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Next year, 1 in 5 Americans will live in a state that requires pay transparency

Meghan McCarty Carino Dec 26, 2022
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Recruiters who include pay in job postings are already getting more traction, says labor economist Andrew Flowers. Alex Wong/Getty Images

Next year, 1 in 5 Americans will live in a state that requires pay transparency

Meghan McCarty Carino Dec 26, 2022
Heard on:
Recruiters who include pay in job postings are already getting more traction, says labor economist Andrew Flowers. Alex Wong/Getty Images
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In the coming year, about 1 in 5 Americans will live in a state that requires employers to disclose salaries in job postings.

Last week, New York’s governor, Kathy Hochul, signed a pay transparency law that will take effect in the state in September. Similar laws in California and Washington state take effect on the first of the year and are already on the books in New York City and Colorado.

While it’s a small number of jurisdictions, they could have a big influence. This could be a tipping point in changing how pay is perceived in the U.S., said Emily Martin with the National Women’s Law Center.

“One of the big challenges in addressing pay discrimination is the culture of secrecy that surrounds pay — including some sense of shame that a lot of people have in talking about how much they’re paid because they feel like it makes some sort of statement about them,” she said.

When Colorado became the first state to enact pay transparency in 2021, some employers tried to get around it by excluding Colorado applicants. But California, Washington and New York are among the biggest employment centers for tech, finance and entertainment.

“So it’s no longer going to be feasible for companies to ignore these laws,” said Julia Pollak, a labor economist at job site ZipRecruiter.

A recent survey of employers on the platform suggests these laws could drive wages up, she said.

“Most companies want to use the average of pay in the industry. But a significant share want to post higher pay because they want to be more competitive.”

Andrew Flowers, a labor economist with recruiting software company Appcast, found recruiters nationwide are already getting more traction with job postings that include pay.

“Because people care about pay,” he said. “It’s a big consideration.”

Not posting pay could soon become a competitive disadvantage, Flowers added.

“If there’s greater job seeker engagement, maybe these recruiters are going to take advantage of it, even if it’s not required in their state. Say they’re in Texas or Florida. Maybe they’ll put pay in the title anyway,” he said.

Although he points out that many employers have been a bit loose with their posted salary scales. After all, a $100,000 range is not particularly helpful.

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