Are engineers underpaid? No. Engineers work in an unregulated free market with highly different skillsets. To get paid more, you need to level yourself up.
To point out, I hear this type of talk in almost every profession. Even in the highly unexpected National Basketball Association (NBA).
Non-superstar NBA players harp about their low play all the time. They talk about how short their careers are, and how Uncle Sam swipes half their paycheck.
In 2019, the rookie minimum salary to play in the NBA was $893,310. Their salary is nothing to sneeze at. Yet, they still voice their displeasure with their salaries.
The point is, context and perspective are important.
But I digress. Let’s go over why I think engineers aren’t underpaid.
I’m going to dissect the 7 following items that’ll shape my response to this question:
- Engineering is a difficult major
- The skillset and abilities of engineers vary
- Types of engineering work vary
- Engineering labor market
- Artificial control over the engineering labor market
- The impact of today’s modern standard of living
- Future of engineering
Before we get started, let’s go over why this is such a hairy question.
Engineers are underpaid compared to who?
To answer, “are engineers underpaid,” we need to first define who we’re comparing to.
Are we comparing engineers to doctors, pro athletes, dentists, entertainers…
With every comparison, you need a point of reference. Then you need to equally evaluate every variable on both sides in the comparison.
For example, let’s compare the average salaries of senior engineers with medical doctors in San Francisco.
|Type of work||Average salary|
Clearly, medical doctors have a salary edge on paper. But this table doesn’t tell you the entire story, as we didn’t evaluate all variables in the comparison.
At the end of the day, these are all great salaries. But again, perspective and context are critical.
You can’t directly compare medical doctor and senior engineer salaries together. It’s like comparing apples and oranges.
Doctors won’t earn the big bucks until their mid-thirties. On top of that, they have a mountain of student loan debt to pay off too.
While an engineer can start earning a decent salary at the age of 21. They can then invest their money almost 15 years before a doctor hits the ground running as well.
Compound interest works wonders for your bank account. Combine this with the fact engineers don’t come out with baskets full of student loan debt.
Now, we have a more equal comparison, which shines a new light on the salaries of both professions.
I’m not saying engineers will make more than doctors in their lifetime. There are even more variables that I haven’t listed.
One biggie I left out is if you’re a poor or amazing engineer.
Are only the lower-skilled less ambitious engineers voicing their frustrations over low pay? Because not all engineers are created equally skill-wise.
Fierce competition even for “low paying” engineering jobs
What’s more, there’s a line of engineers pushing to work for these “underpaid” positions. Now, do all these engineers consider engineering to be an underpaying profession? Maybe.
But they’re all still fighting tooth and nail for these jobs. An employer sees high supply with high demand for “underpaid” jobs. Something is clearly out of wack!
Let’s take it a step further. Are all engineers in high demand? No!
Because only when your skillsets are in high demand will your salary shoot up. This is not the case here. Engineers are treating themselves like a commodity for one reason or another. I’ll dive more into this in section #4 when I discuss the engineering labor market.
Further, the location of your engineering job is important.
An $80k per year salary in the midwest is amazing. But that same salary in San Francisco will have you living in poverty.
Yes, I’m not joking. HUD defines low income in San Francisco for an individual to be $82,200.
Clearly, determining who’s underpaid and who’s overpaid isn’t a black and white answer. But, this is a great segue to the first topic of discussion.
#1 Engineering is a difficult major
Yes, engineering is a difficult major. No one would argue against this. It’s certainly no cakewalk.
But a difficult major doesn’t instantly equate to higher pay. You need to first consider the economics of the labor market. We’ll discuss this in greater depth in section #4.
That said, difficulties come to you in many different ways in life. They can be mental or physical, or even a mix of the two.
For example, go do dangerous construction work in the blistering heat for 8 hours a day.
I’d take doing engineering work in an AC controlled room any day of the week over construction. Heck, I even enjoy learning about challenging engineering subjects.
My point is, the difficulty of a major isn’t a ticket to wealth. Especially when thousands of other engineers graduate every year with your same skillset.
I know many engineers pound their chest in pride. All because they were the few who survived the engineering trenches in school.
But, engineering isn’t as exclusive as a club as you may think. For this reason, salaries are lower for basic engineering skillsets.
Now, highly skilled engineers are a completely different story. They do get paid the big bucks.
On that note, I want to emphasize this point through the NBA. The NBA is truly an exclusive club. Few people on this Earth have an NBA player’s combination of size, athleticism, and skills.
