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Thursday, June 29, 2023
Median income
This blog is now over 20 years old, and as a mode of social media totally outdated. But you could say that back in the day, I was something like a proto version of an influencer. Having a bit of a "been there, done that" attitude has made me rather skeptical of the viability of being an influencer as your day job. But with lots of young people aspiring to that, and the influencer marketing industry estimated to grow to $21 billion in 2023, I had a hard time to express my skepticism in rational, mathematical terms. I had a feeling that it would be better to advise somebody to pursue a career in something more practical, like engineering, but how do you express the advantage of an obviously harder and maybe more boring career choice over a glamorous "get rich quick" one? After thinking about it a bit more, I finally realized that the answer might be median income.
In economics, the mean or average of something can be very misleading, because distributions usually don't follow what is called a "normal distribution". Inequality is a huge problem, and thus indicators like GDP per person end up being a lot bigger than median income. Median income is the income where half of the population has more, and half has less. Thus median income tells you a lot more about the typical person than an average, because the average is very much skewed by a few billionaires.
What I realized was that the median income of an influencer is zero, or very close to it. If you take any social media platform, be it TikTok, YouTube, Instagram, Twitch, or whatever, and list all the content creators on it sorted by income, at least half of them make no money at all or really insignificant amounts compared to the effort. Even if you sort out all the people who are just creating content for fun or out of some motive of self-realization, and only survey people who make at least a bit of money and thus think of themselves as "professional influencers", over half of them earn less than $10k per year.
If you look up the U.S. Bureau of Labor statistics on engineers, you will find that the different between mean and median wage is tiny. How much money the richest engineer makes depends on whether you consider people like Bill Gates and Elon Musk to be engineers. But what is relevant for the typical person is that the mean annual income of an engineer is over $100k. And even starting salaries are quite decent. I don't have precise numbers, but I do know that unemployment amongst engineers is low, globally. It is a better career choice not because of a tiny chance to become a billionaire, but because once you made it through the studies and got your diploma, you are basically guaranteed decent lifetime earnings. The career choice of influencer can't compete with that, it is far more likely than not to end in failure. The influencer career is equivalent to the careers aspired to by previous generations, like rock star or football player: The very visible success and affluence of the top 1% hides the fact that the typical person pursuing that career ends up penniless. Lottery player is not a career, and neither is influencer.
- posted by Tobold @ 10:54 AM Permanent Link
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This sounds like the same thing that people tell children about wanting to be a professional athlete, or an artist, or a musician. The world would be worse off if we didn't have people who pursue their passions. The reality is not everyone is the same so not everyone can live the same. In our modern societies I think that we over label people. "Influencer" seems like a tag that people give to anyone on social media these days. Is Lex Fridman an "influencer" or an engineer? Does it matter which label people apply?
I think that the best advice to give to children is for them to educate themselves. Whether that is getting a degree in chemical engineering, learning carpentry, or learning to weld. Then they can leverage that knowledge in multiple ways. Some may join the "establishment" and by that I mean the typical work for an existing company. Some may start new companies. However, some may blend lots of different things together such as working for a company while doing videos on their own time while they cultivate their following and develop their abilities. Personally I think that is to be commended not lambasted with the tag of "influencer".
I notice a trend in the traditional media to use "influencer" or "Youtuber" as a pejorative. To me that is a very myopic view of an individual to assess their worth or ability by something they enjoy or do for a living. People are just leveraging the tools that are available to them. I'm sure that people thought being a writer (not a scribe) was a stupid profession (whether they even considered that) when the printing press was still new. They were leveraging a tool that now unlocked a new type of profession to the masses. It seems to me video sharing can be very similar to the shows that I used to watch on TV (how to fix a car engine, build a deck, etc). Now that type of profession has been democratized.
I have two children and I try and help them figure out what they are passionate about or at least very interested in and I work with them on how they can turn that into a way to make a living. Whether that's talking about the opportunity space or how they can create opportunities. If they can't do that or the things that they are interested in don't intersect with their abilities (a shame when that happens in life) - then I tell them to find what they're good at and turn that into a way to make a living. Having something like YouTube around lets people combine what their passionate about and what they're interested in and potentially make money doing so.
