How Much Money do Engineers Make?

While this is a personal finance blog, my career is in the field of Engineering. Along with my wife, we both earned our degrees in Industrial & Manufacturing Engineering from one of the top engineering schools in the U.S. After gaining some experience, we both went back to our alma mater and earned our Masters degrees. I earned my M.E. in Systems Engineering and my wife earned her M.S. in Engineering Management. Between us, we have worked in the construction of biomedical research facilities, manufacturing of HVAC equipment, manufacturing of truck powertrains, manufacturing of electro-mechanical devices, and cleanroom manufacturing for the pharmaceutical industry.

The Outlier in the Data

When it comes to potential earnings, the engineering field and the industry could make a big difference. With software and petroleum engineering being the outliers, you can expect to earn a starting salary ranging from $50,000 to $65,000 with the median salary falling around $58,000. At least, that is what you will read on websites like Glassdoor.com, Salary.com, and Payscale.com. While this salary data matched what my wife made with her new job as a maintenance engineer working for the Powertrain manufacturer, this was not the case for me.

Keeping in mind that most engineering fields heavily overlap, my first two job offers were for a Mechanical Engineer working for the government in Maryland Biomedical Research Facilities and a Civil Engineer working for a contractor partnered with the Pennsylvania Department of Transportation. This was back in 2011 when I had just graduated with my bachelors degree in Industrial and Manufacturing Engineering. The mechanical engineering job was paying $30,000 per year and the Civil Engineering job was paying $34,000 per year. It seemed like all of my classmates were getting paid close to $60,000, but the offers I received were much lower. I decided to accept the $30,000 per year mechanical engineering job with the mindset that I needed to get my foot in the door. Plus, it was closer to my girlfriend. The opportunity paid off since I received a $20,000 increase in salary after just 3 months on the job. While I was still in the bottom of the salary range, I was happy to receive such an increase in a short amount of time.

New Opportunities and Career Development

Fast forward 6 months and I received a new offer to join a huge well known process automation and control company with over 300 locations and 150,000 employees world wide. The offer? $52,000 as an Operational Excellence Engineer (Also known as Process Engineer, Continuous Improvement Engineer, and Change Agent). While it was only an increase of $2,000, the company, benefits, and cost of living were much better. By moving from the D.C. suburbs back to the Philadelphia area for this new job, my costs of living decreased by more than 60%. I also received an extra week of vacation and a generous 5% 401k Match.

I quickly learned that it is completely normal for engineers to receive annual merit increases ranging from 2%-3% for average performance, or up to 5% for the top performers. After 2 years, I applied for a job as an EHS Manager with the same employer. EHS stands for Environmental Health & Safety. I was awarded the position and kept my old position for a 50-50 split. While my responsibilities doubled, my salary improved by only 2%. After making large and successful culture and process improvement changes throughout the facility without any meaningful salary increases, I decided to go for my Masters degree and earn a few certifications in the process. My employer paid for half of my tuition and I earned my project management, OSHA 30 Hour, First Responder CPR, Agile, and Six Sigma Black Belt certifications.

Simply earning a higher degree or a plethora of certifications will not increase your salary with your current employer. Unfortunately the key to earning more money is to move from company to company. Once I earned my Master’s and my certifications, I moved to a new company working as a manufacturing engineer. With my fresh graduate degree, I accepted an offer that was 22% higher than my salary at the time. After receiving that huge boost, I felt rich. It was way more money than I was used to getting. I finally bought a car that had less than 100,000 miles on it. I was able to travel overseas each year. I was able to replace my free used furniture with a set of new furniture, and I was able to renovate the bedroom level of my house. Since then I have received annual merit increases of 3% – 4%.

Even now in my current role, my employer does not permit increases higher than 5% for annual merit increases and 8% for job promotions. I would need to switch to a new employer to get a larger increase. Many well known companies have similar limitations in salary growth.

In Conclusion

Don’t get caught up in the data you will read on salary estimate websites. If you get an offer, take it and don’t complain. Your first job will quickly open many opportunities for you to grow and develop as an engineer. With the broad engineering body of knowledge, you can easily branch out into many different engineering fields and job titles. You can even branch out into jobs that are completely unrelated to your field of engineering. Below are real life examples of how my friends, classmates, and family members have branched out after graduating with their engineering degrees.

Remember how I said that Software Engineering and Petroleum Engineering are the outliers? Software Engineering median salaries are higher because of places like Silicon Valley, where all engineering salaries skew the data. A starting salary of $120,000 with Apple or Google may seem like a lot of money but it is no different from getting paid $60,000 in Nevada. You have to consider income taxes and the cost of living. California has the highest cost of living and the highest income taxes around 12%. That means 12% of your paycheck is taken out for state income tax. In comparison, Nevada has no income tax and Pennsylvania charges around 3%. You can also buy a cozy studio apartment in LA for $1 million (or rent for $3000 per month) or you can buy a mansion in most other states for $1 million. Don’t let high Silicon Valley salary offers fool you. I have had friends go to California for the salary increase only to move back to avoid the taxes and high costs of living. Petroleum Engineers often have higher salaries because of their working conditions. Imagine commuting to work by helicopter on a dangerous ocean oil rig where you will live and work for 3 weeks at a time before taking a 1-2 week weekend. Not all Petroleum engineers work in oil rigs, but some do. If the field requires dangerous work or a poor work life balance, you can expect to earn a much higher starting salary of $80,000+.

Overall, the field of engineering pays a very comfortable salary for the middle class. Assuming you move around to different companies, most engineering fields in most states (except California) can expect to be earning around $100,000 within the first half of their careers. Any growth in salary after $100,000 will quickly decline as very few engineers will ever see $125,000+ with the title of “Engineer”. If you want to earn more, you will need to climb up the corporate ladder into leadership positions while negatively affecting your work-life balance. I think engineers have some of the best work-life balance with flexible schedules and 3-4 week annual vacation times. You don’t need to climb up the leadership ladder to enjoy life and live comfortably.

Comment below or contact me if you would like me to discuss anything specific around the topic of engineering. Subscribe here if you want to read more content on life as an engineer.