Ever since Gordon Gekko uttered his now infamous credo, “greed is good,” many economists have been concerned with the long-term effects of the growing income inequality in the U.S. While free-market enthusiasts see things differently, inequality has become a recurring topic within our news cycle, as it reflects anxieties about the disproportionate influence of the so-called 1%, the plight of blue-collar workers and the dwindling middle-class.
As American society grows increasingly unequal, there have been several attempts to gauge the scale of current disparities and to forecast future developments. Using the latest available data from the annual Occupational Employment Statistics, we’ve looked at the gap between the highest and lowest-earning professions across U.S. metros and in each of the 50 states, starting May 2013, up until May 2017. While recent studies have considered income per household as their unit of measurement, we propose an assessment of wage disparities between different occupational groups at metro and state-level.
Our research shows that healthcare practitioners are the indisputable winners in today’s labor market, ranking as the most well-paid workers in most areas we’ve analyzed, outnumbering by a large margin those in management positions. In contrast, other groups pertaining to the care industry―including healthcare support occupations and personal care workers―still receive some of the lowest wages among all the professional categories, as defined by the Bureau of Labor Statistics. Those working in education, training or library positions have seen below-average income growth, as have sales-related occupations or community and social service occupations. Read on to see some of the other insight uncovered by our study.
The Most Unequal States and Metros in the US (Spoiler: NY Doesn’t Make the Cut)
When viewed across occupations rather than household income, it’s not the often-cited examples of income inequality, like New York or California, that come to the fore. According to our research, Alabama has the worst wage disparity at state-level, with a 94% gap between orthodontists, the highest-paid group, and food preparation and service workers, with the latter group currently earning only $18,380 a year. Florida comes in second; here, oral and maxillofacial surgeons received $288,450 in 2017, while graders and crop sorters were paid $19,320 on average. Ushers, lobby attendants and ticket takers in Maine had an average wage of $19,510, with surgeons’ salaries being more than 14 times higher.
Looking at metro areas across the U.S., we found that Bloomington, Ill., had the most pronounced inequality level, with fast food cooks earning $19,590 per year, 93% less than surgeons, 92% less than chief executives and 85% less than personal financial advisors. In the Boston–Cambridge–Nashua metro area, there is a $137,120 difference between the income of lawyers and shampooers, as the latter’s average wage is a paltry $19,210.
Due to skyrocketing rents and the overall cost of living, especially for working families, even tech workers are barely getting-by on six figure salaries in the Bay Area, while for others, the specter of homelessness looms large. In the San Jose–Sunnyvale–Santa Clara area, it’s slaughterers and meat packers who get paid the least, making $23,140 on average. At the other end of the scale, lawyers earn 756% more, and obstetricians and gynecologists receive a wage that is a whopping 947% higher.
As questions are being raised regarding some of the less desirable effects on the city that will house Amazon’s second headquarters, it might be useful to see how the company’s cradle is faring in terms of wage disparity. Seattle is challenging San Francisco as the most unaffordable city on the West Coast, and the growing inequality is showing up in recent values of the Gini index as well. Those working in food preparation and serving in the Seattle–Tacoma–Bellevue metro area earn 91% less than psychiatrists, and 90% less than airline pilots, copilots and flight engineers.
There are some unexpected occupations that end up padding our list of low-income professions. As state legislators are paid merely symbolic wages in several states, they end up filling the ranks of the least well-remunerated workers in places like Charlotte–Concord–Gastonia, N.C., or Portsmouth, N.H.
Physicians and Surgeons Make Up Most of Today’s Highest-Earners
Our study found that physicians and surgeons are currently the most well-paid occupation category across the country, having the highest wages in 152 metros of the 395 we’ve researched. There are, of course, income inequalities even among these professionals depending on where they happen to be practicing, or on their specialization. Consider an anesthesiologist working in Detroit–Warren–Dearborn, with an average salary of $230,540 before taxes, who earns 20% less than his counterpart in Elkhart–Goshen, Ind. Obstetricians and gynecologists in Chicago–Naperville–Arlington Heights, Ill., get $181,630 on average, while pediatricians working in the same area earn 15% less. And then, there is the gender pay gap, which leaves female doctors earning an average of $105,000 less a year than their male counterparts.
Four main reasons why the winners in today’s labor market have an edge over others are the high educational costs of these professionals, a lower chance of automation, institutional protection, and the high cost of medical care in America.
Perhaps the most obvious reason why physicians enjoy high salaries is that the high cost of going to medical school comprises a huge barrier to entry in time and money for most people. Only a few young people have the combination of discipline, ability, opportunity and money needed to become a doctor or surgeon, and these careers usually come with hefty student debt. Therefore, demand for doctors exceeds supply in most U.S. communities. There is also the fact that these professions involve a lot of high-stress work, and so surgeons and other medical professionals often retire early, necessitating a higher salary per year of work.