I think that the best advice to give to children is for them to educate themselves. Whether that is getting a degree in chemical engineering, learning carpentry, or learning to weld. Then they can leverage that knowledge in multiple ways. Some may join the "establishment" and by that I mean the typical work for an existing company. Some may start new companies. However, some may blend lots of different things together such as working for a company while doing videos on their own time while they cultivate their following and develop their abilities. Personally I think that is to be commended not lambasted with the tag of "influencer".
I notice a trend in the traditional media to use "influencer" or "Youtuber" as a pejorative. To me that is a very myopic view of an individual to assess their worth or ability by something they enjoy or do for a living. People are just leveraging the tools that are available to them. I'm sure that people thought being a writer (not a scribe) was a stupid profession (whether they even considered that) when the printing press was still new. They were leveraging a tool that now unlocked a new type of profession to the masses. It seems to me video sharing can be very similar to the shows that I used to watch on TV (how to fix a car engine, build a deck, etc). Now that type of profession has been democratized.
I have two children and I try and help them figure out what they are passionate about or at least very interested in and I work with them on how they can turn that into a way to make a living. Whether that's talking about the opportunity space or how they can create opportunities. If they can't do that or the things that they are interested in don't intersect with their abilities (a shame when that happens in life) - then I tell them to find what they're good at and turn that into a way to make a living. Having something like YouTube around lets people combine what their passionate about and what they're interested in and potentially make money doing so.
I quite like Tobolds view on this, and I also somewhat agree with Janous, however I personally think that both views have great merit, and the main takeaway is - learn critical thinking. If you can analyse your prospects, think about what you want to do, figure out a path to doing it that navigates the issues... go for it. If you're doing it because, "Disney-Princess-Follow-Your-Dreams-And-It-Will-Come-True", then you're about to suffer a collision with reality...
I would say that a career choice has a dual purpose: Of course you'll want a job you enjoy to do, which usually corelates with a job for which you have some sort of talent. But the other purpose, unless you have extremely rich parents, is to find a job that pays a living wage. Chemical engineering, carpentry or welding probably all qualify. But if your passion is to paint pictures, or play music, or create content for the internet, you need to consider whether it isn't more realistic to do that as a hobby, and find a day job that pays the bills. I did.
Kids saying "I want to be a youtuber" today is not different then kids saying "I want to be a singer/NBA player/Futbol star/etc" in yesteryear.
Eventually those kids grow up and come to the realization that those dreams aren't achievable by most people. I am not a parent but I'd like to think I'd be supportive of a child who wants to pursue things like that and then as they got older steer them towards getting a day job like you said.
Eventually those kids grow up and come to the realization that those dreams aren't achievable by most people. I am not a parent but I'd like to think I'd be supportive of a child who wants to pursue things like that and then as they got older steer them towards getting a day job like you said.
Early in my engineering career a mentor who was an innovator and entrepreneur confided in me that in his opinion, a brilliant engineer was at least ten times more valuable than an average engineer but that nobody actually paid brilliant engineers what they were really worth.
Now after several decades of experience I understand where he was coming from but I don't think it is the full picture. If you are at the cutting edge of innovation then you need brilliant people who can come up with ideas and solutions far outside of the normal. The vast majority of the worlds engineers are not actually doing that or are only doing it very rarely. The world still needs needs average engineers and it needs a lot of them to make sure the lights stay on, water keeps flowing out of the tap, bridges don't fall down and aeroplanes don't fall out of the sky.
I don't know if the pay situation for brilliant engineers has changed. Perhaps it has in mega tech companies but there are enough average engineers being paid a decent salary for essential every day tasks to dilute any superstar impacts and keep the median and average salaries for engineers relatively close.
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Now after several decades of experience I understand where he was coming from but I don't think it is the full picture. If you are at the cutting edge of innovation then you need brilliant people who can come up with ideas and solutions far outside of the normal. The vast majority of the worlds engineers are not actually doing that or are only doing it very rarely. The world still needs needs average engineers and it needs a lot of them to make sure the lights stay on, water keeps flowing out of the tap, bridges don't fall down and aeroplanes don't fall out of the sky.
I don't know if the pay situation for brilliant engineers has changed. Perhaps it has in mega tech companies but there are enough average engineers being paid a decent salary for essential every day tasks to dilute any superstar impacts and keep the median and average salaries for engineers relatively close.
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