Where I mix career information and career decision making in a test tube and see what happens

Tuesday, February 26, 2013

Occupations With Superstars


A few months ago, I blogged about how some people become superstars in their occupation by exploiting mass media and communications. For example, there are superstar chefs such as Emeril Lagasse, superstar doctors such as Sanjay Gupta, and superstar teachers such as Salman Khan.

In some occupations, however, it’s difficult to create a presence in the media or on the Internet that can lead to stardom. It’s unlikely that any TV news program will develop a segment on “welding news” and hire a welder to host it, no matter how telegenic and well-spoken some welders may be. The most popular instructional video about welding that I was able to find on YouTube has drawn 2.2 million hits, which sounds like a lot only until you compare it to some popular cat videos.

When I did the research for 250 Best-Paying Jobs, one question I investigated was which occupations offer the potential for superstardom. In this week’s blog, I’m reopening that question and basing my research on May 2011 salary estimates.

The way to identify occupations with superstars is to look at the difference between the mean earnings figure and the median figure. The mean is the algebraic average, so if the mean is a lot higher than the median, it means that a few star earners are pulling up the average. (They are doing the same thing that high-achieving students do to grades when they “ruin the curve” for average students.)

Here is an example that explains what I’m doing. Let’s say I’m looking at an occupation with only seven workers, and this is how their earnings are distributed:

Worker        Annual Earnings
A             $10,000
B             $20,000
C             $30,000
D             $40,000 (median: half earn more than D, half less)
E             $50,000
F             $60,000
G             $70,000

The median wage is $40,000, and if you do the math you’ll find that $40,000 is also the mean (average) wage. That makes sense because the wages are distributed very evenly here. But let’s say that worker G suddenly becomes a star and earns $400,000. The median does not change, but the mean now soars to $87,143. (That’s a difference of 118 percent.) Having a star earner in the mix of workers creates a big gap between the median and the mean.

So to compile the following list, I calculated the percentage difference between the mean and median wages of the occupations reported on in the Occupational Employment Statistics (OES) estimates for May 2011. The following list consists of those occupations with a difference greater than 25 percent.
It may not surprise you to find a number of occupations on the list that are related to entertainment, sports, or the media. Some of these unsurprising entries are Models (think of Tyra Banks), Radio and Television Announcers (think of Wolf Blitzer), and Broadcast News Analysts (think of Rush Limbaugh, if you must). Musicians, Singers, Actors, and Dancers would probably be on this list as well if annual wage figures were available.

But did you realize that some business occupations also have star earners? I believe that most of the business occupations that appear on this list have income that is based on who employs them. Those with superrich employers earn superstar wages.

This should be obvious with occupations such as Agents and Business Managers of Artists, Performers, and Athletes. A few agencies represent millionaire athletes and are able to pay their agents outstanding salaries, but most agencies represent clients with much more modest earnings. Something similar is true for Real Estate Brokers and Real Estate Sales Agents. Their earnings are based on a percentage of the price of the properties they sell, so those who handle expensive homes and high-ticket commercial properties earn sky-high commissions. Three more examples are Securities, Commodities, and Financial Services Sales Agents; Insurance Sales Agents; and Personal Financial Advisors.

What about Legislators? You may not know that there is enormous variation in the pay that these workers receive. In New York, they earn a median of $80,380, but the median ($19,360) is much more representative of what they earn in most other states. Of course, this low median figure doesn’t reflect the many lucrative lobbying jobs that lawmakers often cozy into after leaving public office.

I find it disturbing that the average difference (between median and mean) for all workers in all occupations is as high as 31 percent, especially considering that only 14 occupations have so large a difference. 

I looked at how this difference has changed since 2001, the earliest year for which I was able to obtain mean and median figures for all jobs in all occupations. Here the graph I generated.


You’ll notice that although both lines slope upward with the general modest inflation of wages, the mean increases at a faster rate, causing the gap between them to grow larger. Here is a graph of how that difference changes over those same years.


The present 31 percent difference is yet one more measure of the growing inequality in earnings that marks our present era as another Gilded Age. And, mind you, this difference is based solely on wages and salaries; it does not include the superstar earnings of those who are self-employed or whose earnings are disguised as capital gains.

2 comments:

  1. Awesome blog. I always like comparing jobsand salaries and I love the superstar aspect that you are talking about. I hope to read more articles like this soon.

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