The Rock Star Effect

July 7, 2013

By John Rees

Are rock stars to blame for growing income inequality in the US? In many creative fields such as music, thousands of individuals toil away in relatively obscurity (and poverty) while a handful of performers become global stars (and fabulously wealthy in the process). A similar dynamic extends to professional athletes. While Lance Armstrong amassed a personal fortune worth an estimated $125 million before his fall from grace, for example, the earnings of most professional cyclists are far more modest. From bands to bicyclists, the income of top performers in their respective fields vastly increasingly outstrips those of their less talented counterparts.

There is growing evidence that the Rock Star Effect now extends beyond artists and athletes. Recently published data from the Bureau of Labor Statistics identified the 10 occupations with the greatest discrepancy between the top 10% of wage earners and the bottom 10%. Unsurprisingly, the Rock Star Effect is most pronounced among musicians, singers and related workers. Other occupations characterized by extreme inequality include sales occupations (real estate, advertising and insurance) and several professional occupations (judges and survey researchers). In each of these occupations, the top 10% of performers earn at least four times as much as the bottom 10% of performers.

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The rise of rock stars, regardless of actual profession, has been a growing source of media attention as income inequality has widened significantly during the past 30 years. According to the Congressional Budget Office, for example, income for the top 1% of households grew 275% between 1979 and 2007. During this same period, household income for the bottom 20% increased just 18%. Although the precise mechanisms behind the growing income inequality remain complex (and highly contentious), it’s clear that Rock Star Effect is a factor.

At the same time, virtually all occupations characterized by a parity of wages are low-skill positions (with the notable exception of pharmacists). From fast food workers to dishwashers, occupations with the least extremes pay are among the least glamorous, lowest-paying jobs. Despite the country’s growing wage inequality, it’s clear that we don’t want to live in a world without rock stars, real and otherwise.

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