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Salary Disclosure Debate is Heating Up

By July 23, 2021August 13th, 2021No Comments

An increased commitment to pay equity in recent years has ushered in a backup of new legislation geared towards closing the wage gap. In January 2021, the Biden administration announced pay equity as an administration priority. Outside of the White House, deliberations on how to close the wage gap are playing out in state legislatures, at pay advocacy organizations, and on blogs and social media communities across the internet. 

While there’s no quick fix to eradicating the wage gap, pay equity advocates are pushing organizations to implement recruitment practices that chip away at compensation gaps by reducing the likelihood that applicants will receive inequitable pay. 

Much of the conversation surrounds the issue of salary disclosure, specifically, when and if employers should disclose wage ranges when seeking to fill vacant positions. With 82% of organizations planning to hire new employees in 2021, the hot question is: At what point in the recruitment process will these organizations disclose salary ranges to potential hires? And why should they, anyway? 

The wage gap  

Women consistently earn less than men in the United States, taking home 82 cents for every dollar men make. The gap widens dramatically for women of color and people who have intersectional identities, including people with disabilities, and immigrants. 

The argument for salary transparency 

An anonymous group of organizers are waging a social-media campaign called #ShowTheSalary, publicly calling out nonprofit organizations that perpetuate “salary cloaking” by failing to include job salary ranges when recruiting for open positions online. 

The online guerilla campaign has elicited pledges from nearly 300 organizations that are committing to include pay and benefit details in job postings. 

Advocates for salary transparency argue that hiding salaries is a discriminatory process that perpetuates unfair pay. They assert that failing to include salary ranges puts job interviewees — particularly women and people of color — at a disadvantage when it comes to salary negotiations. 

Research consistently shows that women tend to negotiate lower salaries than men, while a series of studies from the Massachusetts Institute of Technology show that employers believe Black job seekers are less likely to negotiate their salaries. 

James Bessen, an economist at the University of Boston’s School of Law, has studied wage inequality and the effects of recent laws banning employers from asking for a potential hire’s salary history — a practice that is believed to perpetuate inequitable pay for minority applicants. 

In states where these bans exist, Bessen says, employers are more likely to include salary information in job posts, and people of color are more likely to change jobs. 

“A very large part of the residual [wage] gap is for things that aren’t related to productivity,” he says. “It’s related to the [salary] bargaining process—possibly [tied to] discrimination or other inequities,” Bessen says. “The data show that there is no detrimental effect from advertising salary, and there is a positive effect.” 

Several states — California, Maryland, Connecticut, and Colorado — have recently introduced wage range disclosure laws that require employers to provide salary ranges for open positions and promotions. Colorado’s law is the strictest, requiring that employers disclose compensation and benefits information for all positions in the job posting. 

Benefits for employers 

Would-be employees aren’t the only group who might benefit from salary disclosure. CharityJob, the UK’s largest charity-specific job board, recently shared that job posts disclosing salary figures receive twice the number of job applicants compared to posts that fail to include pay information. 

Embracing pay transparency may also speed up the hiring process by reducing the likelihood that a hiring manager will spend weeks on the interview process to be turned down by an applicant who is not satisfied with the offered pay. 

Platforms are demanding change 

Job platforms in the nonprofit sector are bolstering the campaign for salary transparency. Multiple job boards including NTEN: The Nonprofit Technology Enterprise NetworkCharityJobs, The Association of Midwest Museums, the Association of Fundraising Professionals, and the Minnesota Council of Nonprofits require that job postings include compensation information. 

Meanwhile, Canadian nonprofit job board, CharityVillage is facing a boycott by hundreds of individuals and organizations who are demanding that they disclose salary and benefit information in job postings. 

“By having access to accurate, representative compensation information upfront, job seekers are in a better position to find the right fit and mission for their careers,” says  Nonoko Sato, Associate Director, of the Minnesota Council of Nonprofits. “We recognize that salary transparency on its own cannot resolve inequitable hiring practices, but it is a critical step, among many, that works in tandem with other elements of a hiring process to close gaps by race, ethnicity, gender, sexual identity/orientations, and more,” said Sato.  


ABOUT THE AUTHOR

Lia Tabackman is a freelance journalist, copywriter, and social media strategist based in Richmond, Virginia. Her writing has appeared in the Washington Post, CBS 6 News, the Los Angeles Times, and Arlington Magazine, among others.

(Image by Comfreak from Pixabay)

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