March 21, 2017
While I understand the desire to ensure that rules are easy for businesses to comply with, I also wish to point out that there is a tremendous public benefit to the disclosure of pay ratios.
Increasing pay for the lowest paid workers results in greater economic benefit than an equal increase in pay for the highest paid workers. When low income workers who are struggling to make ends meet gain a pay raise, that money is quickly recirculated into the economy through purchases and payment of debts. This increased purchase power drives an increase in demand, which triggers economic expansion and a better climate for local business.
This rule can be seen as an alternative to legal requirements on pay scales. Through implementation of this rule to require disclosure of pay ratios, businesses subject to the disclosure will be placed under consumer pressure to reduce excessively large ratios. No legal or administrative action will be required to reduce ratios, it will result from response to consumer pressure.
While there is already tremendous consumer outrage over excessively large pay ratios between executives and front line workers, consumers do not yet have the information and tools available to them to exercise their wishes in the market. This rule will give that tool to the consumers.
Give them that tool, help consumers exercise informed purchasing decisions, and as a result our economy will be strengthened by the resulting gains to workers at the lower end of the pay scale.