Inequality Exists Within Jobs, Too

When it comes to the business of inequality, the data is clear. In addition to the work of Stanford economist Nicholas Bloom, evidence mounts that differences in the fortunes of companies contribute to, maybe even drive, growing gaps in pay for workers around the world.

The economists’ data is rigorous and convincing, but usually very high-level. We know that gaps in how well firms pay is driving inequality, but can we see that playing out in the current job market? To find out, we got some data from job site Glassdoor. We looked at median salaries for four occupations across 326 companies: cashier, sales associate, marketing manager, and software engineer.

We expected the data to show clearly that income inequality exists between jobs — that the highest-paid jobs in lower-skill positions like cashier and sales associate would make far less than the lowest-paid professionals in the marketing manager and software engineer listings. Plotting the data confirmed that hypothesis:

You might be saying, “Duh!” This is hardly surprising. Still, seeing the range of low-skill jobs tightly packed under the U.S. median income, and the high-skill, high-demand jobs all sprawling above, provides a compelling picture of income inequality.

But there’s another compelling story here if we change the view. What if we look at the range of salaries for each job compared to the median salary for that job? In other words, for every cashier job listed, how much higher or lower was the salary than the median? An entirely different picture emerges:

Now we see that the pay disparity between the top and bottom sales associate jobs roughly equals the disparity between top and bottom software engineers. Cashiers show a similarly broad swath of potential pay. Even though, in the first chart, it looked like most cashiers and sales associates make roughly the same, some of those salaries are as much as 40% higher or lower than the median.

This spread confirms that pay inequality between companies is real. Some businesses are paying cashiers and sales associates (and marketing managers and software engineers) a lot more than others. In his Harvard Business Review article, Bloom argue that this is happening because of a “winner-take-most” economy, in which the successful firms lock in the best talent and pay them more.

A necessary caveat: This is a limited data set from a moment in time. It’s self-reported. We don’t deign to suggest that it proves anything, the way Bloom’s and others’ rigorous research does. But it’s still a nice bit of real-world, right-now data to provide a granular peek into what economists say is happening. Inequality is rising, and what you do profoundly shapes what you earn. But where you do that work matters too.The Big Idea