reasons behind the pay gap are complicated – the result of a long history steering women into certain (lower-paying) fields as well as an economy that’s long undervalued women’s work. But one simple—and persistent—factor is that women are still paid less than men for doing the same or similar job.
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Employers have gotten away evading transparency, in no small part, because pay discrepancies have largely occurred under the radar. When workers aren’t aware of who’s making what, it’s hard to know if a Black woman, for example, is being paid the same as the white man doing the same job in the next cubicle. Those kinds of discrepancies aren’t good for anyone—employers as well as employees—so being aware of them is an important first step to fixing the problem.
Research has consistently shown that when employers are transparent about salaries, both the gender and racial pay gaps narrow. In government and union jobs, for example, the difference in pay between men and women, white workers and people of color, tends to be lower because salaries are public, and people can find out what jobs with equivalent titles and responsibilities pay. It’s great to see private companies being forced to be similarly transparent.
We’ve still got plenty work to do to fully close the racial and gender pay gaps that remain firmly entrenched. But having salary transparency laws in places like California and New York City – home to some of the nation’s largest employers—is indeed a welcome development and a promising step in the right direction to ensure that all workers are equitably compensated for their work. It might be ongoing fuel for office gossip—but it’s also promises to be a lot more consequential than that!