Survey shows most Brazilians support making salaries visible

In Brazil, an extremely diverse country, discussion about shedding light on people’s earnings is linked not only to gender inequality but also to the lack of opportunities for marginalized groups in the workplace.
管理学
12 十二月 2023
Survey shows most Brazilians support making salaries visible

Fundação Getulio Vargas’ Sao Paulo School of Business Administration (FGV EAESP) and Talenses Group, supported by Talent.com, carried out an unprecedented survey, which showed that most Brazilians support making salaries visible as a way of tackling pay differences between men and women. The survey was conducted by Paul Ferreira, director of the Executive Master’s in Administration (MPA) at FGV EAESP; Luiz Valente, CEO of Talenses Group; and Tiago Molon, partner in Besse.

Salary transparency is not a new subject, especially if we look outside Brazil. In Canada, a pioneer in this area, there have been laws on this subject since 1996. In the United States, legislation has protected those who decide to ask about their colleagues’ salaries since 2004. In 2023, laws similar to Canada’s came into force in the states of California and Washington, a few years after Colorado and New York.

What are the practical effects of this measure?

A study conducted by economists at the University of Toronto found evidence that legislation reduced the pay gap between men and women by 30%. The problem is that this equalization often involved cutting men’s pay: the average salary of the professionals analyzed in the study (university professors) fell. Greater salary transparency is a recurring desire in many countries but it is not known whether the consequences will always be positive.

In Brazil, an extremely diverse country, discussion about shedding light on people’s earnings is linked not only to gender inequality but also to the lack of opportunities for marginalized groups in the workplace. Bill 1,149 of 2022, authored by federal representative Alexandre Frota, is currently going through Congress. Its aim is to make it compulsory for employers to disclose the salary range and requirements needed to fill vacancies.

Brazilians want more transparency

In our survey on salary transparency, only 5% of respondents were against this bill. Support was widespread among women and men, in different generations and in all regions of the country. This probably reflects a majority perception: 75% of respondents do not believe that companies are transparent about pay and they think the law ought to force them to disclose the salaries for job vacancies.

The concept of wage discrimination refers to situations in which two or more individuals with the same productive characteristics (work experience and technical ability) perform similar jobs but are paid different amounts. Our survey revealed that 61% of women have experienced such discrimination, while the rate among men is 49%. The imbalance also extends to minority groups, reinforcing the importance of mechanisms that promote equality and pay justice. Therefore, transparency of earnings is a fundamental tool in the search for a fairer and more equitable society.

Reducing gender disparity is seen as the most direct consequence of this measure. In Brazil, according to the national statistics agency, IBGE, women earn 78% of men’s income, on average. Black or mixed-race women earn only 46% of what white men earn. The situation has never been good, but it has worsened in the last decade: in 2013, Brazil had the 62nd widest gender inequality on the planet, according to the World Economic Forum. By 2022, it had fallen to 94th place out of 146 countries.

It’s a hot and universal topic. Most government programs in this area focus attention on the gender pay gap. Recently, the European Union issued a directive urging member countries to establish mechanisms to reduce the pay gap between men and women. There is no lack of legislation in this area. According to the World Bank, 97 countries have specific laws on pay parity.

Challenges and complexities

There is an urgent need to reduce the gender pay gap and the majority of those interviewed believe that legislation will be useful for this. However, that isn’t enough. They also believe that other groups could benefit, such as minority groups or young people. Another improvement would be to make the recruitment process more honest. This is a complex issue and not everything has become more transparent. In Germany, companies with more than 500 employees have been obliged to periodically publish their gender pay gap since 2017. This law has not been very effective, because even with this data it is hard for a person to prove to a judge that they experienced pay discrimination. So, in 2021, the courts imposed on companies the burden of proving that employees who filed a lawsuit are not victims of pay discrimination. In Canada, a new law, enacted in 2021, prohibits companies from asking about applicants’ salary history, punishes employees who discuss their salaries with each other in the workplace and makes it compulsory to publish salaries alongside job vacancies. The idea is for organizations to not base a potential new employee’s salary on how much they earned in other jobs, which might give them greater power to pay less. On the other hand, colleagues are not allowed to discuss their salaries in the workplace because this would create a toxic environment.

This complexity is reflected in the possible consequences that interviewees themselves see. More than 50% of them agree that salary transparency is a positive and fundamental practice but they understand that it can have some drawbacks. Employees who feel they have been hard done by when they find out their colleagues’ pay tend to slack off. A study released by the U.S. National Bureau of Economic Research says that conversations about salary increases have become more rigid, and in employers’ favor, because companies tend to use the “hands tied” argument, meaning that if they negotiated with one employee, they would have to negotiate with everyone.

There are valid doubts about the implementation of pay transparency, how it can be done and what it would mean – for example, regarding different incomes, among other criteria. People seem to expect a pay rise, but this won’t happen to everyone. Depending on how it’s done, as indicated by studies abroad, a pay cut could be the new reality. Is everyone ready for that?

In any case, lack of transparency has become part of the workplace culture. When asked if they would be comfortable talking about their salary with colleagues, only 30% of respondents said “yes.” Among friends and family, even if there is some resistance, people are more open. Why is that? There are a few reasons.

Hierarchy

When analyzing how hard or easy it is to discuss pay in the workplace, we see a trend. Junior employees are the most comfortable (only 20% disagree with the idea), while managers show the highest level of discomfort (32%). This phenomenon probably reflects managers’ fear that disclosing salaries could affect the working environment. This is not the case with senior management, who do not deal directly with front-line employees and are therefore less inhibited about disclosing their salaries. Therefore, hierarchy is one of the challenges to be faced. Leaders must be proactive in dealing with potential fears, concerns and frustrations that arise in the process.

Income

When looking at discussion of salaries and the amount people are paid, it is clear that there is a relationship. People who are paid more than R$35,000 a month and those who receive the minimum monthly salary (R$1,320 in Brazil) are the ones who feel most uncomfortable sharing their pay. Those who would be least uncomfortable are precisely those in the middle of the seven levels analyzed, with monthly salaries of between R$5,000 and R$10,000. This is easy to understand. Probably those closer to the minimum salary don’t like comparing themselves to colleagues who earn more, just as those at the top of the pyramid are afraid of the discomfort their high pay might generate among colleagues and subordinates.

活动

视频

Esse site usa cookies

Nosso website coleta informações do seu dispositivo e da sua navegação e utiliza tecnologias como cookies para armazená-las e permitir funcionalidades como: melhorar o funcionamento técnico das páginas, mensurar a audiência do website e oferecer produtos e serviços relevantes por meio de anúncios personalizados. Para mais informações, acesse o nosso Aviso de Cookies e o nosso Aviso de Privacidade.