A few days ago, I started to look at a series of pairs of occupations (using publicly-available data from the Bureau of Labor Statistics) to see how well or how poorly they fared during the Bush years, measured according to inflation-adjusted hourly income in 2001 and 2006. Let’s consider now the complete set of 645 occupations for which average hourly income has been tracked from 2001 (the first year of Bush’s administration) to 2006 (the last year for which occupational income information is available). Below is a scatterplot which shows both the percent change in inflation-adjusted hourly income for an occupation from 2001 to 2006 and the average hourly income of that occupation in 2001 — for each of these 645 occupations.

Now, some of the dots for the occupations overlap one another because there’s an area in which most occupations reside. Plus, there’s got to be a quick and handy way to summarize the pattern of those dots. I’ve plotted the best-fit line as determined by ordinary least squares regression. (It turns out, if you’re curious, that there’s no large qualitative difference in the shape of the line if I allow it to take a curved shape.) The equation that describes the best-fit line is

% Change in Income from 2001 to 2006 = -6.4929 + (0.3361 * 2001 Hourly Income)

and that can be interpreted in the following way (please remember that all dollar amounts are in $2006 to adjust for inflation). If we imagine an occupation in which people are paid $10/hour on average in 2001, we’d predict that the occupation’s average hourly income would have changed by (-6.49 + (0.3361*10)), or (-6.49 + 3.361), or -3.13% from 2001 to 2006. That’s a decrease. If, however, we imagined another occupation in which people worked for $50/hour in 2001, we’d predict that the occupation’s average hourly income would have changed by (-6.49 + (0.34*50)), or (-6.49 + 17.00), or +10.51%. That’s a large increase. Another way to put it is that for every additional $3 in 2001 average hourly income earned by an occupation, the amount by we’d expect the average hourly income for such an occupation to increase from 2001 to 2006 would go up by an additional 1 percentage point.

This best-fit line is the line which minimizes error. But as you can see from the graph, there’s some variation in how well the line matches with actual occurrences (this is known as heteroskedasticity). For lower-earning occupations, there’s a lot of variation, with some occupations doing quite a bit better and some occupations doing fairly worse. But as we go up in income, there quickly become fewer occupations with a loss of average hourly income from 2001 to 2006. The really high-earning occupations of 2001 all did really well in gaining further income during the period between 2001 and 2006. In other words, low-earning occupations may do well or poorly (although the large number of lowest-earning occupations tend to lose and the moderate number of moderate-earning occupations tend to make only modest gains), but very high-earning occupations make uniformly large percentage gains.

You may be wondering whether there’s some additional effect, perhaps of classic supply and demand. Perhaps the occupations which had people flooding into them during the years of 2001 to 2006 experienced income loss, and perhaps the occupations suffering from fewer numbers of people to fill jobs experienced income gain. But no: when I introduced variables to account for changes in the sizes of occupations over the period, their effect was substantively indistiguishable from zero and did not alter the main effect of the 2001 income level for an occupation.

There’s something interesting and important going on here. It has substantively and unevenly affected Americans’ lives. The causes of this change need to be identified, the sources of variation within this effect need to be clarified, and the impact of this change on our economic and social fabric needs to be talked about. That conversation isn’t happening. We aren’t even collectively aware of the problem. All we know is that the people charge in Washington, DC keep telling us the economy’s going great, while the people who are working low and moderate-wage jobs keep saying that they aren’t better off. It’s time for a new administration with the courage to begin a national discussion about the growing income divide in our country — and what we might want to do about it.

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