Combating Wage Inequality – A Simple Solution, But why is Everyone Fighting it?

How to fight wage inequality?

Why is it important to talk about wage inequality? A simple solution to combating wage inequality might help, but there are challenges on the road.

  • Note: See a list of all companies refusing to hire in Colorado here.

Why is this important?

Everyone is aware that inequality has social and economic impacts, and can reinforce existing forms of discrimination and bias. It’s in vogue to be promoting fairness, economic stability, and social justice.  But the issue of wage inequality goes beyond the negative impact on individuals and families. It can impact society as a whole. When some individuals or groups are paid less than others for doing the same work, it can lead to financial insecurity and reduced purchasing power. This can have ripple effects on the economy, as people with less money to spend are less able to support businesses and drive economic growth. So it’s a prerequisite for not only a morally healthy society but a healthy economy.

The Colorado law that went into effect requires companies to transparently list their salaries in job postings. I don’t think the leadership at IBM, or the hundreds of other tech companies, have bad intent. I think the opposite.

The Problem of Pay Gaps

Americans have been experiencing unprecedented socioeconomic stratification in recent years. The gender pay gap is at the forefront of attention but sadly, it’s not the only form of the pay gap that is creating inequality in our nation. Ethnicity, socioeconomic background, political leanings, and even one’s personality traits correlate with pay gaps. In an analysis, researchers found that income gain for the top 1 percent was 31.4% from 2009 to 2012, while the bottom 99%’s income only grew by 0.4%. This has only gotten worse since the pandemic. All Americans are experiencing increased pay gaps when compared to a privileged elite.

The Solution to Wage Inequality

We like to think that only policymakers have the power to make a difference. That’s not true. We can’t change national laws, but we can adopt wage transparency, which reduces the exploitation of underprivileged working-class people. Sadly, leaders are already opposed to the Colorado law. That’s why change has to come from within your company. You need to do away with salary negotiations determining pay, which is a practice that disadvantages minorities, women, and people from low socioeconomic backgrounds. It’s a simple step to combat the growing economic divide.

The Research on Pay Gaps

Women are less likely to negotiate salaries based on the job interview process and job listing (source)Researchers found that subtle words you use on the job listing, or interview process, can lead to women making thousands of dollars less than men. It may be hard to believe, but our words signal what is and are not acceptable to different groups. And when we use ambiguous language around salaries in job listings or job interviews, we’re setting women up for failure.

The Nuance

In my research, I was able to find only one good reason to keep salaries hidden. There is typically a very skewed performance distribution. Recapping the research, someone told me, “The top 10% generate 90% of the value and largely finance the salaries of the lower 30% or even 50% of the performance distribution. In some industries and jobs, this is even more extreme. Making the salaries of the top performers public makes it easy for competitors to cherry-pick your staff by offering a more attractive package to the undervalued top performers. Even paying them double can make sense financially.”


Salary transparency is a direct way for companies to do the right thing and promote pay equality. It’s easy, has few risks, and requires no changes to existing laws.

I'm a 3x founder and my latest startup,, is addressing the existential risks to our information ecosystem. As an entrepreneur, coach, and mentor, my goal is simple: to help people question the narratives they tell themselves and ground their actions and beliefs in the principles of critical thinking. I've worked with hundreds of founders and executives as we tackle growth and emotional challenges through a holistic, critical lens that recognizes the complex, multivariate nature of problems.

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More