January 31, 2023
MIT Sloan Management Review recently published an article where Timothy Simcoe, Professor of Strategy and Innovation discusses how new salary transparency laws will affect the employment market.
With access to data on pay rates, working conditions and other hiring details, the new transparency laws have many wondering if the effect will be positive or negative on the relationship between employers and employees.
While some experts believe that these laws will encourage changes in compensation and trigger employee anger, some believe that employees will benefit from these laws. Other experts believe that the effects will be minimal or depend on the job type to have any impact.
Tim adds that, “At the margin, there will almost certainly be some substitution in this direction. I do not have strong views about how much.”
As these laws are fairly new, any implications with them will take some time to uncover before seeing any effect on the employment market.