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<p>Actually, employees discussing pay rates with each other or not has economic effects as well. In a situation where the cultural norm is to keep pay rates hidden, employers have greater power over employees in setting pay rates, since an employee who is underpaid relative to his/her skill levels is less likely to know that.</p>
<p>Indeed, the tendency to buy status goods (expensive clothes, watches, shoes, jewelry, cars, houses, expensive schools, etc.) may just be an alternative way of signaling wealth indirectly (although imperfectly, since people sometimes go into foolish amounts of debt to buy status goods).</p>