An interesting piece (£) by Carole Midgely in the Times gives some more weight to the argument that workplaces are happier when everyone knows what everyone else earns.

She cites a recent Channel 4 documentary about a company called Pimlico Plumbers - where everyone was asked to write down their salaries and post them up on a noticeboard for all to see. Those who earned the most were then asked if they would reduce their pay to compensate the lowest earners. Scary prospect, but it worked. Carole writes:

Well, if I were to tell you that staff at Pimlico Plumbers say the workforce is happier since everything was flushed out into the open, would you be sceptical? I’ll admit that I was. But this is what I’ve been told, even by a man who took a salary decrease to bring up the pay of a female kitchen assistant. It also seems to be the conclusion of a Channel 4 documentary about the Pimlico experiment that was inspired by the Felt-Fair project, conducted at the Glacier Metal Company last century. According to Charlie Mullins, who started Pimlico Plumbers in 1979, the experience has changed his views on pay transparency and he thinks the country would be healthier if it was adopted nationally. He says:

“I honestly think that we need to change our wage systems, because I believe it should be out in the open. Times have changed. It worked for us.”

Why did it work? Well, perhaps this was because Pimlico Plumbers wasn't a den of nepotism and gender discrimination to start with. Midgley speaks to Sarah Veale, head of the Equality and Employment Rights Department at the TUC, who suggests there's a fairly strong correlation between companies that are transparent about pay and companies that are even handed about rewarding their employees.

Good examples, says Veale, of private companies that are open about pay are BT and Lloyds Bank. She says the practice tends to work best in companies that are well and fairly run but not in firms where management is poor and where there is an old boys’ network at play. The Court of Justice of the European Union holds that pay systems that are not transparent are particularly at risk of being found to be discriminatory.

Although the Pimlico Plumbers experiment - where the responsibility to even out the pay gaps was with the higher earners - had its faults, it becomes increasingly hard to find reasons for being secretive about pay. Why don't we routinely disclose our wages? Midgely comes across only one "valid" argument.

Last year Daniel Stilitz, a QC and trustee of the High Pay Centre, wrote that he had encountered many justifications for pay secrecy. One highly paid manager at an investment bank, for instance, told him that he feared his children might become a target for kidnappers. As Stilitz wrote: “One can’t help wondering whether, if you’re scared that people will find out how much you earn, you may be earning too much.”