money

We Are One Step Closer to Pay Transparency

Helped along by certain high-profile celebrity mentions, the wage gap has gained traction as a talking point — yet, by and large, pay inequality remains difficult to verify. But there’s some indication that’s starting to change. Last month, the U.K. announced that all companies with more than 250 employees will soon be required to disclose how much their male and female employees are paid. And today, the Securities and Exchange Commission voted to order companies to publish the pay ratio between CEOs and employees.

Starting next year, most public companies in the U.S. will be required to disclose the difference between their median employee salary and what their CEO makes each year. The new rule, which has already received plenty of pushback from corporate lobbyists, stems from the 2010 Dodd-Frank financial regulation overhaul. The S.E.C. frames it as a helpful tool for shareholders, but it also represents an important and necessary step toward pay transparency — increased visibility will prompt more conversations (and policies) about income inequality. According to a recent Economic Policy Institute analysis, 50 years ago, CEOs were paid roughly 20 times as much as their employees — compared to 2013, when the average CEO made close to 300 times as much as their employees.

We Are One Step Closer to Pay Transparency