Sex, death, politics, money. No matter how much some things change, some taboos stubbornly live on. But when it comes to the matter of wages, our silence on the subject is only hurting ourselves.

As we’ve discussed, radical transparency – when implemented with care – can help build trust and accountability. This openness not only assists in identifying where we stand but also in charting the necessary path forward.

Yet while the public conversation around wage inequality has never been louder, we remain remarkably tight-lipped on the topic of pay. Opening up a dialogue about our salaries may just be the first step to putting us all on equal footing.

A raw deal

While workplace discrimination exists in many forms, the gender pay gap has become the most identifiable indicator of its prevalence in the workplace.

Right now in Australia women are paid nearly 14% less than men, according to government data – slightly above the average recorded across other OECD nations. While over time the difference is narrowing, progress is predictably slow across the developed world.

This may partly be attributed to a lack of accountability among some businesses. During this year’s International Women’s Day (IWD) for example, the rhetoric of British businesses was challenged by a Twitter bot programmed specifically for the occasion.

Any tweet celebrating IWD from an official corporate account was met with an automated response, publishing the official pay gap at that specific company. The difference – often a percentage in the double digits– painted a bleak view of the current state of affairs.

But more importantly, the stunt quantified the issue at an organisational level and provided a useful reminder: by measuring the problem, we can manage it. By bringing public attention to specific cases, the bot held workplaces accountable on a case by case basis and drew a line in the sand.

Indeed, employment experts suggest this kind of open wage dialogue could be an important weapon in fighting wage inequality. Government research highlights that within Australian organisations where there is wage transparency, the gender gap is narrowing by 3.3% per year. While this may be due to many factors, transparency is at least helpful in tracking improvement over time.

Hush money

The argument for greater openness is increasingly being recognised. Last year in Australia, the then Federal Opposition proposed outlawing pay secrecy clauses which explicitly prevent colleagues from discussing their pay packets.

In the financial services sector, clauses have historically been commonplace with one study estimating women at Australia’s largest bank are collectively being paid $500 million less than their male peers. The industry union has used such figures to rally for greater transparency and amid several industrial cases in which employees were actually dismissed for disclosing their pay.

The campaign has worked. Australia’s big four banks – ANZ, NAB, Westpac and the Commonwealth Bank – all recently scrapped their privacy clauses. Staff can now choose to discuss their pay packets should they wish without fear of facing retribution from their employer. Given the four organisations employ more than 160,000 Australians between them, it’s no small achievement.

Global view

Many countries around the world, including the United States and United Kingdom, have already nullified these provisions and have been clear in justifying why. The executive order from the Obama administration doing so in 2014 for example linked them to employer discrimination and market inefficiency.

But governments are also taking additional steps to proactively open up the conversation around remuneration. Many, including the UK, now require publicly-listed companies and other employers to publish the average pay ratio between CEO and worker.

Similar laws in Australia, in operation since 2012, explicitly do so on the basis of closing the gender wage gap. In fact, around half of all OECD nations have comparable mandates.

Germany has gone one step further. Female workers can not only find out how much their male colleagues are making but are now also permitted to demand the median wage of a group doing the same job.

Notably, some corporations are even using transparency to attract talent in an extremely tight labour market. PWC became the first big consultancy firm in Australia to publish its own pay bands in a bid to find the best people, although It’s worth pointing out the breadth of each band does little to specific pay per job. 

More to be done

While greater transparency is helping to hold feet to the fire, it is clear that the initiatives described above are just a start.

A recent OECD report for example points out that we’re far from anything resembling ‘radical transparency’. While around half of the 38 member nations publish company-wide figures, more can be done to turn information into meaningful action.

For example, at the moment only a limited number of companies are required to report any pay data at all, with most countries drawing the line at large publicly-listed entities. So too is the pay data these organisations provide often limited in nature.

Annual auditing of the information published and a strong independent regulator to oversee it are just two important future steps prescribed by the OECD. Any requirements need to be legally enforceable, it argues, and there needs to be penalties for those found flaunting the rules – as is already the case in Iceland.

Without these additional changes, workers aren’t actually in a better position to negotiate. Particularly when they come from groups that have historically been marginalised in the workplace. Instead it can mean they’re more acutely aware of their disadvantage with little practical means to address it.

The Norway Experiment

This conclusion is backed up by the experience of Norway, which has been trialling a form of radical transparency for years.

Norway’s tax office annually publishes every individual’s income on the public record. It also reveals the value of their assets and how much tax they paid. The idea is that in a country that leans socialist, trust must be maintained in the taxation system that supports it.

The experiment has largely been fruitful. Norway has a strong tradition of collective bargaining and a gender gap that is ranked third smallest in the world.

Naturally it’s difficult to conclude what came first: Norway’s relatively equal pay or the country’s unusual wage transparency. In all likelihood, these factors are mutually dependent.

However the Norwegian experiment also reveals the pitfalls of radical transparency and the natural threat it poses to personal privacy.

In 2001, the country digitised its records, making them instantly searchable from any personal computer. While records had been available for decades, this move eliminated the need to line up and leaf through the single book available in every municipality.

This digitalisation may have been a step too far. A study by the American Economic Association (AEC) found that the happiness of Norwegians actually became more correlated to their income level after 2001 by a factor of almost 30% – but only if that citizen had good internet access.

The hypothesis shared by the AEC is that those who could easily look up the incomes of their colleagues, friends and families, did so. Those who discovered their own incomes paled in comparison seem to have suffered emotionally because of it, even in the relatively equal nation of Norway.

In other words, the old axiom that ‘comparison is the thief of joy’ rings true. Significantly, in 2014, Norway made searches a matter of public record as well, making it known who had searched for your income. The volume of queries residents made on their neighbours fell immediately by 90% – making for presumably a far happier nation.

Lesson learned

The Norwegian experience paints a cautionary tale around the excesses of radical transparency. Specifically, it shows that wage data that is instantly available and that personally identifies individuals without their consent can do more harm than good. Careful protections will be required to ensure that workers are able to protect their own privacy.

More broadly, the examples suggest that information alone is not sufficient to prevent discrimination in the workplace. While it can serve as an important tool in bridging the gender wage gap for example, it needs to be carefully deployed along with other policies to measure progress, empower staff, and punish employers that deliberately mislead or discriminate.

Yet greater transparency clearly does have an important role to play. It helps keep workers informed of where they stand in relation to their colleagues. Making this kind of data public also makes sense that differences in pay need to be quantified before they can be rectified. Certainly, it helps enable countries to measure their progress to date and the effectiveness of their actions going forward.

Ultimately transparency is not a silver bullet, rather it is a means to an end. Properly informed and equally empowered, workers can finally begin to level the playing field.