Many workplaces prohibit or discourage their employees from discussing salaries. A new study by the Institute for Women’s Policy Research, in fact, found that nearly half of the survey respondents were not supposed to talk to coworkers about how much they are paid.
While learning that a coworker makes more can lead to resentment, transparency in pay structure can also help root out and remedy discrimination. The study’s authors point out, for example, that gender-based pay discrimination stands at about 11% in government service, where salaries are often public records, while the 23% gender gap in the private sector continues despite state and federal equal pay laws. The authors quote another study’s conclusion: “It is estimated that discrimination (rather than differences in occupations, industry, experience or education) is responsible for about 40 percent of the wage gap.” (Blau, Francine D., and Lawrence M. Kahn. 2007. ‘The Gender Pay Gap: Have Women Gone as Far as They Can?’ Academy of Management Perspectives, 21,1: 7-23.)
The now famous case of Lilly Ledbetter demonstrates the danger of secrecy. Ms. Ledbetter learned that she had been underpaid for years at General Electric; the Supreme Court said she sued too late, since the first such pay decision, in which she was paid less than her male counterparts, was well out of the statute of limitations period. Congress fixed the problem in early 2009, but no one can claim discrimination without having some facts.
It stands to reason that similar wage gaps affecting minority workers are also perpetuated by such secrecy laws. The good news is that this kind of workplace rule is illegal under the National Labor Relations Act. (My discussion here explains this more). Employees are entitled to discuss work conditions, including, or course, pay, without retaliation. With the law on the side of employees, they just need to get past their childhood admonitions that talking about money is rude.