Many people often wonder why do some jobs pay more than others. So it is no surprise that this same thought or question has crossed your mind.
Some jobs pay more and higher than others because of the industry, demand for the job, the location of the job, and the level of education and experience required for the job.
For example, a doctor is paid more than a waiter. This is because you need higher education and even more focus to become a doctor. Also, the profession of a doctor is specialized, and not just anyone can do it.
On the other hand, waiter jobs do not require higher qualifications, and the job is not very strict. All they need to carry out this job is mostly courtesy.
This is the easiest example to understand why some jobs pay more than others. In this article, we will discuss all the factors that cause the salary gap.
Article Road Map
- Why Do Some Jobs Pay More Than Others?
- 1. Higher Education, Higher Pay Job
- 2. More Experience, More Job Pay
- 3. Low Labour Supply, High Job Pay
- 4. Popular Industry, High Job Pay
- 5. High Job Demand, More Job Pay
- 6. Good Job Location, High Job Pay
Why Do Some Jobs Pay More Than Others?
This is simply because some jobs require work experience and higher qualifications, and the demand for the work is high.
The place of employment and the industry of employment also play an important role in determining the income for a job.
1. Higher Education, Higher Pay Job
The subtitle says it all. A person with higher qualifications will have a better chance of getting a higher salary.
A graduate will pay more than an undergraduate. The pay for the job also varies depending on the field you studied. Using the example of the work of an accountant, we will look at various factors that will affect the salary.
Entry-level accountants are paid $27,000 annually, while senior accountants are paid up to $111,000 annually. This is to say that they are paid according to their level.
Hospitality accountants have the highest salary compared to other industries. However, you can also say that salary varies with the industry you work in.
Location can also affect how high or low your salary will turn out to be. An accountant working in New York also receives $66,280 per year compared to Washington, where the average salary is $66,178 per year.
2. More Experience, More Job Pay
Work experience plays a vital role in determining salary in any field. In the same industry, an experienced worker will be paid more than an inexperienced worker.
Similarly, an entry-level job that doesn’t require much work experience will have lower pay, while a person working in a managerial position in the same field will get higher pay.
The key word here is the same industry. It is important you know that jobs vary from industry to industry. The salary for an entry-level job in the technology industry differs from that for an entry-level job in the biotech industry.
The starting income for a data analyst is $55,000 per year, while a senior data analyst is paid $100,000 per year. The above numbers may vary depending on the exemption rules below.
A data analyst is paid up to $91,035 per year while working for professional companies, which is their highest-paying industry.
Similar to industry, the location of a job affects pay. For example, a data analyst working in New Jersey will receive an average of $87,523 per year compared to an average of $55,655 per year working in New Mexico.
Most data analysts specialize in business. So their work experience is put in check alongside their educational experience.
3. Low Labour Supply, High Job Pay
This is one of the rules in economics. If the supply of the product is low, the product price increases. The same rule applies to the job industry. The lower the job offer, the higher the salary.
You can say that this happens because businesses need specialized professionals to perform certain duties and tasks. As a result of this, there is an increase in the demand for professionals.
But sometimes, for some reason, fewer professionals can handle this task. In this case, businesses are willing to pay more to hire a professional. For instance, as a result of the covid 19 pandemic, the demand for healthcare workers has increased.
But the offer is the same as in previous years. In order to attract healthcare workers, large healthcare companies have increased the wages of healthcare workers.
Education And Experience
Still using the example of healthcare professionals such as nurses to describe this. To become a nurse, you need a special course designed for nurses. Also, with high work experience, you have a better chance of being promoted to the head nurse position.
4. Popular Industry, High Job Pay
As we know, there are various industries worldwide, both the popular ones and those we have not heard about. These industries provide different services and products to consumers.
For example, the financial industry, such as banks, accounts, and tax advisors, deals with money-related services and products, and on the other hand, the construction business focuses on building infrastructure.
Do you think that a financial manager in a bank is paid the same as a financial manager in a construction company? Unfortunately, the answer is no, as one earns higher than the other.
Education and Work Experience
Finance graduates can expect to earn an average salary of $71,367 per year or $34.31 per hour in the US. This is to say that your level of education and work experience will determine how high your salary will be.
According to our analysis, finance graduates tend to earn the highest salaries in finance, technology, and hospitality companies.
New York has the highest salary for finance majors at $85,291 per year. So if you work in another country in the same field, you may earn lower but do the same job description.
5. High Job Demand, More Job Pay
Here we will talk about Data Analyst and its demand and salary.The high demand for this profession leads to higher salaries for the work.
Not only is it one of the highest-growing careers in a whopping 31, but many of these jobs are remote and very well-paid.
You can earn upwards of $80,000 to $100,000 right out of college. An experienced data scientist can earn well over $200,000.
6. Good Job Location, High Job Pay
A person working in Asia and Africa is paid less than in Europe or the USA. The reason is simply because of the economic situation of the country.
A doctor in Africa performs the same task as a doctor in the US. But the difference in the earnings of the two doctors will vary with respect to their locations. Also, the salary for the job can even vary between different cities of the same country.
Capital cities and business-oriented cities are known to be much higher compared to other cities in the country.
Each location has a dominant industry. Some areas are farmland, while other areas have many manufacturing industries. Some places are near mountains, while others are near the sea. And if you live near a seaport, for example, there will be a high demand for jobs related to shipping.
Education And Work Experience
Although all chartered accountants have the same education and experience, salaries vary from country to country.
There you have it. Some jobs pay higher than others as a result of some factors like location, industry, work experience, educational level and position.
If you intend on earning higher, you can consider getting a better work experience or change location to a place where the economic value is high.
Please tell us what you think and do not forget to drop your questions in the comment section below.