Want to Close the Pay Gap? Pay Transparency Will Help

Here’s what we know about salary transparency: Workers are more motivated when salaries are transparent. They work harder, they’re more productive, and they’re better at collaborating with colleagues. Across the board, pay transparency seems to be a good thing.

Transparency isn’t just about business bottom line, however. Researchers say transparency is important because keeping salaries secret reinforces discrimination.

“From a worker’s perspective, without accurate information about peer compensation, they may not know when they’re being underpaid,” said Emiliano Huet-Vaughn, an economist at U.C.L.A. who ran a study in 2013 that found workers are more productive when salary is transparent. Without knowing what other workers’ salaries look like, “it naturally becomes harder to make the case that one is suffering a form of pay discrimination,” Dr. Huet-Vaughn said.

For example, in 2017, the Department of Labor filed a lawsuit and investigation against Google. Their regional director Janette Wipper told the Guardian, “discrimination against women in Google is quite extreme, even in this industry.” The suit claimed that Google refused to disclose data on employee salary history, as required by equal opportunity laws.

Which brings us to the wage gap. Rather than a deliberate, methodical attempt to sabotage women’s earnings, often the wage gap takes on more subtle, but no less detrimental forms. For example, women are viewed as less likable when they negotiate. They’re also less likely than men to get what they want when they ask for a raise, according to Harvard Business Review.

Read the whole story (subscription may be required): The New York Times