Revealing salary ranges could narrow the pay gap but slow wage growth

The rise of the Wage Transparency Act in the United States could change the way American workers negotiate their annual salary in today’s rapidly changing labor market.

As more layoffs As the number of job seekers rises in the face of recession fears, we will see more positions in states mandating disclosure of salary ranges.

Colorado became the first state to require disclosure of salary ranges in 2021. Washington, California, New York City We have taken up similar mandatory disclosure laws. These measures usually affect companies with at least a small number of employees.

experts believe The advent of these laws It could be a tipping point in the long-running battle for pay equity.

“Shortly after Colorado demanded, there were some companies trying to be a little prettier, and their posts said they could do this anywhere in the country other than Colorado,” he said. Emily Martin, vice president of the judiciary at the National Center for Women’s Law, said, “When industry leaders like New York and California are demanding this, we can’t really do it.”

The rise of these wage transparency laws could lead to higher wages for minorities and women. The pay gap stems from many factors, including job preferences and unexplained disagreements.

But a growing body of research suggests the move could slow wage growth over time. “What we found is that people get less raises,” said Boback Pakzad Harson, assistant professor of economics and entrepreneurship at Brown University.

The nuances of increased wage transparency were emphasized A report co-authored by Pakzad Harson for the National Bureau of Economic Research“Is it worth squeezing the juice? In a way, I think you have to weigh those trade-offs,” he said in an interview with CNBC.

clock video See above for more information on increased wage transparency and potential implications.