It’s why there are only 390 active NBA players in the league. Now, combine this low supply with the high demand for player services. It’s completely clear and justifiable why NBA player salaries are so high.
#2 The skillset and abilities of engineers vary
In the NBA, every player can do something truly unique. Every single player including the last man on the bench.
It’s why NBA players get paid so much by teams.
But in engineering, it’s a different story. So many engineers graduate every year with different skillsets as we just learned.
Most of these engineers won’t even ever work on the next colossal engineering project. For one, they may not have the drive to pursue these high-end projects. Thus, their skillsets flatline.
In civil engineering, many engineers design the same beam over and over again. This work doesn’t require a genius.
On the flip side, there are creative engineers who design the Golden Gate Bridge. So you get paid what the labor market dictates, based on your skills and what you can do.
The point is, engineers aren’t all equal in skillset and abilities as I’ve mentioned. Engineers who constantly challenge themselves from my experience complain less about their salaries.
I have friends who make $500,000 plus under an employer. How? They’ve crafted a specialized skill that sets them apart from their peers. Also, they’re constantly learning and challenging themselves every opportunity they get.
It’s these people with specialized skills that are high in demand and low in supply. Not people who just hold an engineering title or a diploma that reads “engineer.”
The demand for your skill set will determine your pay grade.
#3 Types of engineering work vary
Let’s go back and drill into the exclusivity discussion a little more.
Not all jobs require an engineering degree.
Just because a job has “engineering” in the title, it doesn’t mean you’ll flex your mind much. You may only be a glorified paper pusher, or just counting bolts all day.
I know many engineers who never touch any technical work.
I can back this up with what some of my engineering buddies tell me too. They say their jobs don’t require more than a high school education.
So why would an employer pay big money for this level of work? They wouldn’t!
Keep in mind, in every field, some jobs will be amazingly cool. While others will just suck!
It’s why many NBA players demand trades all the time. A role player on one team will be the leading scorer on another team.
So the traded NBA player goes from a position he hates to one he loves. In return, he has the chance to now get paid the big bucks.
#4 Engineering labor market
Engineers operate in the free market.
In the free market, you’re paid what you’re worth. If a position is worth $40k per year, then that’s what someone will pay you.
The market doesn’t care what you think or feel. To oversimplify, the value you bring to the table is set by the supply and demand of your skillset.
Because the number of engineering seats isn’t artificially controlled in the labor market. All the while, the supply of engineers is high, especially for basic skillsets right out of school.
As a result, compensation doesn’t go too high out of wack in most lines of engineering work.
Free market definition simplified
To better understand the free market, let’s peek into the burger-flipping profession. Let’s say I offer to employ you to flip burgers for $8 per hour.
But, you’re gunning for $20 per hour. So you’ll offer to work $20 per hour for me, or you’ll turn my offer down.
If you tell me to take a hike and reject my offer, I’ll search for someone else. I’ll search for someone who is equally qualified and who will accept $8 per hour.
If I can’t find anyone to accept my wage, it means my wage is too low. People can make more money doing the same work at another burger-flipping business.
So I need to continue raising my price until someone bites.
If I do find a string of people who will work for $8 per hour, it means you’re overvaluing your skillset. Or, you offer additional skills. You may be an amazing chef, and that’s why you demand $20 per hour!
In short, there’s complete freedom in the market place. I’m not forcing anyone to work for me. It’s the job seeker’s decision to work for me or not.
But, every person needs to provide more value than they cost for a business. Otherwise, most jobs wouldn’t exist
This is the barebones idea behind a free market.
Engineers in the free market
Engineers aren’t forced to line up for these “so-called” underpaid engineering jobs. These engineers make this decision willingly.
Clearly, some people don’t think these engineering jobs are underpaid. In fact, this is why a $40k per year engineering job may have so much competition.
Now, one person can argue this issue exists because not enough regulations exist. Companies are exploiting the oversupply of engineers.
At the same time, I can argue engineers take these jobs as they’ll do anything to get by. Maybe it beats the salary they made in the country they immigrated from, by a mile. Or, they don’t mind a lower standard of living with roommates.
These people, probably don’t consider themselves underpaid.
#5 Artificial control over the engineering labor market
The American Medical Association (AMA), artificially controls the medical doctor labor market.
The AMA helps “limit” the number of accredited medical schools that can open their doors. As well, there are fewer residency spots open for graduates.
In short, the AMA limits the supply of doctors, whether intentional or not. Naturally, salaries increase because of low supply and high demand.
I know, I’ve oversimplified this matter. Insurance, malpractice, student debt, and much more factor in doctor salaries.
