The disparity in Angelenos’ salary levels is wider than ever, raising the question: Why are some people paid truckloads of money while others barely make enough to live on?
Some reasons are obvious and inevitable. Lawyers will tend to make more money than bus drivers. But the widening income gap is especially noticeable here in Los Angeles because of the huge pool of lower-skilled labor.
“There is a large supply of waiters and waitresses, both because of the supply of immigrants and because of the people who are trying to subsist on that while trying to break into the entertainment industry,” said Edward Lawler, director of the Center for Effective Organizations at USC.
Some of the highest-paid professionals in Los Angeles are in the medical profession, where most jobs require years of education, training and interning as well as a large financial outlay. Cardiologists, dentists, pediatricians, orthodontists and psychiatrists all make in excess of $100,000 a year, on average, in L.A.
But not all good-paying jobs require high levels of formal education. A typical Web master in L.A. is paid $64,021 a year, even though a long history in the field is not required. The job, in fact, has only existed for a few years, and most Web masters are self-trained.
Stefan Chasnov, a senior consultant in the L.A. office of the Hay Group, a human relations consulting firm, said many Web masters are paid more than their skills and education might otherwise command because the heads of companies who are hiring them don’t fully understand the technology. “They don’t really know what it takes,” he said.
As more personnel directors catch on, the salaries of such workers likely will drop. Such a ratcheting-down happened in computer programming, where salaries also were high in the early years.
In addition to pay discrepancies between different careers, there are big gaps within the same job classifications.
Sanford Jacoby, a professor of management at UCLA’s Anderson School who has studied personnel practices, said someone who is described as “an accountant” can make anywhere from less than $25,000 a year all the way up to hundreds of thousands of dollars a year.
“You never know who they include as accountants,” Jacoby said. “It could include anyone from a bookkeeper to a senior financial vice president for a major corporation.”
As for L.A.’s growing gap between highest and lowest paid, Jacoby and others pointed to the increasing pattern of highly skilled employees leaving one company to take a higher-paying job at another company rather than settle for incremental raises averaging around 4 percent. Those in lower-skills jobs might bounce around, but not at steadily higher pay.
And despite recent organizational efforts, L.A.’s labor unions remain unable to bring up those wages. That contrasts sharply to cities like San Francisco, where almost all employees of large hotels are unionized and the leverage can be considerable.
Organized labor “is getting to be a less and less powerful influence,” said Lawler of USC, adding that unions serve to restrict the labor pool by making union membership a requirement of employment, thus pushing salaries higher than they otherwise would have been.
Another factor contributing to the pay gap, Jacoby said, is that more people are returning to college for higher degrees, either in the evenings or by taking time off work. When they get those degrees, their salaries tend to rise.
“There is a greater occupational dispersion wage dispersion than there was previously” because of those factors, he said.
But the overriding explanation for the large pay gap is a simple one. “A lot of it is just basic supply and demand,” said consultant Chasnov. “It’s just basic Economics 101 type of stuff.”
That explains why the average garment sewer in L.A. makes barely $20,000, while the average neurosurgeon makes about $484,000.