Furthermore, high-earning professionals such as surgeons, lawyers or managers have not had to worry about the encroachment of automation in the workplace that has rendered so many blue-collar jobs obsolete. Things might change, however, as several white-collar occupations are bound to be at least partially handled by robots or complex algorithms in the following years. As these jobs are automated, workers are likely to shift their focus to more specialized task, and here, employees in already high-skill professions will find it easier to fit into the new work environment.
Although Silicon Valley and the tech industry are notoriously reliant on foreign talent, other workers competing for high-income jobs face considerably less pressure from immigration than their low-wage counterparts, which in turn means that their pay is not as liable to be lowered due to the availability of cheap labor. To add to this set of advantages, while many professions are deprived of powerful unions that could advance their interests, high-earners can and do resort to lobbying through professional associations. These efforts typically take the form of blocking initiatives that would expand the pool of qualified candidates for a specific task to include workers from related fields, able to provide that service for a lower fee. For instance, dental hygienists could provide several services dentists usually do, for a comparatively lower price, but they are not allowed to own and independently operate their own practice.
Finally, the inflating cost of health care in the U.S. translates to higher salaries for top-end medical professionals, often because doctors, dentists and surgeons are partners and owners of health care businesses. Unfortunately, some of the other members of the healthcare industry still face an uphill battle for an adequate compensation for their efforts.
Managers Make 283% More Than Healthcare Support Workers
Care and education work are often viewed as playing a strictly supporting role in our economy, whereas management and entrepreneurship are often considered the primary source of wealth production. However, this oversimplification misses many of the benefits that care providers bestow upon society at large, including their role in terms of building human capital. The work of teachers, trainers, and childcare providers enables individuals to acquire the skills and knowledge necessary to enter the labor force, and care workers allow many employees to continue to be productive while aging or recovering from an injury.
However, care workers―from teachers, to childcare workers or personal aides―have to contend with the prevailing assumption that their vocational choice should be totally selfless and devoid of much in the way of financial rewards. This in turn leads to a serious imbalance between the growing demand for care work and the weak incentives for people to answer that demand by choosing care-related occupations. It also has a negative impact on existing workers trying to maintain a high standard of care in the face of their own financial struggles and the devaluation of their work.
While medical doctors and some technical occupations in hospitals are among the highest-earning in the nation, their colleagues working in healthcare support are part of one of the lowest-paid professional categories, with an average salary of $31,310 a year. By comparison, the mean average wage for management jobs is 283% higher. A home health aide working in the New York–Jersey City–White Plains metropolitan area, earning a mean annual wage of $24,240 makes 88% less than a petroleum engineer, but just 9% more than shampooers, the lowest paid workers in this area.
Personal care and service workers face an even more dire situation. Despite a 10% rise in their incomes since 2013, just above the average wage growth rate of 9%, they still only earn $27,270 a year. Personal care aides tasked with assisting the elderly or those with disabilities get paid $24,100 on average, with Ocean City, N.J., being the top paying metro area for this profession, with a $43,770 annual mean wage.
However, they are not only generally poorly remunerated, but also encumbered by a flurry of additional problems: they are frequently required to do overtime, skip breaks to tend to their patients and work night hours without any compensation.
Healthcare services in the U.S. are under increasing pressure to provide a variety of support and care options to many of the 50 million people currently 65 years or over, from retirement homes and communities, to home care. With the number of senior citizens expected to reach 80 million by 2050, there will be a growing need to attract more workers into the industry to look after us and our loved ones.
For decades, income inequality has mainly been a talking point among academics and pundits. Recently, the issue has found its way into the public discourse, although opinions on the real causes, extent and, above all, measures that would need to be taken to address it vary considerably. A rising tide may lift all boats, but Americans have seen modest wage growth since the 1980s. Those in the highest wage percentile have enjoyed a disproportionately large part of that growth, while those working jobs that have registered a significant spike in productivity have received only modest rewards in the form of single-digit wage increases. With the added strain of automation for both blue-collar and some white-collar occupations, the future will require complex solutions to help workers find their way in a changing labor market, and to better reward those offering essential services.
Methodology
Wage data, based on individual earnings by area and occupation, was extracted from the Bureau of Labor Statistics’ National Compensation Survey, Occupational Employment Statistics Survey, or the Current Population Survey. All self-employed persons were excluded, regardless of whether their businesses are incorporated or not.The data represents earnings before taxes and other deductions, and includes any overtime pay, commissions, or tips usually received. We’ve researched 395 metropolitan statistical areas (MSAs) and metropolitan divisions (including Puerto Rico), comparing mean annual wages for each specific job title, as defined by the Standard Occupational Classification or Occupational Employment Statistics.
