Should you know how much your colleagues are paid?

There are generally two kinds of solutions: those that require public spending decisions and those that seek to eliminate bias through transparency.

Finland already publishes the taxable income of every citizen, an event that creates an annual media frenzy and has led to legal challenges on privacy grounds. But the tax data doesn’t give a complete picture, so now the country’s center-left coalition government wants to take the transparency mandate further in order to close the gender pay gap.

A proposed new law, according a Reuters report, would allow workers who suspect gender-based discrimination to access fuller disclosure so they can challenge any disparity. If adopted, the Finnish experiment will be closely watched by others. Copycats should proceed with caution; often laws that meet narrow goals have unintended consequences.

The question of how to ensure equal pay for equal work has been much debated over the years, the subject of books, academic articles and laws. There are generally two kinds of solutions: those that require public spending decisions and those that seek to eliminate bias through transparency.

In the first basket are systemic fixes, such as higher minimum wages (since women tend to disproportionately occupy low-wage positions), paid sick days or better maternity leave and child-care provisions so that women aren’t disadvantaged in their careers. Since women carry a disproportionate share of the child-care and home-care, even in our more enlightened age, a failure to put support in place often leads to greater disadvantages vis-a-vis male counterparts. Unsurprisingly, these fixes tend to create more equal societies.

Finland already ticks most of the boxes in the first set of fixes. It has some of the most generous parental leave policies anywhere (140 days of paid leave for each parent after a child is born, which reduces the “motherhood penalty,” though women take more leave than men). It was ranked the third most gender-equal country in the world by the World Economic Forum in 2020.

And yet the country counts among the EU’s laggards in the gender pay gap. Women earned over 17 per cent less than men in 2020, putting Finland near the bottom of the list of OECD countries on pay equality. That raises some questions about how important the pay gap really is when it comes to gender equality.