-
How much do you get paid?
-
Don't answer that out loud.
-
But put a number in your head.
-
Now: How much do you think the person
sitting next to you gets paid?
-
Again, don't answer out loud.
-
(Laughter)
-
At work, how much do you think
-
the person sitting in the cubicle
or the desk next to you gets paid?
-
Do you know?
-
Should you know?
-
Notice, it's a little uncomfortable for me
to even ask you those questions.
-
But admit it -- you kind of want to know.
-
Most of us are uncomfortable with the idea
of broadcasting our salary.
-
We're not supposed to tell our neighbors,
-
and we're definitely not supposed
to tell our office neighbors.
-
The assumed reason is that if everybody
knew what everybody got paid,
-
then all hell would break loose.
-
There'd be arguments, there'd be fights,
-
there might even be a few people who quit.
-
But what if secrecy is actually
the reason for all that strife?
-
And what would happen
if we removed that secrecy?
-
What if openness actually increased
the sense of fairness and collaboration
-
inside a company?
-
What would happen if we had
total pay transparency?
-
For the past several years,
-
I've been studying the corporate
and entrepreneurial leaders
-
who question the conventional wisdom
about how to run a company.
-
And the question of pay keeps coming up.
-
And the answers keep surprising.
-
It turns out that pay transparency --
-
sharing salaries openly
across a company --
-
makes for a better workplace
for both the employee
-
and for the organization.
-
When people don't know how their pay
compares to their peers',
-
they're more likely to feel underpaid
-
and maybe even discriminated against.
-
Do you want to work at a place
that tolerates the idea
-
that you feel underpaid
or discriminated against?
-
But keeping salaries secret
does exactly that,
-
and it's a practice
as old as it is common,
-
despite the fact
that in the United States,
-
the law protects an employee's right
to discuss their pay.
-
In one famous example from decades ago,
-
the management of Vanity Fair Magazine
-
actually circulated a memo entitled:
-
"Forbidding Discussion among
Employees of Salary Received."
-
"Forbidding" discussion among
employees of salary received.
-
But that memo didn't sit well
with everybody.
-
New York literary figures
Dorothy Parker,
-
Robert Benchley and Robert Sherwood,
-
all writers in the Algonquin Round Table,
-
decided to stand up for transparency,
-
and showed up for work the next day
-
with their salary written on signs
hanging from their neck.
-
(Laughter)
-
Imagine showing up for work
-
with your salary just written
across your chest for all to see.
-
But why would a company even want
to discourage salary discussions?
-
Why do some people go along with it,
while others revolt against it?
-
It turns out that in addition
to the assumed reasons,
-
pay secrecy is actually a way
to save a lot of money.
-
You see, keeping salaries secret
-
leads to what economists call
"information asymmetry."
-
This is a situation where,
in a negotiation,
-
one party has loads more
information than the other.
-
And in hiring or promotion
or annual raise discussions,
-
an employer can use that secrecy
to save a lot of money.
-
Imagine how much better
you could negotiate for a raise
-
if you knew everybody's salary.
-
Economists warn that information asymmetry
-
can cause markets to go awry.
-
Someone leaves a pay stub on the copier,
-
and suddenly everybody
is shouting at each other.
-
In fact, they even warn
-
that information asymmetry
can lead to a total market failure.
-
And I think we're almost there.
-
Here's why:
-
first, most employees have no idea
how their pay compares to their peers'.
-
In a 2015 survey of 70,000 employees,
-
two-thirds of everyone who is paid
at the market rate
-
said that they felt they were underpaid.
-
And of everybody who felt
that they were underpaid,
-
60 percent said
that they intended to quit,
-
regardless of where they were --
underpaid, overpaid,
-
or right at the market rate.
-
If you were part of this survey,
what would you say?
-
Are you underpaid?
-
Well, wait -- how do you even know,
-
because you're not allowed
to talk about it?
-
Next, information asymmetry, pay secrecy,
-
makes it easier to ignore
the discrimination
-
that's already present
in the market today.
-
In a 2011 report from the Institute
for Women's Policy Research,
-
the gender wage gap
between men and women
-
was 23 percent.
-
This is where that 77 cents
on the dollar comes from.
-
But in the Federal Government,
-
where salaries are pinned
to certain levels
-
and everybody knows
what those levels are,
-
the gender wage gap
shrinks to 11 percent --
-
and this is before controlling
for any of the factors
-
that economists argue over
whether or not to control for.
-
If we really want to close
the gender wage gap,
-
maybe we should start
by opening up the payroll.
-
If this is what total
market failure looks like,
-
then openness remains
the only way to ensure fairness.
-
Now, I realize that letting people
know what you make
-
might feel uncomfortable,
-
but isn't it less uncomfortable
-
than always wondering
if you're being discriminated against,
-
or if you wife or your daughter
or your sister is being paid unfairly?
-
Openness remains the best way
to ensure fairness,
-
and pay transparency does that.
-
That's why entrepreneurial leaders
and corporate leaders
-
have been experimenting
with sharing salaries for years.
-
Like Dane Atkinson.
-
Dane is a serial entrepreneur
who started many companies
-
in a pay secrecy condition,
-
and even used that condition
to pay two equally qualified people
-
dramatically different salaries,
-
depending on how well
they could negotiate.
-
And Dane saw the strife
that happened as a result of this.
-
So when he started
his newest company, SumAll,
-
he committed to salary transparency
from the beginning.
-
And the results have been amazing.
-
And in study after study,
-
when people know
how they're being paid
-
and how that pay compares to their peers',
-
they're more likely to work hard
to improve their performance,
-
more likely to be engaged,
and they're less likely to quit.
-
That's why Dane's not alone.
-
From technology start-ups like Buffer,
-
to the tens of thousands
of employees at Whole Foods,
-
where not only is your salary
available for everyone to see,
-
but the performance data
for the store and for your department
-
is available on the company intranet
-
for all to see.
-
Now, pay transparency
takes a lot of forms.
-
It's not one size fits all.
-
Some post their salaries for all to see.
-
Some only keep it inside the company.
-
Some post the formula for calculating pay,
-
and others post the pay levels
-
and affix everybody to that level.
-
So you don't have to make signs
-
for all of your employees
to wear around the office.
-
And you don't have to be
the only one wearing a sign
-
that you made at home.
-
But we can all take greater steps
towards pay transparency.
-
For those of you that have the authority
-
to move forward towards transparency:
-
it's time to move forward.
-
And for those of you
that don't have that authority:
-
it's time to stand up for your right to.
-
So how much do you get paid?
-
And how does that compare
to the people you work with?
-
You should know.
-
And so should they.
-
Thank you.
-
(Applause)
Yasushi Aoki
you wife -> your wife
Brian Greene
The typo at 5:09 was fixed on 11/27/16. "You wife" was changed to "your wife."