Knowing what your coworkers earn doesn’t close the pay gap

Buffer, a fully remote social media company — “Slack is our HQ,” employees joke — made the unusual decision eight years ago to disclose every employee’s salary online.

The goal was to close the firm’s gender pay gap, which hovered around 4 percent in the early years of the initiative.

It did not entirely work, the company discovered.

It turns out that the gap between men’s and women’s earnings is a numbers problem; making those numbers public does not make them even.

America’s overall raw wage gap was 17.7 percent in 2020, though it is far bigger for Black and Hispanic women.

The gap is usually attributed to the fact that women work two-thirds of the country’s lowpaying jobs and that the fields dominated by men tend to offer higher wages.

But even when women and men work the exact same jobs, men earn more.

In recent decades, some experts have argued that there is an obvious means of closing the pay gap: making salaries public.

When women know how much their male counterparts earn, they are in a better place to demand the same compensation. And companies might feel pressure to equalize pay or better explain to workers how salaries are determined.

The push for these kinds of measures took on new urgency during the pandemic as more than 2 million American women left the workforce. Research has shown that women who take a year away from work can have earnings 39 percent lower than their counterparts who do not.

Joel Gascoigne, the CEO of Buffer, not only released every employee’s salary but also started using a formula to set pay, based entirely on the person’s role and hometown cost of living. He was not sure how his employees would react when he announced the idea, tepidly, at an all-staff meeting. But right away it was embraced by the team, which is now nearly 100 people.

When the initiative began, some Buffer employees wondered whether making the salary information public would hurt recruiting, because competitors could offer slightly higher pay to top talent. The opposite turned out to be true: Buffer’s job applications rose from 1,263 in the 30 days before the announcement to 2,886 in the next month.

But while the talent pool expanded and morale was boosted, Buffer’s gender wage gap continued to grow. In 2015, it was around 4 percent; by 2018, it was inching above 9 percent; and by 2019, it hit 15 percent.

At Buffer, salaries are still determined primarily by people’s roles, and many of the top leaders, including the CEO, were men. The well-compensated engineering team was also predominantly male. Gascoigne told his staff that he realized that transparency would not close the gap as he had hoped.