Also, I’m 100% on the side of added regulations to “limit” supply, as long as the quality of healthcare remains high. I don’t want an amateur doctor to cut me open on the operating table.
Gatekeeper of the engineering profession
What about engineers who build bridges we drive over every day? A failed bridge will kill magnitudes more people than an incompetent doctor…
The engineering profession doesn’t have a similar AMA gatekeeper. A group that aggressively pulls strings from up top to manage the profession.
That said, we do have the NCEES. They’re a nonprofit organization focused on advancing professional licensure for engineers.
The P.E. license to be more specific. The reach of the NCEES does have limits, but other agencies exist too, to monitor engineering work.
I dive deep into this topic of if “engineer” should be a protected title. I go over why the engineering profession isn’t on par with medical doctors.
One major component is that medical school has a greater restrictive acceptance rate. And it’s because of limited seats as constructed by the AMA.
Thus, only the best of the best students get accepted into medical school. Naturally, the best of the best deserve to make more money. They have high in-demand skills in a low supply market.
But in engineering, acceptance rates are less restrictive. This means many people with watered-down skillsets will become working engineers. Thus, the pay naturally drops as dictated by the free market.
|School||Medical School Acceptance Rate||Engineering Undergrad Acceptance Rate||Engineering Graduate Acceptance Rate|
|University of Arizona||2.3%||83%||51%|
|University of North Carolina||3.6%||52%||18%|
|John Hopkins University||7%||12%||35%|
Engineers emulating medical doctors
One way to steal a page from the AMA is to increase the education requirement for engineers.
The NCEES attempted to do just that. They wanted to add a Master’s degree requirement for P.E. licensure. Like other professions, this would raise the bar of admissions through added education.
As a result, this would definitely reduce supply and kick up demand. But, beyond padding some people’s pockets, is it logically the best decision?
Sure, it’d raise the bar for education. Naturally, more education is good, right?
I’m all for education. But not gaining education for the sake of education alone. Some lines of engineering work don’t need advanced courses.
Also, the quality of engineering work isn’t suffering today. So the education bar to practice engineering doesn’t need to increase in height.
Even more, classroom learning today isn’t optimized for 21st-century learning.
I think there are many shortcomings with formal engineering education today. Major changes are required in engineering education.
Also to point out, I don’t think unionization in engineering is good either. Because I know some people find unionization as a good way to control labor markets.
Again, I default to engineers, need to improve their own skillsets to get paid more.
#6 The impact of today’s modern standard of living
Your favorite products may seem a bit expensive today. But they’d instantly become unaffordable if the pay of all engineers drastically increased.
I’m talking about video games, smartphones, TVs, kitchen appliances, and so much more.
Our modern standard of living depends on low engineering labor costs. If the pay of engineers doubles, the cost of your favorite products would double as well.
It’s basic economics. A company determines a product’s price by adding together the following costs:
So if we double one of the above variables, the product cost would double in return.
This may be the reason why an outside force like the AMA doesn’t control the engineering profession.
As a result, the onus falls on engineers to drive up their own value in the labor market to make more money.
#7 Future of engineering
Engineering isn’t safe from wage deflation. The basic laws of economics apply to all industries including engineering.
In other words, salaries in engineering hinge on the basic supply and demand curve. And the future doesn’t look bright for engineers who aren’t willing to bust their ass. To go the extra mile.
Let’s go over the four variables engineers need to keep an eye out for in the future.
A heavy push of kids towards STEM fields
The education system heavily pushes STEM fields to kids. For good reason too.
Most STEM fields are solid fields to get into. BUT, you can’t expect to make amazing money by only collecting a STEM degree.
If you don’t like STEM-type work, you can’t force it. Because you never will go the extra mile when push comes to shove.
At the same time, this entire push towards STEM is flooding the market with more engineers. This naturally increases the supply and demand drops.
What’s more, I don’t see a shortage of engineers in most fields. I only see the supply increasing more and more.
Globalization fueling greater immigration and issuance of H1B visas
Before you only competed with people in your own backyard. Today you’re competing with people from across the globe.
Naturally, the competition will skyrocket for every engineering position.
If you don’t set yourself apart from your peers, you’ll quickly find yourself lost in the mix.
Plus, more companies will outsource work too as long as regulations don’t increase. It’s a no-brainer. It’s a surefire way to increase profit margins as overhead costs continue to rise.
