Why Pay Transparency Alone Won’t Eliminate the Wage Gap Between Men and Women

No matter how you slice the data, women in the U.S. earn a lot less than men.

A typical woman working full-time makes 81 cents for every dollar a man earns, little more than the 77 cents she got a decade ago. Within careers, it can vary widely, with female physicians and marketing managers earning 71 cents, while female registered nurses are at 92 cents. A university degree doesn’t help, as women with a bachelor’s earn just 74 cents of every college-educated man’s dollar.

One of the popular solutions proposed for narrowing this persistent gap is pay transparency. There are two rationales for this. First, employers will be less likely to pay women less than men for the same job if salaries are known. Second, if a woman knows how much her male colleagues are earning for doing the same work, she’ll be in a better position to negotiate a higher salary.

The House passed a bill on March 27 designed to promote equal pay and transparency by, among other things, banning employers from asking applicants about their salary history and preventing them from retaliating against employees who compare wages.

Many states have already passed similar laws, while the federal government has issued a few regulations along these lines.

The question is, are they working? As an expert in employment discrimination law, including equal pay, I have my doubts about many of these laws.

No Salary Disclosure Required

Part of the problem is that with one exception — government employees — the laws currently in place to promote pay transparency do not actually require disclosure of individual salary information.

For example, the government regulation that has been touted as a pay transparency law prohibits federal contractors only from retaliating against employees who disclose their own salary. And states with the toughest laws, such as California and New York, use similar…

Read more