Wage Transparency

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Wage Transparency

Postby Carebear » 02 Oct 2016, 04:26

Problem Statement:
Statistically speaking, women and minorities are paid less around the world. Even setting aside lower wage positions for jobs considered domestic for women or part-time positions, there still exists a gap for equally qualified workers performing the same tasks. This is an inequality that should be addressed.

In business, there will be bad actors looking for opportunities for personal gain regardless of damage to others. Governments create regulatory codes to protect consumers and workers from these bad actors. The issue is having enough regulation to properly provide protection where needed and not having too much regulation that it becomes Byzantine and unenforceable.

In the simplest way, how can this wage gap be addressed?

Proposal:
It has been proposed that Wage Transparency, that is making everyone's pay publicly available information, will reduce this gap.

Today, most employer and employee wage negotiations have an imbalance of power tilted towards the employer. This is due to information asymmetry about wages. A simple way to to address this imbalance in negotiations would be to make wage information public. While it does not directly address the gap and the typical underlying cause (i.e.: discrimination), it allows individuals to make better informed decisions and should have a positive impact on the gap.

Thoughts?
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Re: Wage Transparency

Postby V » 02 Oct 2016, 05:56

As a professional sales exec (now retired) I would have been outraged & sought alternative employment if my earnings had been made public information to anyone except relevant tax authorities. Of course if all employers had the same rules this recourse would not have helped:-) The negotiation over compensation is a private matter, in which as you say the employer has an advantage, but that merely demands of the employee that they do a real good job of it, male or female.
Although I do not approve of gender based prejudice as appears to be occurring in your summary of the current situation, I cannot see how it would justify such an invasion of privacy as a method of correcting the situation for the common good. I would have found it totally unacceptable & done everything in my power to circumvent the situation, hopefully with my employers connivance.
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Re: Wage Transparency

Postby Don Juan of Austria » 02 Oct 2016, 07:06

.
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Re: Wage Transparency

Postby OldBaldGuy » 02 Oct 2016, 15:03

Wage disparity in business is usually a myth. Women and minorities tend to earn more in the same jobs, especially at higher levels. In a training program I developed, I give an example where One Company pays all women 7% more than men. One Company pays men 25% more than women, and what should we do? The trick is that these 'two' companies is actually the same company. The reason is not pay disparity, but the large numbers of women who concentrate in lower paying jobs. We have a bi-modal distribution of men and women in the company, and ON AVERAGE women are paid less even though paid more position by position. The peal problem is people don't try to understand the problem before firing off a solution.

In the US it is already against the law to pay men and women differently. Using a company wide 'average' pay is a number that is completely accurate, but totally useless. I have helped companies defend against frivolous accusations.
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Re: Wage Transparency

Postby super_dipsy » 02 Oct 2016, 20:50

As luck would have it I was listening to a discussion on the very subject of pay and the 'gender gap', and the point OBG made was partly confirmed by a lady from one of the top financial consultancy firms in London. In her company, there is a 16% 'gender gap' in terms of average pay for women and men, but within grade the difference is 0.1%. The point she was making is that obviously the issue is that they do not have as many women partners as men, and these are by far the highest paid jobs. The reason for this seemed to be a combination of factors; lifestyle choice (eg taken a number of years off to have a family), belief in their own abilities, and lack of sufficient role models.

However although the discussion did not specifically address the question of wage transparency, the speaker certainly implied that sharing salaries within grade would only show that the company was obeying the law.
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Re: Wage Transparency

Postby Keirador » 10 Oct 2016, 08:22

Making every specific individual's pay public seems like a gross invasion of privacy. Might I suggest as a close alternative that large employers be required to provide wage ranges for various positions?
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Re: Wage Transparency

Postby The O » 10 Oct 2016, 18:53

I'm so glad that this problem has been solved in the last 15 years. Walmart is easily the largest private employer in the US (easily as they have 1.3 millions employees in the USA and 2.2 world wide). The following paragraph was lifted from NOW (which in all fairness has an agenda):

"In 2001, female workers earned $5,200 less per year on average than male workers. The company paid those who had hourly jobs, where the average yearly earnings were $18,000, $1.16 less per hour ($1,100 less per year) than men in the same position. Female employees who held salaried positions with average yearly earnings of $50,000 were paid $14,500 less per year than men in the same position."

Also, as of 2010 Women CEOs make 15% less than their male counterparts. It's great progress that this wage gap has been eradicated in the last 5 years.

So it's very nice to know that Walmart has fixed this in the last 15 years (though I can't find evidence of this) and that CEO wage gaps have been eliminated in the last 5 years.
Granted, I did cherry pick those two examples, but I'm happy to hear other stats that argue against the position. I do understand that the general idea of wage gap has been a little conflated, as women tend to take jobs that have lower wages. However, that does not actually excuse this. The 3 most common jobs for women are 1) secretary (office administration) 2) elementary and middle school teachers 3) registered nurse. Perhaps we can raise the wages for those three professions and that will help the over all gap.
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Re: Wage Transparency

Postby V » 11 Oct 2016, 17:08

I should say first I am equally glad that ridiculous pay injustices for women have been corrected. However addressing the last part of the previous post, suggesting particular professions could be additionally rewarded based on their popularity in a certain gender group, this in my view would set dangerous precedent & lead to unwanted outcomes.
Firstly what if another group (not gender related) wanted the same deal. May be a particular racial group or sexual preference group. It may sound ridiculous, but we have seen worse.
Also a management team fearing that such a proposal could actually happen, might actively recruit to correct a gender/race imbalance (on the very reasonable grounds of striving for equal representation) leading to reduced opportunity for the very folks that need help.
Imagine a scenario when an increased award was won based on gender imbalance & subsequently that changed to equal gender representation. Is there then an apparently reasonable case to reduce pay?
Every profession should get rewarded on the value it represents, not on who is represented within the profession. To meddle with the situation striving for artificial (may be desirable) results is a recipe for disaster.
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Re: Wage Transparency

Postby The O » 11 Oct 2016, 17:17

You are assuming that the system that we have now appropriately pays people based on their value or worth as a worker. This is sorely incorrect. Wages are actually fairly arbitrary. For example, our two presidential candidates makes huge sums of money and add very little to society. However, 1,000 garbage men make far less and provide far more value to society. I'm OK with wage corrections. Perhaps most people are not. However, most of the "low level" employees actually work harder and do more for a company and society than many "high level" employees. I know this is not popular (especially in the US where this "free market" obsession is like a religion).
Just my two cents.
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Re: Wage Transparency

Postby V » 11 Oct 2016, 17:29

You are accusing me of an incorrect assumption I did not make. I said that value equating to reward was desired, not in place. I agree there are still injustices that deserve attention & probably always will be, but tampering based on any other criteria than value just aggravates the situation.
Before you ask the inevitable question, "who determines value?" The answer is the customer, not the provider of any service.
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