By SAMANTHA COONEY August 14, 2018
With more attention on gender and racial wage gaps in the workplace, some companies are left wondering whether pay transparency will help them achieve pay equality or cause more divides in the workplace.
Women’s rights advocates have urged companies to adopt full pay transparency policies — meaning that employees know what each of their colleagues make — as a tool to close pay gap, which is even worse for women of color. While white women in the U.S. on average earn 79% of what white men make, black women earn 63% of what white men make, Native American women bring in 57%, and Hispanic women — 54%, according to a 2018 report from the American Association of University Women.
But others fear pay transparency could spark jealousy among employees and reduce the number of staffers a company can hire. Pay transparency is still relatively rare in the private sector, according to Stephanie Penner, a senior partner at consulting firm Mercer, which works with companies on these issues. About 17% of private companies practice pay transparency, while 41% discourage and 25% explicitly prohibit discussion of salary information, according to a December 2017 report from the Institute for Women’s Policy Research.