Pay Secrecy Policies and Pay in U.S. Workplaces

Washington University, Saint Louis MO

Investigators

Abstract

Surveys indicate that prohibitions against discussing wages and salaries are widespread throughout U.S. workplaces. Yet little is known about the consequences of these pay secrecy policies. This project fills the research gap by fielding the first longitudinal survey of U.S. workers that includes questions about pay secrecy policies and workers? pay. The investigators will collect and analyze responses from approximately 3,000 workers to determine if and how the discouragement or outright prohibition of employee discussions about pay is related to who gets paid what. The survey results will allow the investigators to examine whether a lack of knowledge about co-workers? pay disadvantages women relative to men, and racial/ethnic minority workers relative to white workers, when it comes to negotiating pay. As a result, this project will contribute to knowledge about gender and racial/ethnic inequality in contemporary workplaces. It will also uncover the industries and occupations in which pay secrecy policies are most common and consequential for workers? wages, as well as other important outcomes, including the productivity and profitability of establishments that do and do not maintain pay secrecy policies. The project expands on recent theoretical and empirical research examining workplace factors that influence the distribution of organizational rewards. By examining whether information asymmetries introduced by management influence pay dynamics, the project will contribute to understandings of sources of wage inequality in the contemporary era, as well as existing scholarship on how managerial practices influence various types of inequality ? such as gender and racial/ethnic ? in the workplace. It will also expand knowledge of the organizational determinants of pay by uncovering if and how differential access to information in organizations influences wages and salaries. The project will accomplish these tasks through a longitudinal survey of U.S. workers that includes an oversample of employees in a state where a new law penalizes employers that maintain pay secrecy policies. By surveying workers before and after the law is implemented, the investigators will measure whether changes in prohibitions against discussing pay are associated with changes in pay in a context in which lawmakers proscribe such managerial behavior. For respondents in other states, the longitudinal design allows the investigators to measure whether a move to a more transparent workplace, or a change in a workplace?s policy about discussing wages and salaries, is associated with a change in respondents? pay. These survey results will inform policymakers at the state and federal level about the likely consequences of restricting pay secrecy policies.