**Country Example 8. United States: Getting rid of “pay secrecy” is a low‐cost intervention that can remove a detrimental source of information asymmetry for women**<sup>103104105106</sup>

**Program:** <mark>In 2014, then‐U.S. president Barack Obama issued an executive order and a presidential memorandum that required federal contractors to allow employees to share salary information and to disclose more details about what employees earn. The actions were an effort to address pay gaps between men and women, specifically targeting “pay secrecy,” a form of information asymmetry which can lead to women getting paid less for doing the same job as men. Almost half of U.S. workers are either banned or strongly discouraged by their employers from discussing salaries. While federal government pay rates were already transparent and based on a uniform standard, these policies did not cover contractors, who make up a significant portion of the federal workforce.</mark>

**Outcome:** While specific outcomes of the 2014 executive order are not known, evidence suggests that removal of pay secrecy policies is associated with reductions in gender pay gaps. A 2011 report from the Institute for Women’s Policy Research found that the gender wage gap for all full‐time workers was 23 percent. However, federal government employees, who generally have transparent and standardized pay bands, had a gender wage gap of 11 percent.

Pay secrecy may compound the challenge that women face in successfully negotiating higher salaries. A 2016 survey by the employment website Glassdoor found that 48 percent of men had negotiated their salary in their most recent job, compared to 32 percent of women. There may be signs of improvement, however, as a more recent 2019 Glassdoor survey indicates that these figures jumped to 61 percent and 58 percent, respectively, for men and women. A lack of information on how much male counterparts are being paid likely makes it even more difficult to negotiate. Increasing transparency can help women understand and ask for appropriate pay. More broadly, an article in Forbes magazine pointed to studies which showed that keeping salaries secret decreases motivation and performance, while sharing salary information increases performance.

**Lessons learned:** Although sharing information about salaries can seem contrary to social norms in many countries and cultures, evidence suggests that keeping salaries secret is often detrimental to women. Removing barriers to sharing of salary information, as well as requiring transparency in pay bands, is a relatively low‐cost intervention that can level the playing field for women in the workplace.

> 103 David Burkus, “Why Do We Keep Salaries Secret?,” Forbes, February 2, 2016, https://www.forbes.com/sites/davidburkus/2016/02/02/why‐do‐we‐keep‐salaries‐secret/.

> 104 “3 in 5 Employees Did Not Negotiate Salary,” _Glassdoor_ (blog), May 2, 2016, https://www.glassdoor.com/blog/3‐5‐u‐s‐ employees‐negotiate‐salary/.

> 105 Juliet Eilperin, “Obama Takes Executive Action to Lift the Veil of ‘pay Secrecy’ ‐ The Washington Post,” The Washington Post, April 8, 2014, https://www.washingtonpost.com/news/post‐politics/wp/2014/04/08/obama‐takes‐executive‐action‐to‐lift‐the‐ veil‐of‐pay‐secrecy/?utm_term=.2fcae87bbd03.

> 106 Jackson Amy, “New Study: Job Seekers Expect Salary Negotiation & Transparency,” _Glassdoor for Employers_ (blog), April 10, 2019, https://www.glassdoor.com/employers/blog/job‐seekers‐expect‐salary‐negotiation‐transparency/.

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