Straight Story: The end of worker discrimination

Economics editor Chris Farrell

TEXT OF INTERVIEW

TESS VIGELAND: It's time once again for our economics editor, Chris Farrell, to help you sort out what's smart, what's stupid, and what's the straight story. And Chris, you know, I, and I think a lot of other folks, have had a hard time understanding a recent Supreme Court ruling. And the bottom line here is that the justices made it tougher for workers to sue their employers for discrimination in what their paid.

CHRIS FARRELL: That's right. And the woman at the heart of the case, she learned that for almost 20 years, she'd been getting paid less than her male colleagues.

VIGELAND:
But she didn't find that out until quite a bit later. Yet, the court says that a worker has to file a complaint within 180 days. So this woman was out of luck. Frankly, 180 days? That's nuts.

FARRELL:
It's a bad ruling. And I agree with Justice Ruth Bader Ginsburg's descent. She basically said most salaries are kept so secret. It takes a lot longer than 180 days to realize that there is discrimination at work.

VIGELAND:
Right.

FARRELL:
So Susan Reed, she's a fellow at the Alicia Patterson Foundation. She came up with an ingenious solution in her New York Times op-ed piece. Congress should require businesses to polish all salaries. And here's the straight story. I couldn't agree more.

VIGELAND:
Whoa. So we would all know what everybody makes?

FARRELL:
Here's the idea. So you have a labor market. Markets work on transparency. If all the mandate is, is that companies post everybody's salary, and then the labor market will work better. And if there is pay discrimination, it will be readily apparent to everybody, and they'll have to be dealt with because pay discrimination is against the law.

VIGELAND:
For employees, it seems like there are two ways you could go. One, you could be relieved that you know what everybody is making because it can be a source of a lot of anger within workforce.

FARRELL:
Exactly.

VIGELAND:
If you find out that, you know, they're not making as much as their colleague did or, you know, what have you. But at the same time, if all those things were published, it seems like there could be a lot of concern about privacy.

FARRELL:
You know, there are genuine privacy issues that we all feel very strongly about. And, you know, there's that adult adage, we sure sometimes mention, you know. If you want the world to know what your salary is, tell your children when their young. I mean, they're just gonna go outside and announce it to the world. That's another way around. That's why we don't tell our children what we actually make. So at the same time, this notion of markets working better always intrigues me, transparency. And we talk about transparency with hedge funds, and we talk about transparency in lots of markets. And the labor market is not working as well as it should be, in a lot of cases. And this is one way that might make the labor market, once you've made the transition, once you become used to it, because remember, there's lots of things that we didn't use to talk about that you can't shut people up about these days.

VIGELAND:
Well, and we're happy to tell people what we paid for our homes. But we're not gonna tell them what our salary is.

FARRELL:
Exactly. And it used to be, if you go back to your parents' generation, my guess is that they didn't tell people what they paid for their homes.

VIGELAND:
Right.

FARRELL:
I mean, that wasn't considered polite to ask somebody. Today, if you bought a home, the first thing someone says, how much did you pay for it?

VIGELAND:
And you're more than willing to give that up.

FARRELL:
What kind of mortgage did you take out? What was your down payment? I mean, you sort of reveal all these financial thing. You think, it's my right to know these because I might be out there bidding. I need to know this. So there would be an enormous transition period. But it is definitely an intriguing idea. And it would allow for the labor market to work better.

VIGELAND:
All right. The straight story from our man, Chris Farrell. Chris, would you like to tell me what you make?

FARRELL:
I'll talk to you later, Tess.

About the author

Tess Vigeland is the host of Marketplace Money, where she takes a deep dive into why we do what we do with our money.

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