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Median U.S. income is higher than any other large developed country, including Germany, France, the nordics, etc. More likely is that computers and automation h
by b9a2cab5 5y ago
Median U.S. income is higher than any other large developed country, including Germany, France, the nordics, etc. More likely is that computers and automation have enabled small numbers of people to have huge impacts. If one person can create a 10% better solution that solution scales infinitely without any supply constraints to the rest of the market, creating a winner take-all effect.
Scale of impact is historically why finance and law paid well, and it's also why management gets paid more than ever now. If you as a lawyer are 10% better than your competition and you have automation to make the grunt work un-fuck-up-able, you have much more time to make decisions on many more cases. That means the gains accrue to you instead of being spread among a bunch of mediocre lawyers, whereas previously without computers you might have been limited in how much time you could spend on high value work by communication and physical constraints.
In contrast, most workers are performing jobs that are either menial (paper pushing) or automatable, which means there is no way for top performing workers to highly differentiate themselves, since there's no barrier to entry. If you look at software engineers, there is a large gap in skill and business impact between even a Fortune 500 engineer and a FAANG engineer. That gap means 1. ability to highly differentiate yourself, at least to a degree and 2. skilled engineers have huge leverage and impact which translates to higher salaries. When the skill gap ranges from "doesn't understand what a linked list is" to "started a billion dollar company" the income distribution is bound to be heavily bimodal and heavily biased towards the top.
It is no coincidence that the advent of automation and software has both caused finance and law salaries to become more bimodal, and created a highly bimodal market for software engineers themselves.