Salaries and states of mind

Past surveys recall the major influences that occurred along the way: a tumbling stock market in the late '90s, an economic slowdown after Sept. 11, and the recent resurgence in the global economy.

By Rick Pedraza, Managing Editor, Digital Media

Since we began publishing in 1997, and began conducting our own salary surveys beginning in 2001, reports on career, compensation and job satisfaction findings of controls professionals in the industrial automation sector always have been among the most popular and widely-read articles. We recall the major influences that occurred along the way: a tumbling stock market in the late ’90s, a worldwide economic slowdown after Sept. 11, and the more recent resurgence in the global economy.

In February 1997, the Dow Jones Industrial Average closed above 7,000 for the first time. As we know today, it has nearly doubled, steadily climbing past 13,000, having stumbled badly from nearly 12,000 in 2000 to 7,300 in 2002.

Since Then?
If you’ve worked in machine automation for 10 years or more, you might have been more specialized back then. Our surveys indicate you’ve acquired additional responsibilities due to downsizing, mergers, etc., requiring more education or experience and ability to deal with regulatory, global, and operational tasks in addition to keeping up with rapidly changing technologies.

Salaries of machine builders today have, for some, reflected this change and increased proportionally with the skills and higher education levels of today’s new workforce. For others, it hasn’t.

Mechanical, electrical and/or industrial engineering graduates coming out of school in 1997 typically could earn $35,000-40,000 annually, according to mean averages published by the Bureau of Labor Statistics. In contrast, that same source shows the median salary today for an electrical, mechanical or industrial engineer graduate to be approximately $56,000. With 10+ years experience, it’s not uncommon for a Control Design reader today to earn an annual base salary in the mid-60s. Those with 20 years or more experience frequently earn upwards of $80,000 a year.

Our first salary and job satisfaction survey of industrial machine builder OEMs, “How Are You Doing?,” Aug. ’01, painted a reasonably positive picture of the state of the industry, even if the stock market had begun to lose serious ground. The results produced a composite of a 44-year-old male with a college degree in electrical engineering, and working an engineering design job and with 11.5 years at the same company. That fellow claimed to be fairly satisfied earning a statistical median of $63,000 a year, and a mean of $67,692.

In contrast, the salary survey we conducted last year reported mean earnings of controls professionals in the machine builder industry to be $76,876, a 5.5% rise over the previous year, and nearly 15% higher than before the economic slowdown that occurred in the manufacturing sector after 9/11. 

While the economy certainly was tottering before 9/11, many respondents cited that date and its events as the beginning of a slide that persisted for awhile. Some even speculated that 9/11 was an excuse for economic cuts by their employers. “I think that was an excuse for a salary freeze, as I don’t think our business was really affected,” commented one survey respondent, an electrical engineer at a western New York engineering and systems integration firm.

Donald Donkervoet, president of Generation Technology, a Dallas rebuilder of engines, turbines, and other large rotating equipment, wrote in his survey form, “We observed a significant reduction in business after [9/11]. It was a like a door slammed shut. All of our customers delayed whatever projects they could.”
The collapse of Enron in late 2001 was a wake-up call to a number of affected industries. This concern was reinforced by the subsequent collapse of Global Crossing, World-Com, and some other large corporations and was reflected by the general weakness of the stock markets and the dollar, even though most of the subsequent economic news was better than expected.

By mid-2002, our survey showed in many respondents’ minds that “The Worst is Over,” Aug. ’02. Machine builders weathered the economic storm “with resilient levels of job satisfaction and security.”

However, the next year’s results, reported in “At the Limit,” Aug. ’03, revealed alarming levels of frustration and job insecurity, mostly the result of uncertainty and pessimism permeating the industry due to the faltering economy in 2001 and the year-long downturn.

By the following year, “A Picture of You,” Aug. ’04, our results showed a more positive attitude as industry slowly moved into a better economic condition. 

Our 2005 survey, “Money Train Doesn’t Curb Job Worries,” Aug. ’05, found that pay for machine control professionals was on the rise again, hands-on experience was declining, and jobs were in jeopardy from outsourcing. “We were laying off 12 months ago,” reported Eric Lund, a mechanical engineer at Michigan-based Burr Oak Tool and Gauge in 2005, “but started hiring again this past year.”

In 2006, “Bottom Line: Pay Up,” Aug. ’06, most respondents (66%) reported being satisfied with the direction in which the industry was going. In addition, despite ongoing concerns about manufacturing and engineering services moving offshore, most respondents (54%) reported feeling secure with their jobs and their companies. More than half reported receiving bonuses last year, contributing to the rise in pay.

More Good News
Unemployment in the manufacturing sectors today is currently at its lowest level in more than six years, and is hovering around 4%, according to the U.S. Department of Labor. In 1997, unemployment was at 5%, and after the September 11 attacks, unemployment rose to 5.4%, in response to the sharp slowdown in the world’s economy.

Leading the decline was the manufacturing sector, which shed 142,000 jobs in 2001, turning a narrow economic slowdown in our industry experienced over the previous 15 months, beginning in 2000, into a broad recession.

Today, however, we see resurgence. Employment statistics published by the American Electronics Assocation (AEA) in 2006 marked the third-consecutive year of overall employment gains in software services and engineering and tech services-the industry’s two strongest sectors. The report found high-tech manufacturing added jobs for the first time since 2000, with total U.S. high-tech industry employment at 5.77 million in 2006, up by 146,600 from 5.63 million in 2005.

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