Should Salaries Always Be A Secret?

Should Salaries Always Be A Secret?

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We’re taught as children that it’s impolite to ask how much money someone makes. But should salaries always be a secret? Maybe not.

Have you ever wondered if you’re being paid fairly at work? Here’s one way to find out: Ask your coworkers how much they’re making.

If you just shuddered at the thought of having that conversation, you’re not alone. For most people, talking about money is just as taboo as publicly talking about sex. It’s awkward and could draw negative attention.

There’s a widespread cultural tendency to be secretive about generating an income, and many employers want to maintain this culture of silence. However, there’s a growing trend toward pay transparency in the workplace—and valid reasons to discuss your salary with trusted coworkers. Here are some points to consider.

Yes, it’s legal to discuss your pay with coworkers.

Employers claim that salary discussions at work create a bad environment. They argue pay transparency will result in workplace drama, politicking, or reduced morale. Advocates, on the other hand, don’t buy these claims. They say employers strive to keep workers from talking about money so they can continue to pay them less.

But even if your employer doesn’t necessarily want you to share information about your pay, they still can’t do anything to stop those conversations from occurring.

In 1935, the federal government passed a law called the National Labor Relations Act. This law restricts private sector employers from creating policies that prohibit wage discussions. The bill also protects workers against retaliation if they choose to talk to coworkers about their salary.

A growing number of state and local governments are adopting laws that are even more labor-friendly. In areas like New York City, employers can’t ask job candidates to disclose their salary history, as this has the potential to undermine a candidate’s bargaining power. (Here’s a running list of states that have pay history bans.) This legislation gives all the decision-making power to workers when it comes to wage transparency.

Why Should You Talk to Coworkers About Your Pay?

1. Salary transparency may help address racial and gender wage gaps.

Advocates of pay transparency believe that gag orders on compensation talk help keep inequitable pay structures in place. If more companies analyzed their pay data by gender and race, they could discover implicit biases that position some people at a disadvantage. Researchers argue these companies would be compelled to take action based on those metrics. Women and minorities could then negotiate higher salaries if they knew how much their colleagues were being paid.

There’s a strong argument for why everyone’s salary should be revealed: When everyone knows how much people are paid, employers must justify their compensation decisions. Therefore, these decisions are less likely to be discriminatory.

To support equal pay, some companies publicly disclose the salaries of their employees. Courtney Seiter, the Director of People at Buffer, says transparency creates a culture of conversation where teammates feel empowered to share information and ask questions.”

Buffer puts the theory into practice. Since 2013, they’ve published every salary on their website and even created a salary calculator for job candidates interested in joining the company. According to Seiter, the system works—employees are happier, the compensation is consistent across every demographic, and candidates know what to expect before applying.

It’s not clear that a culture of secrecy directly causes wage discrimination, but gag rules can definitely play a role in perpetuating those systems. “Employers who keep pay secret are free to set scales on arbitrary bases or fail to give well-deserved raises because of social norms,” writes Jonathan Timm, a policy reporter with The Atlantic.

2. Salary discussions can help you negotiate higher pay.

If you’ve been underpaid, it can be hard to convince employers to pay what you’re worth. Sometimes salary negotiations are based on your previous compensation, or your understanding of market value could be skewed.

Thanks to our current legislation, however, employers might not ask about your salary history. The conversation about pay at a new job is more likely to be based on actual market rates for your role and experience level, rather than what other companies have paid you in the past. 

But it’s hard to improve your financial situation if you’re not comfortable talking about money. That’s one of the benefits of discussing how much you make with your coworkers. Talking about pay rates with a trusted coworker can set you up for success in future salary negotiations.

According to Fast Company, the more comfortable you are talking about money in a casual conversation, the better you’ll perform in more formal settings, such as negotiating your compensation package.

Learn from an executive how to boost your earning potential in a year or less.

3. Transparency can actually make you more satisfied at work.

Pay transparency can provide reassurance that you’re being treated fairly in relation to your peers, according to proponents. You also may find yourself in a more productive work environment when this information is out in the open; some research suggests keeping salaries secret is related to decreased performance.

It’s true that sometimes finding out how much you make compared to everyone else at the company can cause you to seek greener pastures elsewhere—but a culture of transparency can also make people less likely to quit. Even when they find out they’re paid below market rates, some employees will stay with a company just because they trust their employer.

One PayScale survey of 71,000 employees found that the main predictor of satisfaction at work is if people feel they’re paid fairly. But even underpaid workers reported feeling happier at work when they could talk about their compensation openly and understood the company’s pay scale. 

How to Frame Salary Discussions as a Win-Win.

According to experts, transparency can put both you and your coworkers in a better position during salary negotiations. And it’s good for companies, too. Not only can a culture of transparency increase job satisfaction for workers, but it also minimizes the risk of litigation when it comes to discrimination claims.

That said, there’s no denying that money is a sensitive topic, and it’s best to approach the conversation thoughtfully. People associate their salary with their value as a person, so it’s an emotional subject.

Keep the focus on the salary—just the numbers—and not the people involved. You’re not trying to dig for dirt or gossip during this conversation. You’re simply gathering data. You can also arm yourself with research from PayScale and to get a sense of market rates for your position and experience level in a particular geographical area.

What happens if salary transparency backfires?

An oft-quoted economics study from Berkley and Princeton found employees become less satisfied with work and are inclined to apply for a new job when they discover they make less than the market median for their position. This is typically cited as a counterpoint to pay transparency—but, as Jonathan Timm points out in The Atlantic, dissatisfaction isn’t always a bad thing. Sometimes the best way to advance your career is to leave your employer and seek a new position elsewhere.

A culture of secrecy keeps everyone in the dark—and possibly working for less than they’re truly worth. Transparency empowers employees to make informed decisions about their career.

Is leaving your job the key to making more money? Review an in-depth analysis of current job market trends.


Jessica Rohloff
About the Author
Jessica Rohloff

Jessica Rohloff is a freelance writer and marketing strategist who helps companies reach their target audience with quality content. Her work has been published in Alaska Business Monthly, TripSavvy, and Bus and Motorcoach News. For consulting inquiries, please contact her via LinkedIn.

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