As a Third Party Recruiter and former engineer, I am very sensitive to degreed engineer salaries. I have noticed a definite decline in the salaries offered to degreed engineers with experience the last few years. Surprisingly, entry level degreed engineer salaries have kept pace with inflation over the last ten years, while there has been a definite compression of salaries for degreed engineers in the manufacturing sector as well as others. This compression has gotten so bad that I have declined opportunities to work with several companies wanting to hire degreed engineers because I was too embarrassed to approach candidates and tell them the salary. Believe me when I say that I do not turn down opportunities to make money lightly.
I conducted a straw poll (non-scientific) with recruiters that belong to the Top Echelon Network of independent recruiters (www.topechelon.com) and they agreed that indeed degreed engineer salaries for experience engineers have decreased over the last ten years or have held steady with no adjustment for inflation. We also agreed that engineering salaries are starting to increase, albeit slowly. My main purpose of this article is to recommend that degreed salary engineers look carefully at any offers they receive and possibly negotiate for more. I believe we are on a supply and demand cusp for engineers right now and that demand is going up but salaries are not going up nearly as fast. Some traction for increasing engineering salaries seems to be underway.
Will degreed engineering salaries eventually increase to the relative position they were at a decade ago? Probably not. The reason engineering salaries will not be rising rapidly is explained rather well in an article by Alan S. Brown titled "where the engineers are" subtitled "It may begin with simple services, like CAD conversions, but it's the first step in outsourcing the advanced jobs to Asia". This was the featured article in the June Mechanical Engineer Magazine. The article can also be found on the Internet at http://www.memagazine.org/contents/current/features/wherethe/wherethe.html. The crux of his article (although the article is very interesting for several reasons) is to point out that what has happened to IT engineers may happen to Mechanical, as well as other engineers, in the near future. The last part of the article by Alan S. Brown states:
"IT Today, ME Tomorrow"
Visa programs that allowed Indian information technology professionals to come to the United states and replace U.S. workers jumped into the headlines last year.
Is this trend the future of mechanical engineering?
Like mechanical engineers, IT professionals need firsthand knowledge of customer needs, said Ronil Hira of the Rochester Institute of Technology. "The visa programs allow Indian outsourcing companies to bring in foreigners to deliver the high level customer interactions, " Hira said. "These folks know the cultureand interaction back home. They don't hire Americans."
Hira estimates that there are 900,000 foreign professionals working in the United States working in the United States under temporary visas. Many are employed in information technology. A single Indian firm, Tata Consultancy Services, employs more than 5,000 foreign consultants in the U.S. Often, they directly replacedomestic workers.
Cost is the driver. Hira points to a $15 millions State of Indiana IT contract with Tata that called for 65 guest workers as programmers earning an average of $36,000 per year. This is far less that the starting salary of a newly graduated computer science major.
Indiana canceled the contract because of political pressure. Yet lower costs remain a powerful inducement to private companies. Electronic Data Services, for example, plans to eliminate 20,000 U.S. and European jobs and add 20,000 workers in low-wage nations. Other large IT companies have similar initiatives.
"We're already seeing wage pressure, "Hira said. "We've expanded the supply, but not the demand. When IEEE did its annual salary survey, we found electrical engineering salaries were down a few thousand dollars for he first time since the survey started in 1972. Unemployment is at record levels for electrical and software engineers."
According to the IEEE, the Institute of Electrical and Electronics Engineers, even when unemployment rose as high as 9.5 percent during the 1980s, it never exceeded 2 percent for electrical and electronics engineers. Yet between 2000 and 2004, employment fell 24 percent for programmers, 23 percent for electrical and electronics engineers, and 16 percent for computer scientists and analysts. The number of IT systems managers rose 48 percent, since someone needs to manage foreign workers.
Hira believes that outsourcing jobs is displacing some higher-paid domestic professionals. He is blunt about what the future holds.
"Back in the 1980's when the Japanese were battering us with automobiles and semiconductors, companies asked Washington for protection," Hira said. "Those firms are not going to D.C. anymore. They're adopting an offshore model. Intel is saying, 'I can hire an engineer offshore for one-fifth the price, so why not do it?' this is creating competition between U.S. and overseas workers and driving down wages."
The next time Congress is discussing raising the H1-B visa quotas or making it easier to emigrate to the United States you might want to contact your Congressman and make your feelings and beliefs known. I have already contacted my Congressman about this issue and would continue to do so, if it wasn't for that pesky restraining order.
