What Texas Can Learn About Equal Pay from Massachusetts’ New Salary Law

More transparency about salaries can lead to both pay equality and employee mutiny.

By Laura RiceAugust 4, 2016 12:14 pm|

Justice Louis Brandeis‘s famous line, “The states are laboratories of democracy,” is often brandished by Republicans to justify what might be described as experimental policies. One such policy, from the laboratory of Massachusetts, caught our attention this week: The Bay State has become the first in the nation to bar potential employers from asking about applicants’ salaries before offering them a job. Signed into law by Massachusetts Gov. Charlie Baker, it’s being pushed as a model for other states in hopes of closing the wage gap between men and women.

Waco-based economist Dr. M. Ray Perryman told the Standard what a law like this might look like in Texas and what he thinks are potential pitfalls. His firm recently released its annual economic forecast for Texas, and things are looking up for the state.

“This is our long-term forecast we release every year and that lets you look passed the current oil situation and things like that, and Texas still looks very strong in that regard,” Perryman says.

Perryman says even with salary transparency, employers still need to address the gender pay gap.

“The academic studies – there have been a lot of them – have shown that it’s not as big as the 77 cent number that gets batted about a lot, if you adjust for a lot of other factors,” he says, “but there still is definitely a gender gap in the wage structure.”

While the new law in Massachusetts could help that gap, Perryman has concerns that some of the provisions may cause more problems than they fix.

“The idea of having to post a salary when you hire – that does cut away any opportunity to discriminate against people based on their gender and that sort of thing,” he says. “The other two provisions I had a little concern about – I’m a big fan of transparency but when everybody tells everybody else what they make you can get into some real employee attitude issues and that sort of thing there’s all kinds of things people don’t think about.”

The third provision, which requires equal pay for people whose jobs are of comparable character or operations, would not only be difficult to implement but could mean more people take their bosses to court, Perryman says.

“When you make it into two people with very different skill levels working the same part of a company, they might call that ‘comparable operations’,” he says. “It’s the kind of thing that allows itself to be interpreted in ways that will get people into the courthouse too much, frankly.”

Listen to the full interview in the player above. 

Post by Allyson Michele.