The past few years have been particularly tough on the electronics industry. EOEMs were hard hit by both the high-tech downturn and the increasingly sluggish U.S. economy, which stalled, slid, and snuffed out any lingering feelings of "irrational exuberance."
Many OEMs are just starting to climb out of the hole that the electronics and engineering markets fell into, but it's slow going. According to the U.S. Department of Labor, the unemployment rate for EEs rose to an unprecedented 7% in the first quarter of 2003, putting 172,000 high-tech professionals out of work. Other factors like the influx of foreign workers on temporary visas and the increase in offshore outsourcing also are contributing to concerns about the employment outlook for EEs.
With this special issue, the editors of Electronic Design inaugurate an annual assessment of the engineering profession, which will include tracking trends and delivering detailed data about salaries. The information published in this issue was derived from Electronic Design's 2003 Reader Profile survey conducted from May to July 2003.
Electronic Design readers are primarily electronics engineers, engineering managers, and technical executive managers involved in design and development projects. Survey respondents mapped closely with the magazine's subscriber profile (see figure).
Nearly half (46%) of the executive/operating management respondents work at companies with fewer than 25 employees, and 52% work at firms with under $5 million in annual revenue. So it's safe to say that a good portion of these readers, while top-heavy in title, are hands-on engineering executives working at OEM startups and spinoffs.
According to the survey, engineering professionals in the U.S. currently average $86,764 annually (see figure). Those who indicate engineering management as their principal job function earn about $22,000 more or 27% higher salaries than design and development engineers.
The survey also corroborated the relationship between pay and location: Salaries in the Pacific region (California, Oregon, Washington, Alaska, and Hawaii) top the list, averaging $96,374 annually—more than 11% above the national average (see figure). At $94,037, the New England states (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut) run a close second.
At the other end of the scale, the lowest annual pay is found in the East South Central region (Kentucky, Tennessee, Alabama, and Mississippi), where salaries weigh in at about $15,600 below the national average. Similarly, salaries in the West North Central states (Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas) are about $12,900 below the national average. Of course, housing and other living expenses influence what companies pay their employees, so it's not surprising that OEMs in high-priced areas like California, Massachusetts, and New Jersey shell out significantly more on salaries.
If a six-figure salary is your idea of success, your best bet is to sign on with one of the IC and semiconductor houses, where the average engineering salary is $106,377 (see figure). You'll do almost as well at a computer-manufacturing firm, where engineering professionals pull down an average of $101,146.
While contract manufacturing makes headlines as companies look to lower costs by outsourcing more design work, another aspect of cost cutting is keeping salaries low: With average earnings of just over $66,000, engineering professionals at EMS companies reside on the lowest rung of the pay scale.
Some of our findings confirmed common-sense assumptions. On average, bigger companies pay bigger salaries (see figure), and engineering experience translates into higher pay (see figure). If you find yourself slowing down at 40, you can expect the same of your salary growth (see figure). And these days you'll need more than a bachelor's degree to achieve parity with the average salary earned by EEs nationwide (see figure).
A small (and statistically unreliable) sample of survey respondents said they worked on MEMS projects, a specialization that no doubt helped this elite group average a whopping $106,364 annually (nice work if you can get it). Engineers designing ICs and semiconductors took home almost as much, averaging $105,591 a year (see figure). They're followed by designers of computer products ($99,861) and makers of communications systems and equipment ($90,803). Designers of consumer products pull up the rear, averaging just under $78,000. This may reflect the tight margins, price pressures, product commoditization, and foreign competition that characterize this market segment.
Electronic engineering has long been a job for the guys, and our survey indicates little has changed on this score: Only 2.4% of survey respondents were female. According to the 2002 figures from the Bureau of Labor Statistics (the latest available), men on average earn about 15% more than women doing comparable work. The Electronic Design engineering survey reveals an even greater disparity, with men out-earning women by nearly 22% (see figure).
This fiscal imbalance may be partly explained by work experience: Nearly one-quarter (23.3%) of female respondents have been in engineering for fewer than five years, and more than half (57.0%) for fewer than 10. Still, when it comes to salaries, perception is reality: 53.6% of male engineers feel adequately compensated for their work, while only 43.7% of female respondents share that sentiment.
Asian engineering professionals average the highest salaries ($90,000), followed by Caucasians ($86,061), Mixed-race ($85,112), African-Americans ($79,527), and Hispanics ($65,431) (see figure). More than 40% of Asians work in California, the state with the highest average salary, which most likely bumps up the average for this ethnic group. Moreover, nearly half the Asian respondents are employed at companies in the three highest-paying industries—ICs and semiconductors, communications, and computer houses. Then again, Asian survey participants were typically better educated than respondents as a whole, with nearly two-thirds (63.6%) holding master's or doctoral degrees.
Nearly 61% of Hispanic respondents were born in Mexico or Central/South America, and an equal number were employed in one of three states: Texas (25.0%), California (21.1%), and Florida (14.5%). Hispanic engineering professionals are younger than average (40.1 years vs. 47.2 overall). As a result, they have less experience (14.3 years vs. 21.6 years), which may contribute to the disparity in average salary.
African-American engineering professionals seem to have gotten involved in the industry later than their counterparts. Nearly 40% indicated they've worked in engineering fewer than five years, despite being only slightly younger (43.7 years of age) than the average respondent. On average, African-American engineers have racked up just 10.7 years of experience. Their relatively brief employment history, coupled with their age (remember that salary growth starts to slow at 40), may help explain the lower salaries.
What may be much harder to explain is the fact that European-born engineers currently pull down the highest average salaries at U.S. OEMs (see figure). With an average salary of just under $86,000, American-born engineers earn about $5700 (7%) less than their European-born counterparts working in the U.S. The salary gap between American- and Asian-born engineers is only about $3500 (4%) less.
OEM engineers interested in earning more may want to consider matrimony (unless, of course, they're already married) (see figure). Married engineering professionals average nearly $19,000 more than those who have never tied the knot. It also pays to stay married: Divorced engineers make about 10% less than their connubial counterparts. OEM professionals separated from their spouses fare even worse, earning about 20% less than their married officemates.
If you're already married and are still looking for a little something extra in that paycheck, you may want to reexamine your political beliefs and affiliation. Although Republicans outnumber Democrats by nearly 3 to 1 among respondents, Democrats actually average about 2.3% more per year (see figure). Long-standing members of the Grand Old Party may want to consider what could be a less jarring path to cash: Conservatives outpace both moderates and liberals on our salary scale.
A final note: We asked readers if they would recommend engineering as a career to a young person looking to choose a profession. The overwhelming answer was "Yes," and that affirmation held true across every salary range.