The average U.S. engineer now makes $102,748 in salary and bonuses, marking the first time EEs have reached six figures in the four years that we've done our salary surveys. And there's more good news, as the engineering and tech services industry added 66,300 jobs last year, putting that number at an all-time high.
But there are troublesome signs behind this rosy picture. While base salaries are up 7%, bonuses are flat. Stock options and other perks, which have historically been an important component of an engineer's compensation, are down by 3%. What's more, the average pay for engineers ages 24 and under - precisely the people the industry needs to attract and keep - dipped 4%.
Job Growth Fuels Higher Incomes
According to a report released earlier this year by the AeA (formerly the American Electronics Association), based on U.S. Bureau of Labor Statistics (BLS) data, U.S. high-tech industries saw significant job growth for the second year in a row - and the unemployment rate for EEs is now below 2%. The report shows that the high-tech industry added nearly 150,000 net jobs for a total of 5.8 million in the United States. This growth is greater than the 87,400 jobs added the prior year, and the two years of growth cumulatively represent an increase of 4%.
"We are pleased to see the rebounding of the tech industry," said William T. Archey, president and CEO of AeA. "This is the second year in a row that tech industry employment has added jobs. Not only do these jobs make critical contributions to the U.S. economy, but they also pay extremely well. The average tech industry wage is 86% more than the average U.S. private sector wage. In fact, in 48 'cyberstates,' the average high-tech wage is at least 50% more than the average private sector wage, and in 10 of these states the differential is over 90%."
Despite these increases, the AeA noted that the industry still faces significant challenges. "Companies of all sizes continue to have problems recruiting highly qualified and educated individuals to work for them, whether those individuals are foreign or domestic," Archey said. "This was reflected in the 2.5% unemployment rate for computer scientists and the below 2% unemployment rate for engineers in 2006."
As Archey sees it, the problem is twofold: first, the lack of American students enrolling in and graduating from math, science, and engineering programs; and second, a broken U.S. visa system. This April, within two days of the start of accepting applications, the U.S. government received 133,000 applications for 65,000 H-1B visas - i.e., those reserved for highly skilled individuals. And these applicants were looking for jobs that didn't start until this month.
An examination of market sectors reveals that the high-tech manufacturing industry added 5100 net jobs. The semiconductor industry also grew significantly, gaining 10,900 jobs. Software services and engineering and tech services employment were up for the third year in a row, increasing by 88,500 jobs and 66,300 jobs, respectively. Only the communications services industry continues to struggle, losing 13,300 net jobs in 2006.
On a state-by-state basis, tech employment gains occurred in 40 states. The last time so many states saw this much tech job growth was 2000, the last year of the dotcom bubble. While it's no surprise that California led the nation in net job creation, it may be news to some that Florida saw the second largest gain - adding 10,900 tech jobs.
This was the second year in a row that Florida was among the top five states by tech employment creation. Florida was also number one in rate of growth (+4.1%), followed by Virginia (+3.0%). Virginia had the added distinction of leading the nation with the highest concentration of tech industry workers as a percent of the private sector workforce (8.9%). Previously, Colorado had held that position.
The AeA report additionally found that venture capital investment in the technology industry rose last year by $285 million to $12.7 billion. In fact, high tech now accounts for a full half of all venture capital investments in the nation.
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