This column is featured in the 2023 Winter Carnival special issue.
The old adage goes, there are three things we shouldn’t talk about: politics, religion and money. It seems to have been ingrained in employers and employees alike that salary isn’t something that should be discussed. This year alone, I applied to over 50 jobs – and the vast majority did not disclose compensation in the job posting. Additionally, even as I was actively being hired for my current post-grad position, I wasn’t informed about compensation until I received my offer letter. Although salary isn’t the only factor to consider before taking a job, one would be mistaken to assume that people work merely because they want to. For many, we go to work because we have bills to pay and need the paycheck to survive, and perhaps, as an additional benefit, we also find some personal fulfillment in our work.
However, it isn’t just employers and recruiters that buy into the taboo surrounding salary disclosure. Any time we shy away from discussing our salary with our co-workers, family or friends, we engage in the same behavior, which can only harm us in the long run. Salary transparency is an important means of ensuring that you are being fairly compensated for your work and can help build trust in the workplace. By refusing to discuss salary — whether in the workplace, with your friends or with your family — we fail to reap these benefits and help perpetuate a system of silence that has allowed for women, people of color and other minority groups to be unknowingly paid less than their male, white counterparts.
Pay transparency is an issue that is increasingly on the forefront of the minds of new hires, particularly millenials and Gen Z. In a 2021 Bankrate survey, approximately 19% of baby boomers and 31% of Generation X surveyed stated that they had asked a co-worker about their salary, compared to 40% of millenials and 42% of Generation Z. Additionally, data collected by Payscale, an American-based compensation software company, shows that when companies are not transparent about salaries, younger employees are at a heightened risk of leaving a job after less than six months.
Although some may argue that pay disparities along the lines of gender and race have improved over time, pay discrimination is still a very real phenomenon. In 2019, CNBC reported that “more than half of women in the U.S. tech sector are being paid less than their male counterparts”, and in 16% of these cases, women were being paid more than $20,000 less than men. Furthermore, tech giants such as LinkedIn and Google have been directly implicated in settlements over pay discrimination, both opting to settle out of court at the cost of millions of dollars. The outlook is even worse for women of color, in which Black and Hispanic women make on average $4 and $5 less than white women when comparing median hourly earnings. Even for male employees of color, pay discrimination is still common, with healthcare giant Kaiser paying $11.5 million to settle out of court following allegations of pay discrimination against Black male and female employees.
Pay transparency is an important tool that employees can use to ensure that they are being paid what they deserve and ensure that when they aren’t, they can take the steps necessary to call out that discrimination for what it is: unfair and, in some cases, illegal.
These trends are partially due to the lack of trust that the “black box” of wage transparency creates in the minds of employees, especially those who are most at risk of facing wage discrimination — including racial minorities and women. After all, if you have no idea what the people you are working with are getting paid, it becomes near impossible to determine if you are being compensated fairly. In short, you cannot recognize a problem if you never have access to the information needed to know that there is one.
Some have expressed concern that pay transparency will cause employees to make it harder to retain employees, as people will leave for a different job as soon as they find one that pays more. However, if an employee is leaving because someplace else is willing to pay them more money for the same role, it begs the question if they were being adequately compensated at their current position. Another concern is that pay transparency may lead to a compression in employee compensation as managers fear backlash from affording certain employees benefits, raises and higher starting pay. Although studies have shown that pay compression does occur in some cases where pay transparency is implemented, data also shows that the factors contributing to pay compression, such as fear of employee backlash, can be counteracted by being explicit in how compensation is determined.
As younger workers enter the workforce and are increasingly unwilling to accept the status quo in terms of workplace norms, we should expect the standards surrounding pay and working conditions to shift accordingly. Even as topics that have been historically taboo, such as pay, are becoming acceptable conversation topics, it is vital that employers recognize that these shifts are increasingly necessary to build trust among employees. What’s more, I urge those entering the workforce to continue demanding for more pay transparency from employers. Being willing to demand that you are paid what you deserve is not being entitled — it is recognizing your worth even if others won’t.
Natalie Dokken is an opinion editor at The Dartmouth.
