Man holding business paper / Image: Unsplash
Image: Unsplash

Salary transparency: egalitarian future or nightmarish dystopia

Imagine a society where everyone’s salary is known. What your colleague, neighbour, or Tinder date takes home is only a click away. Politicians and public officials have to declare not only earnings, which might demonstrate a conflict of interest, but all taxable income. In the UK, this seems like a bizarre Black Mirror-esque future; here, salaries are a closely guarded secret. In Norway, meanwhile, it’s already a reality. Tax returns are available online for anyone to see. So, is this a step towards an egalitarian future, where transparency curbs pay discrimination, or a nightmarish dystopia where privacy is dead?

Firstly, there are obvious benefits to adopting this model. Firms with discriminatory pay scales would be exposed – unequal pay for the same work would be obvious. The gender pay gap, in firms of all sizes, would be obvious and seen by all employees. Likewise, older workers, who often receive higher salaries due to ‘experience’, would need to justify their additional earnings not only to their bosses but also their peers. Unions and employees alike would have additional information with which to bargain.

Another potential benefit would be the redundancy of ‘conspicuous consumption’ – purchasing things just to signal your own wealth or status

On the other hand, it would see very private information released to the public domain. People who choose to take less pay in exchange for more flexibility in their hours, a switch to part-time, or just a less stressful work-life would have their own financial decisions laid bare for the world to see. The link between pay and prestige could become even more pronounced, limiting people’s freedom to work less, if they want to.  Employers, not wanting to dishearten employees on lower pay, would also have a lot less scope to offer different salaries to different workers, which could see less differentiation based on ability or output. Dating and friendships could become even more stratified by income and class, with people’s financial status easily searchable online. Private companies would suddenly have a goldmine of personal data for advertising.

Another potential benefit would be the redundancy of ‘conspicuous consumption’ – purchasing things just to signal your own wealth or status. Publication of salary information would likely reduce our desire for products that serve as proxies for income and might reduce purchases of expensive watches or cars just to impress people. Basing the information on taxable income might also incentivise people to declare more income. People with large undeclared offshore earnings would look poor to their friends and neighbours.

Huge amounts of publicly available data become quickly overwhelming – real injustice might end up being lost amongst the noise

However, it might weaken the hand of inexperienced or young staff. Employers are often keen to know how much potential hires can make elsewhere, with their current salary serving as a proxy for this. With the ability to look up not only how much they made in their last job, but also if a potential hire is unemployed, employers could discriminate against people who aren’t already in good jobs. In the job market, information is power, and salary information would sit in the hands of potential employers as well as employees.

Finally, there’s the fact that knowing how much your colleagues earn is not always enough to enforce change. People under the age of 25 are entitled to a lower minimum wage than those over 25, meaning that in many companies young people already know that their colleagues earn more than they do for the same work. Rather than prompting uproar, it’s treated as a fact of life. Were we to know everyone’s pay, the inequality there might just become mundane as well. Huge amounts of publicly available data become quickly overwhelming – real injustice might end up being lost amongst the noise. Without a means of solving wage discrepancies, merely knowing that they exist is not enough.

A move by the government to mandate more transparency would be good for workers and good for equality

Overall, the UK’s secretive attitude to its citizens’ tax returns is a bad thing. A move by the government to mandate more transparency would be good for workers and good for equality. However, allowing the general public to look up individuals would be overkill and represents an infringement of people’s privacy. Instead, firms should be required to list all of their employees’ pay, with the names removed. For most employees, this will mean knowing what their colleagues earn, but it would remove the ability for neighbours or relatives to snoop. Knowing more about inequality might not be enough to tackle it, but it’s definitely a start. By making salaries plain to see, the UK can finally accept that we have a problem.

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