Employers also complain that pay transparency will prevent them from being able to reward top talent with higher pay rises without risking other employees’ ire, as well as expose them to losing top talent from poaching by competitors.

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So, should you know what your colleagues are paid?

In economic theory at least, everyone should be paid according to the marginal value of the output they produce for their employer. As that value increases over time, thanks to skills accumulation and greater experience, employees should expect bigger pay packets.

However, unlike other markets, employers often have the upper hand in labour market negotiations because an “information asymmetry” exists whereby employers know a great deal about what they pay workers, but workers have almost no idea what salaries are paid.

This is not the case in all industries, of course. The public service, for example, is required to publish pay bands for all employees. It’s worth noting the gender pay gap in the public sector is also considerably smaller at 12 per cent, compared to the private sector gap of 17 per cent.

Advocates of gender equity have long argued the removal of pay secrecy clauses would improve women’s prospects for equal pay. Why? Well, because armed with information about their male colleagues’ superior pay, women could push for a bigger slice of the pie. Or alternatively, managers, fearing reputational damage from an inexplicable gender pay gap, might proactively just do a better job of ensuring their male and female employees are rewarded equally.

Of course, abolishing pay secrecy is no panacea to solving the entire gender pay gap, large parts of which are explained by women working in both lower status industries and jobs. But it is indeed plausible to think greater pay transparency could help many women negotiate higher pay, particularly those working in private-sector professional services jobs where pay gaps are largest.

Increasingly, sites like Glassdoor and LinkedIn are making it easier for employees to compare their salaries. But what could be easier than asking a colleague?

Sure, it may break one of society’s biggest taboos when it comes to talking about money. But awkward pauses and potentially bruised egos aside, such an exchange between workers can only increase both parties’ knowledge about pay rates in their industry. And knowledge is power.

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If Labor’s industrial relations bill passes – and it is still hoping it will by Christmas - Australian workers will start 2023 with a new workplace right to both disclose their remuneration to anyone they like and ask colleagues about theirs. Pay secrecy clauses in existing contracts will be void.

Under privacy provisions, you’ll still be able to refuse to divulge your salary. We just can’t be friends if you do. Indeed, if it were up to me, I’d push things further and follow the example of New York City, which as of November 1 made it mandatory for employers to publish salary bands in all job ads. Heck, after Labor’s law passes, why don’t we all just pop our salaries in our LinkedIn bios and see what happens?

For markets to thrive, information flow is key. We get to see the price of everything else, why not our labour?

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