Suze Orman says this one workplace taboo 'is how the system keeps us down' — here's why it could pay to combat the 'culture of secrecy' at your office
Americans should be able to talk about money freely — more than any other topic out there — says financial expert and author Suze Orman. Right now, that's far from reality.
"God forbid, we should know how much money everybody makes ... That, in my opinion, is how the system keeps us down,” Orman told Moneywise in an interview last fall.
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While many employers have long encouraged a “culture of secrecy” around wages, that's beginning to change. Some parts of the country now require companies to make salary information publicly available on job postings.
Four states enacted have pay transparency laws this year, bringing the total to eight states with salary range transparency laws and 15 others considering a similar legislation. Job hunters can now find out how much employers are offering for roles in California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island and Washington.
Yet employees also have a role in preserving the money taboo, and Orman says keeping quiet about money could be costing you.
Why it’s important to talk about money
The personal finance celebrity acknowledges it can be hard for people to open up about money, especially in the workplace.
“There's a hesitation about how much you have, how much you don't have. And money is still this topic that's very difficult to personalize and talk about,” Orman explains.
“One of the reasons it's very difficult for people … look at what everything costs today and then look at wages. They are not keeping up with what people need.”
In fact, despite growth in wages, workers are seeing a shortfall when compared with the effect of inflation on everyday consumer goods and services.
The Fed hiking interest rates has also made it more expensive for consumers to borrow, putting even more financial strain on Americans.
The decline in purchasing power is likely worse for women, who earn 83 cents for every dollar a man makes and often pay more for products. Department of Labor data shows that most racial minority groups earn significantly less on average compared to white workers as well.
Experts like Andrea Johnson, director of state policy, workplace justice and cross-cutting initiatives at the National Women’s Law Center, have long been pushing for pay transparency laws in order to help fight gender and racial wage gaps.
But until recently, that change has been slow going. California is now the first state to require companies with more than 100 employees to show their median gender and racial pay gaps.
“I think we're in a moment of cultural change in the last few years, where employers are realizing that it's actually to their advantage to be more transparent about pay,” says Johnson. “Transparency is power,” Johnson says.
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Companies are finding loopholes
There’s been some dispute over whether these pay transparency laws will provide much benefit to workers.
“There's definitely a culture of secrecy in the United States,” says Johnson. “That comes from a lot of different directions. But it's definitely coming from employers that have long felt that it's to their advantage to keep pay and how they set pay secret.”
Right after New York's law went into place, certain NYC employers started to find loopholes, like using external search firms or hiring workers through word of mouth instead of job advertisements, reported CBS News.
Others simply offered very broad pay ranges. Back in the winter, The Wall Street Journal was advertising for an executive producer role with a salary range of $50,000 to $180,000.
Meanwhile, some companies have reportedly barred remote work applicants from Colorado, where the law stipulates that even companies that aren’t based in the state follow its transparency requirements for Colorado applicants.
Although analysis from the National Women's Law Center shows that more than 1-in-4 U.S. workers — amounting to 44.8 million Americans — are now covered by pay range transparency laws, what's actually covered ranges by state. Some states require salary postings on job postings, while others only provide this information upon request or during the application process. Some, like Colorado, may require companies hiring outside of the state to adhere to the same rules.
However, all these new laws could help usher in further change across the country — Bloomberg reported that several major companies, like Google and IBM, are now posting pay ranges on all their U.S. job postings.
Ultimately, though, Orman says employees must be transparent with each other, as well.
"Because you don't know if the person next to you who's doing less than you is making more than you. So yeah, we should be able to talk about money more freely than any topic out there. Because the topic of money is what affects every single one of our lives in every possible way," Orman explains
“That's how you get real about money. By talking about the truth of it.”
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
