Starting in 2017, we’re going to know the gap between what most public corporations pay their CEO, and what they pay their median workers. That’s thanks to a rule built into the Dodd-Frank financial reform law, which the Securities and Exchange Commission finalized on Wednesday.
There are a lot of possible issues here: the costs and complexities of compliance, how accurate the disclosures will be, and what we intend, think, or hope the rule will accomplish. But there’s also an interesting reality underneath — namely, that the information is difficult to get in the first place. The compensation of CEOs has been public knowledge for a while, but we usually don’t know the pay for normal workers. Moreover, lots of Americans have a deep cultural aversion to making that information known. That’s where the “median worker” comparison comes in: The only personal information the rule gives out is the CEO pay. The worker pay figure is a statistical amalgamation.
So why is information about incomes — something so central and consequential to our lives — actually rather hard to come by at the aggregate level? Why do we have this severe cultural allergy to revealing or discussing what we’re paid with one another?
More pointedly: What would change, and would things be better, if all Americans’ pay was common knowledge?
First, however, a lot of pay information already is public. It’s known when unions are involved, since pay is collectively bargained for.
Read more: Why your salary should be public knowledge