Equal Pay Transparency
In honor of Equal Pay Day, my colleagues Heidi Shierholz and Hilary Wething suggest a number of ways to close the pay gap between men and women, including raising the minimum wage, enacting mandatory paid leave, helping workers unionize, shoring up employment law enforcement, enacting immigration reform, and passing the Paycheck Fairness Act. I would add another modest idea: requiring employers to disclose relative pay rankings so workers can tell if they are paid more or less than comparable workers. This would allow future Lilly Ledbetters to quickly find out if they are being discriminated against. Like Heidi and Hilary’s suggestions, it would also put upward pressure on the pay of all lower-paid workers rather than closing the pay gap by dragging down the wages of lower-paid men.
Employers will likely cite privacy concerns and administrative costs as reasons to oppose such a measure. But the law need not require that actual wages or salaries be disclosed, just relative rankings. In any case, Congress has already placed more onerous burdens on unions, who have to disclose employee compensation in excruciating detail. You can also look up the pay of congressional staff, White House staff, and the highest-paid nonprofit employees, among others. Since the American Enterprise Institute recently used pay disclosure to tweak the White House, maybe they can join forces with us on this effort.
In the meantime, President Obama is taking meaningful steps in the right direction, signing two executive orders today that ban federal contractors from retaliating against employees who discuss their pay and requiring them to provide the government with data on employee compensation by sex and race.