The rising of automation and AI
Automation and AI over time will kill lower-level engineering work. This is engineering work that doesn’t require any of the following:
- High levels of creativity
- Interactions in the physical world
- High levels of communication with outside parties
Not to say the above work won’t ever become automated and controlled by AI too. I just don’t think anytime soon.
BUT, the work of three highly-skilled engineers will reduce down to one. No different than what happened in factories around the world years ago.
Today, software applications do a lot of the complex math for engineers. This alone has reduced the headcount in companies.
The point is, your competition isn’t only humans in the future. Machines will march right alongside you hunting for jobs.
This will force human engineering jobs to become much more specialized too. As a result, you’ll need to constantly bolster your knowledge and skills to maintain a job. As well as to maintain decent pay.
Internet making knowledge accessible to everyone
Knowledge is no longer tucked away, hidden in the ivory towers. Decades ago, you had to pay tuition to get access to amazing knowledge.
But today, with an internet connection, you have access to endless knowledge.
EVERYTHING I learned in school you can now learn online. What’s more, the content is easier to consume and digest online.
This means you need to go the extra mile to make yourself a better engineer. Otherwise, you’ll get lost in the mix of tens of thousands of people with your same knowledge base. They can do the exact same work as you.
As a result, you’ll quickly find yourself “underpaid,” and then even soon out of a job.
I find this all to be utterly amazing, but it’s frightening for those who don’t want to keep up.
What to do if you think you’re an underpaid engineer?
It’s not all doom and gloom for engineers. Unless you’re a complacent engineer who thinks your employer should pay you more. All because you’re an “engineer.”
To point out, there’s no limit to how much money you can make as an engineer.
Yes, the sky is the limit!
If you want to get paid more, then improve your skillsets. Or go start your own business.
These days you can’t expect a high salary by getting a piece of paper alone. I’m talking about a university degree.
Because knowledge is everywhere on the internet today. You need other ways to set yourself apart from the masses of people graduating.
Then throw in automation and globalization. You’ll have even more competition stampeding at you in the coming years and decades.
In short, you need real-world engineering skills. You need to sharpen your technical skills while improving your other skillsets.
Make yourself a better engineer
To help you level yourself up as an engineer, I’ve written the following articles:
With improved skills, you can more easily switch jobs too. Switching jobs is the best way to quickly raise your salary.
Keep in mind, your market value isn’t determined by what your current employer pays you. It’s determined by what other employers are willing to pay you if you leave your job.
So, to maximize your pay, you need to look for new job opportunities. Don’t become complacent in a job that you feel you’re underpaid.
And if you’re braver, and have the skills, start your own business as I said. You can scale your revenue without a pay ceiling.
In short, I want to emphasize, the demand isn’t for engineers. The demand is for qualified and superstar engineers!
This is how you get paid more!
“Are engineers underpaid?” wrap up
In the end, every person is responsible for their own career.
You choose if you want to continue working somewhere you hate. You also choose if you want to change your circumstances or just continue to complain.
I find many engineers want job security above everything else, given they’re risk-averse. Naturally then, it’s easier to complain than to find a better paying job when you don’t get a raise.
So, I don’t believe engineers are underpaid.
The free market as setup today pays you what you’re worth. I believe if engineers think they’re underpaid, they need to do something about it. Simple as that!
Some engineers make $30k per year. While other engineers make millions of dollars a year. Clearly, a pay ceiling doesn’t exist.
Also, the competition will only become fiercer moving into the future. At the same time, it’s insane to bet your future on an outside organization to come and save you. You’re on your own!
What’s more, any outside organization won’t even fare well in the future. Any artificial control over the market can only stand for so long. Because AI and automation won’t break as they speed forward disrupting labor markets.
So the best thing to do is to constantly level yourself up, and provide amazing value to the market. Become a better engineer and challenge yourself in every way imaginable.
Finally, become an engineer because you love the work. In the end, the money will follow, and life is too short to do something you hate.
Do you think engineers are underpaid? Why do you think doctor salaries are greater than engineer salaries?
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Koosha started Engineer Calcs in 2020 to help people better understand the engineering and construction industry, and to discuss various science and engineering-related topics to make people think. He has been working in the engineering and tech industry in California for over 15 years now and is a licensed professional electrical engineer, and also has various entrepreneurial pursuits.
Koosha has an extensive background in the design and specification of electrical systems with areas of expertise including power generation, transmission, distribution, instrumentation and controls, and water distribution and pumping as well as alternative energy (wind, solar, geothermal, and storage).
Koosha is most interested in engineering innovations, the cosmos, our history and future, sports, and fitness.