The very different treatment accorded employees at the top versus those in the bottom or middle ranks has become a fact of life in many professional occupations.
The same scene plays out in Robert DeMeola’s Midtown Manhattan office every few weeks, not that it gets any easier. In walks a director or senior accountant, job offer in hand, threatening to leave for a hedge fund or big bank unless DeMeola can deliver a raise of 30 percent, sometimes more.
“It used to be once a quarter. Now it’s every month,” said DeMeola, chief operating officer of CohnReznick, a national accounting, tax and advisory firm headquartered in New York. “They expect you to negotiate.”
For much-less senior workers at CohnReznick, even those with a college degree or other postsecondary education, it is another story. “We never like to lose someone good, but it’s easy to teach someone those skills, and there are others in the marketplace who want those jobs,” DeMeola said.
The very different treatment accorded employees at the very top versus those in the bottom or middle ranks has become a fact of life at corporate offices, law and accounting firms and other white-collar bastions across the country.
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For the first time since the economic recovery began six years ago, white-collar professionals with specialized skills in fields such as technology, finance, engineering and software find themselves in the catbird seat.
But despite the steady addition of more than 200,000 jobs a month and a decline in the official jobless rate to a post-recession low of 5.3 percent, most American workers, including many college graduates, face lukewarm wage growth at best and limited bargaining power with bosses.
Strikingly, this feast-or-famine pattern does not simply pit people with less than a college degree against their more highly educated peers. It is also pronounced within the 32 percent of U.S. workers who are college graduates.
Most wage growth at top
Since the beginning of 2014, median wages for all holders of a bachelor’s degree or more have risen 2.7 percent, compared with about 2 percent for all workers. Among the top 10 percent of earners holding college degrees, however, wages are up more than 6 percent.
“If you want wage growth, you’re going to need a specific set of skills,” said Matt Ferguson, chief executive of CareerBuilder, a recruitment-software firm. “The B.A. gets you in the door — there’s not much unemployment for people with a college degree — but it doesn’t allow you the wage growth you’d expect.”
The pattern has been especially marked in more elite, even glamorous fields that typically require a college degree — or more — and that pay more than the national average.
A new study by the Bureau of Labor Statistics shows that pay near the top of the scale in fields such as art, entertainment and media was six times what it was near the bottom in 2014, compared with four times in 2007. The best-paid health-care professionals earn nearly four times what workers in the lowest tier make, compared with less than three times in 2007.
Nor are industries like finance and real estate, which have gilded New York City’s economic fortunes in recent years, immune.
For workers making less than $50,000 in these fields, wages fell last quarter, while their colleagues in the $75,000-and-above category enjoyed a 3.4 percent rise in wages, according to payroll-processing giant ADP.
“Overall employment growth is everywhere, but in terms of wage growth, it’s people making more than $75,000,” said Ahu Yildirmaz, head of ADP Research Institute in Roseland, N.J.
Lawrence Katz, a professor of economics at Harvard, called the phenomenon polarization. He said it was likely to add to the growing debate over income inequality in the United States as college graduates find themselves taking jobs that pay less than they expected to earn.
A December survey by CareerBuilder found that 37 percent of employers are hiring college graduates for jobs that once required only a high-school diploma.
The great exception to this trend is for holders of degrees in the STEM (science, technology, engineering and mathematics) fields.
STEM specialties have eclipsed the liberal arts as the portal to the executive track and ultimately the corner office in corporate America, even in fields where an English or sociology degree once provided entry.
“You can range further across industries and, crucially, get into management if you’re an engineer or know chemistry and math,” said Anthony Carnevale, a Georgetown University professor who runs the Center on Education and the Workforce. Now, “the engineer becomes the director of sales and marketing. In the old days, it was the generalist,” he said.
Even STEM graduates can lose out, finding that the skills they learned in school are becoming obsolete in rapidly evolving specialties like social media.
But the war for top talent among the likes of Facebook, Amazon and Google in media and technology or among Big Pharma companies and biotech startups is causing salaries in the best-paid jobs to jump, while lower-tier workers in those fields are registering only modest gains.
New engineers have long earned much more than humanities majors, according to the National Association of Colleges and Employers, which connects on-campus career services staffs and university officials with recruiters and businesses.
But that gap has been widening, with engineers from the class of 2014 now starting with salaries of $65,000 a year, compared with just under $42,000 annually for liberal-arts graduates.
Still, experts caution that simply studying something “practical” is hardly a guarantee of rising wages in today’s economy.
In fact, the National Association of Colleges and Employers data shows salaries for hospitality majors falling 10.6 percent over the past seven years, even though the leisure and hospitality industry has added nearly 2 million jobs since 2008. Education and human-resources graduates also experienced sharp wage declines.
Even some blue-collar workers who lack a college degree but have very specific skills are better off than college graduates who do not, according to Carnevale.
“If you have an associate’s degree or a certificate in a technical field like heating and ventilation, machine repair, carpentry or plumbing,” he said, “you’ll do better than the average B.A. holder, both at the beginning and 10 years out of school.”