Thursday, July 31, 2008

WSJ compensation survey

The WSJ has posted some interesting compensation data which can be sorted by college and degree type. The data covers people less than 5 years out of school and more than 10 years out ("mid-career"), in all cases excluding those that earned advanced degrees -- so that the outcomes are most sensitive to the undergraduate background of the respondents. Note you can click the column heading to sort by that variable (starting salary, 75 percentile mid-career salary, etc.).

There's also an accompanying article. The author notes that schools (Ivies) at which a large fraction of students head into finance tend to have the highest starting and mid-career averages. Engineers have high starting salaries but not as much appreciation.

A social scientist can now regress the salaries on avg SAT and school / major to calculate the economic "value add" for a particular major or institution. (See UT Austin data here.) A significant confound is that people who *do* get advanced degrees would not appear in this data. (Almost half of all Caltech undergrads get PhDs and probably well over half get other advanced degrees.)

Some random results:

Caltech grads had the highest median starting salaries at $75k; by midcareer Dartmouth is number one with median compensation of $134k (MIT $126k, Caltech $123k).

Salaries by degree | starting | 10th-90th percentile midcareer range

Physics | $50k | $56k -- $178k
EE | $60k | $69k -- $168k
English | $38k | $33k -- $136k
Economics | $50k | $50k -- $210k
Philosophy | $40k | $35k -- $168

• Survey respondents included two sets of U.S. bachelor's degree graduates: Full-time workers with 5.5 years of experience or less and full-time employees with 10 or more years of experience.

• The survey excluded respondents who reported having advanced degrees, including M.B.A.s, M.D.s and J.D.s. Self-employed, project-based, and contract employees were also not included.

• Salary included annual cash compensation, including base salary or hourly wages, combined with commissions, bonuses, profit sharing and other forms of cash earnings.

8 comments:

D said...

I graduate with my BS in physics 25 days before I turned 27. I started @ $58k from a Pac-10 school. Seven years later, I make $81k. I have a master's degree in OR from a name brand school, and I look around and think, "Whoa, am I underpaid."

I work for a defense contractor. I came to the industry with four good years of work experience [between stints in school] that my company completely discounts. I get, on average, 3.7% raises, with no opportunities for bonuses. The industry pays a rate for minimum performance, not average or exceptional performance.

I am angling for a job that should pay in the $100k-$110k range that has a combination of financial and technical responsibility [you know, if they ever call me for an interview]. I could probably make more like $150k if I was willing to commute 1.5 hours each way (NYC).

It's frustrating. I actually have a line on a gig with my company that will be exceptionally cool, topically. Plus, it is a mile and a half from my house. I get paid for my OT, and if they could promise me 50 hour workweeks, I would quit looking for other jobs. If they could promise me 45 hour workweeks, I'd definitely slow down.

I have a friend who was, two years ago, in almost exactly the same boat as I am now. He wanted a 10% raise to stay. Company didn't give it to him. He left for 35% more.

Dave Bacon said...

I wonder who is the best tuition bang for the buck. My bet would be Berkeley.

steve said...

Dave,

You are correct. Berkeley's numbers are just a little behind Stanford's, which are on par with the Ivies.

On the other hand, these days if you get into Harvard and your parents aren't very high income (< $180k per year), it could be cheaper than Berkeley! I think they are setting total parental contribution at 10% of family income below that threshold. My kids have to start studying now! :-)

The harder question is who adds the most value after controlling for SATs...

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mock turtle said...

this, from the st louis fed reserve, may be the single most significant set of data points in determining your future compensation

http://research.stlouisfed.org/fred2/series/NFORBRES?rid=19&soid=1

calgarian said...

I have a few questions which I hope aren't too dumb :

What kind of jobs do typical physics/math graduate take after a Bsc ?

10 years down the road, what kind of jobs or positions do they typically hold ?

Let's assume we're talking about math/physics graduates from ordinary state schools, nothing too elite and nothing too shabby either.

The 10year median salaries posted for physics/math grads aren't bad at all for undergrad only. Are those trader jobs or some other wall street positions ?

Actuaries usually only do an undergrad but they don't seem to reach those salaries unless they get their qualifications.

Maybe the highly paid physics/math people have CFAs that aren't taken into account ?

steve said...

Calgarian,

I honestly don't know how to account for the high earnings of (say) 90th percentile BS-only physics grads. It's possible a lot of them are in finance or technology fields (for example, semiconductors, working their way up as engineers or engineering managers). I don't think it's all finance because 10% of the BS-only physics population is still a lot of people.

The other thing to keep in mind for *all* degree types is that in the US anyone can start a business, and if it is successful you can make a lot of money. Many of these BA/BS-only people who are high earners might be small or medium-sized business people.

It would be nice to have deeper access to the survey data in order to answer your question!

Cassandra said...

D: That upper tail is probably quants - would need to see the raw distribution to say much more. I've also worked in military/defense: tends to pay lower than average but sometimes not. Sadly our economy is so broken right now that it will be quite a while (if ever) before you can job hop like that again. I've had the opportunities to do it so I know how nice it can be. It's not without risks, however.

My "fatherly" advice is to remember that job pay is just another form of price-value mapping. Market pricing is an illusory convenience but not an actual reality. As such, it's highly individual to the situation. All prices are negotiations. Always. You may think otherwise, but that assumption is itself your default negotiation position/offer.

Dave Bacon: you're arguing that brand value could make up for talent/learning. That's really the core of the problem and not the solution in the US today - all show and no substance.

Calgarian: What to BS Physics do? Hopefully what interests them while paying reasonable well. If pay is your only metric, you've missed the point of education. I'm sure you've heard the phrase "Do what you love and the money will follow". I have 30 years of experience that says that phrase is true.

The key thing, however, is to listen to your self before you listen to others in that regard. Be aware that many people get brainwashed by parents, peers and society into believing these outsiders' goals are their own. I have a resume that boring corporate folks look at and think is crazy. I won't bore you with details but it's what has kept me happy in adversity and what makes me more qualified than most.

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