Pay transparency isn’t just for the workplace—it’s for friends and family too
Guest blog by Jenna Thomas
“Do you mind sharing how much you made in your last job?”
I was surprised—and thrilled!—when a new friend asked me this very personal question the first time we met up for coffee.
Like most millennials in the US, I was raised in a family that didn’t talk numbers when it came to income. Even as an adult—in a friend group that was very open about most things—the “how much do you make?” question was always posed under our breath, like it was still taboo.
So it was incredibly refreshing to be asked about pay out loud in a busy coffee shop. It felt bold, revolutionary even, to reply, equally out loud, “$129,000” (you didn’t think I was going to write an article about pay transparency without sharing the details of my own pay, did you?)
It was especially rewarding to hear that my new friend was going to use that information to help negotiate a raise.
Increasingly, people expect this type of pay transparency from their employers and from the companies where they’re applying to work. But as this interaction showed me, it’s equally valuable—downright powerful, even—for us to extend pay transparency from our workplace to our personal lives.
A pay transparency primer
The right to discuss wages with your coworkers goes all the way back to 1935 with the passage of the National Labor Relations Act. It might be a protected legal right, but it’s still deeply taboo, with a 2022 Indeed report showing that 63% of those surveyed have never asked a coworker about their wages. Shrouding pay in secrecy has been shown to perpetuate the gender pay gap and the racial pay gap—after all, those gaps are invisible if people know nothing about how their peers in different demographic groups are paid.
That’s the prevailing argument in favor of pay transparency in the workplace—making the gaps visible is the first step to closing them, and it holds employers accountable for inequity.
In particular, pay transparency could make salary negotiation obsolete if both sides are equally confident that a salary is fair. That could end or limit the bias that’s introduced during negotiation—a process that has traditionally favored men and hindered women.
Closing the gender pay gap has been the driving force behind workplace pay transparency laws, which are spreading rapidly across Europe and North America. As of the publishing of this article, eight states and six local areas in the US require employers to comply with pay transparency standards—and even where it’s not required, employers are increasingly opting to publish pay ranges on job descriptions. That makes sense, with the SHRM reporting this year that over 70 percent of survey respondents say they are more likely to apply to a job that lists salary and trust a company that publishes pay data.
Key takeaways:
Talking about pay with your coworkers is a legally protected right—but still culturally taboo in the US
Introducing pay transparency has been shown to narrow, if not close, gender pay gaps and racial pay gaps
Pay transparency laws are spreading, and employers are publishing pay ranges voluntarily even where it’s not required
Pay transparency—it’s not just for employers
While pay transparency becomes more common in the workplace, the money taboo remains trenchant among families and friends. My mom and dad drilled into me the importance of saving, investing, and budgeting, and yet I’ve never known how much money either of them make or have saved. It seems that approach is just as widespread among today’s parents: a survey of families making over $100,00 a year by Spectrem Millionaire Corner showed that only 17 percent of respondents planned to share their salary details with their children. Even more shocking, a survey by Fidelity found that over 30 percent of respondents didn’t actually know how much their own partner made.
It’s wild to consider that in the near future, we may live in a society where you know how much your coworkers, bosses, and executives make—but not your spouse, parents, or close friends.
It’s time to spread pay transparency beyond the workplace into the rest of our lives. The benefits of being open about money at home and with your friends are wide-ranging.
Financial literacy
Knowing how much money your friends, family, acquaintances, and colleagues make gives you a set of benchmarks. It’s not about comparing yourself to others and making a value judgment about where you fall—it’s about having more data so that you can accurately identify what’s fair for yourself and for others.
Achieving financial goals
Being open about your goals makes you more likely to achieve them—not just because you’re suddenly accountable to others, but because you’re giving your loved ones a chance to cheer you on. They may have priceless insight and advice to share based on their own experiences.
Plus, being open about your goals makes it easy for you to get on the same page with your friends when it comes to spending.
Just about everybody has been in the position of needing to turn down a pricey night out or girls’ trip because it doesn’t align with their budget or savings goals. By sharing these goals with your friends, you make it easier for them to accept alternatives like meeting up for a walk.
Reduced financial stress
Secrecy and uncertainty breed stress.
The most stressed and scared I have ever been when it comes to money were the times when I was too ashamed to tell anyone that I was struggling. As soon as I opened up, I could ask for help. And I got the unanticipated benefit of hearing that I wasn’t alone—that my dad had once been in a similar situation, or that my friends needed to start saving as badly as I did. That camaraderie alone makes it more than worthwhile to get vulnerable about money.
Key takeaways:
Talking about money with friends and family is still seen as taboo
Being open about your financial reality, goals, and challenges can help increase financial literacy among your family and circle of friends
Your loved ones can be a support system when you’re facing financial challenges or your greatest cheerleaders when you’re chasing financial goals—but only if you let them
Starting the pay transparency conversation: Lead with respect and empathy
Everybody is on their own journey with pay transparency and the willingness to talk about money. When you’re raising a sensitive topic, it’s more important than ever to be respectful. If you want your first conversation with your friends about pay to be just the first of many, make it a positive experience for everyone.
Boundaries are paramount
Respect your loved ones’ boundaries when raising the conversation about pay. If your friend has decided that specific numbers are off-limits, there are plenty of ways to talk about money without asking straight-out “What do you make?”.
Be curious, not judgmental
In addition to respecting your friends’ and family’s boundaries, creating a judgment-free environment is essential. Making your friends or family members feel judged about their finances accomplishes nothing and might backfire. After all, if they regret opening up and decide to never do it again, you’re only perpetuating the money stigma. If their financial situation surprises you or catches you off guard, approach the conversation with curiosity instead of judgment. You might learn something valuable.
Lead by example
Finally, lead by example—sharing your own salary (like I did in the intro!) goes a long way toward flipping the pay transparency stigma on its head and making people feel more comfortable divulging their own circumstances. And remember boundaries—it’s up to each individual how much they want to share. When you’ve created a safe space and shared your own details, it’s up to your friends and family whether they want to reciprocate.
Key takeaways:
Respect your loved ones’ boundaries and privacy
Create a judgment-free zone when it comes to money
Share as much detail as you’re comfortable with, and let your friends and family decide what they’d like to share in response
Start now—I dare you
Whether you’re deeply experienced in talking about money or have never revealed your salary to another soul, I challenge you to start a pay transparency conversation with someone you love this week. You never know what you may learn, and you may find that simply sharing your own salary with someone you trust kicks off some fascinating conversations.
Disclaimer: The Pledgettes is a financial community where people share their financial experiences. Experiences are powerful to share but this is not financial advice or what you “should” do. The Pledgettes does not provide specific investing or financial advice. The Pledgettes does not guarantee future results (our crystal ball to the future is broken today). You are the CEO of your money: learn from other’s experiences, build your Financial A-Team and confidently go forth.