In Sweden, where the average gender pay gap is only 6%, the right to know what anyone earns is enshrined in the country’s constitution.
Two years ago researchers from University College London found after surveying 15,000 people that Brits were seven times more likely to tell a stranger how many sexual partners they had had, or whether they had ever contracted a sexually transmitted disease, than to reveal their income.
In Sweden things are different. Your income is no secret; it’s public information.
It’s interesting how ideas about privacy differ between cultures: Swedes would not accept being watched by millions of surveillance cameras, like the Brits are. But they don’t mind their salaries being public information.
All you need to do to find out how much your neighbour, colleague or date earns is to pick up the phone to the tax authorities.
Everyone’s income tax returns are public and published every year. If you request someone’s returns they will get a letter in the post telling them it was you, but that is all.
You can also go to one of the tax authority’s offices and look up your neighbour’s salary on one of the public computers there. Then they will never know.
This is because the Nordic commitment to pay transparency has deep historic roots. Norway has published tax returns since 1863. They used to be posted on town hall walls or even read out loud on the village green.
In Sweden, the right to access other people’s tax returns is protected in the constitution as part of the world’s oldest freedom of information act.
Hence many Swedes prepare for salary negotiations by finding out what their colleagues make. It’s a way to get realistic expectations of what your skills and experience can earn.
Without an understanding of the salaries of your peers you are left simply to throw a number on the table in a negotiation over pay. This way of doing things seems to especially hurt women. Women often vastly undersell themselves in situations like this but are less likely to if they know what the man sitting next to them is earning.
The average pay gap in Sweden between men and women doing the same job is only 6%. However, we do not know how much of that actually has to do with salaries being public.
Does pay transparency lead to more equality? Or has pay transparency just become a practice in countries that already have low inequality levels? Can pay structures only remain public in societies where they are equal and hence don’t outrage people?
We do not know, but we might be about to find out.
We live in an age where technology is changing our ideas about privacy. And we are seeing a trend towards increasing pay transparency all over the western world. This change is driven primarily by the technology sector, where start-ups are experimenting with making salaries public. They are seeing good results and the practice is spreading.
A study of more than 70,000 US employees discovered that the more people knew about why they earn what they earn, especially in relation to their peers, the less likely they were to quit.
Economists tend to assume that having more information helps people make better decisions and the economy work better: why should pay be the exception?
Soon even the British might have to learn to talk about money.
- Katrine Marçal, inset, is a Swedish writer and journalist living in London