This sounds like a pay optimisation for high performers. After all, good people aren't leaving for Mars but to an employer that pays them fairly(since they know what's their fair pay).

Besides, salary is not the only thing that keeps people or makes them leave. High quality management, pleasant work environment, office location and many other things are also part of the decision making.

In fact, hiding salaries is a welfare scheme for low performing businesses. It will eventually degrade the quality of the society since it's not meritocratic and only sustainable due to information disparity between employer and employees.

The margins of a company shouldn't be coming from the employees tricked into working for less than they can get.

Information asymmetry favors those that have the info. That would be your employer not you.

The workaround is to formally give good performers a different job title with accompanying higher pay.

Or have discretionary bonuses

I guess that's a good way to get around the restrictions. However, that will undermine the intent at transparent pay fostering equality/fairness.

> The end result is a company giving pay transparency ends up either with a much bigger labor bill, or staffed by poor performers.

I think that a system based on secrecy and/or asymmetry of information won't last long, and in fact I think the current "chaos" happening in the labor market suggests that a majority caught on to what their "true" market value is despite salary secrecy and companies will have to deal with a bigger labor bill no matter what.

Market value << supply:demand

When it comes to salary pricing. Companies respond to "We need employees but can't find any" much more quickly than "Our compensations seems off market averages."

In companies making a good profit, salaries may go up in cases like this. But some companies may not be able to pay everyone the same they pay the best performers.

If such transparency is mandated throughout a region, the best talent can react in a number of ways: 1) They can leave the region. 2) They can all work in the same few companies, either those requireing top talent or consulting companies. (Or go solo.) 3) Employers can find alternative ways to compensate them. (Generous benefits, plenty of approved overtime, generes travel refunds or any other compensation that does not require reporting) 4) Top employees can scale back their effort, and either have more free time or do side hustles. Employers may even encourage this, as it may be preferrable to those people leaving.

Most of the above will make it harder to run highly innovative companies (presumably those that require top talent), and in the end, I suppose this will drag the economy of the entire region down.