Why are engineering salaries so poor in the UK? Or, why does the US pay so well?

[tom66]

I am an electronic engineer and I get paid £32k per year in Leeds.  After tax, that's ~£24k.  I have about five years of experience.  I have never received an offer in my region above £35k,  and even in the South of England (London, etc), the best salaries I see are £55k.  According to data,  the average salary is about £42k.

Compare this to the USA:  Average salaries are $75k,  but 25% of engineers earn over $94k.  That's £55k - £70k in British money - neglecting the fact that US dollars buy more anyway and that the cost of living in (most areas) of the USA is lower than the UK.   

Australia and New Zealand have similar average salary ranges to the UK, although the top end of the market appears a little better.  I see offers for $120kAUD in Australia - though no idea if this is common or realistic.   Canada pays slightly better than these -- but again the salaries are so much better in the USA by at least 20%.

These are all English speaking countries so I would have thought that skilled immigration would even out gaps in employment levels, yet the US always jumps ahead of the pack.

What is the cause for the difference in salaries?  Is it supply and demand?  Better productivity?  Longer hours?

[Yansi]

Dude! What are you bitching about? Here we get like down to half that you get in the UK... Which understandably sucks and pushes masses to not enter any engineering fields.

[TK]

I think they are equivalent (or even favorable to UK) after you discount the cost of health care, education, paid vacation days, etc.

There is a good documentary called Where to Invade Next, by Michael Moore.

[JohnnyMalaria]

Same is true in the pharmaceutical industry.

One reason is the all the stuff you have to pay a fortune for such as child daycare, health insurance, dental insurance, paying off your tuition fees, more expensive phone/internet, utilities in general (gas, electric). For the latter, take the UK quarterly bill and that's the monthly here (in my experience). Also, putting money aside to pay for children's education (tuition fees), saving for retirement. I can't remember how that was in the UK when I moved -  I know it was transitioning from SERPS to private. If, like me, you don't have kids then you're quids dollars in Even more so if, like me, you didn't pay a single penny for your education in the UK (bloody socialists).

[PChi]

My guess is that the electronics industry in the UK is gradually shrinking so the pay is poor because of market forces. Also there is very little understanding or appreciation for engineeing even within the business so failure is built in.

[ajb]

Salaries in the US also vary quite widely between regions and between specific disciplines.  Averages are also dragged up quite a bit by places that pay absurd salaries, particularly in the software market--but many of those salaries lose a bit of their luster when you look at the cost of living you have to deal with to get them.

[rstofer]

I can remember when 'back east' companies came out to Silicon Valley.  They had a corporate wide pay structure that didn't account for differences in cost of living.  They had a hard time recruiting and retaining in the Valley because their 'back east' pay scales didn't cut it.

Why do engineers make so much money in Silicon Valley?  Because they're worth it!  That and the law of supply and demand.  Unfortunately, that same law applies to housing.  A month or so back, an 850 square foot post war house sold for $2M.

https://sf.curbed.com/2018/3/2/17073100/silicon-valley-house-home-sunnyvale-record-price-crisis


So, if you're coming to the Valley from anywhere else, you probably can't afford to live anywhere near where you work.  Plan on commuting from 60+ miles away.  Even then, it's iffy.  Maybe at 90 miles you can get into a decent house for a more or less reasonable price.

Even better, buy a larger sail boat (40-50 feet) and live aboard up in Alameda (60 mile commute).  Right across the estuary from Jack London Square, a few miles away from SF Pier 39, great sailing.  I had a smaller sailboat there for 20+ years.  Too small to live on but the idea was there.

Or, wait for the next downturn and buy in when you can.  For ex-military, make sure you consider your GI Bill benefits.  In these high dollar areas, the amount guaranteed by .gov means the part you have to finance separately is likely to be quite low.  You need 20% down on the excess of what the VA covers.

I don't live in the high dollar area but the VA covers $417k around here so most houses are fully covered.  There is no down payment and no Primary Mortgage Insurance.  For a $500k house, the own payment would be 20% of ($500k -$417k or $17k)  Just a little side benefit of spending a couple of years in the Army.

There's a lot of magic coming out of Silicon Valley.  You can expect that there are some fairly bright engineers creating it.

[BrianHG]

To fund my startup and live myself, it would cost me 3x to 4x less to do it here in Montreal instead of Silicon Valley.  With the savings, I would just have to fly first class, plus 2 partners, and pay for hotels in Silicon Valley around 3 times a year and I would still save big$$$.

But if I want things to move faster and be available in the California area for both Silicon Valley and LA, is the 4x expense worth it?  That's a tough one.  Whichever I choose, at least I have access to a good talent pool of engineers and media designers here in Montreal, especially if I offer just 60% of top tier Silicon Valley salaries for those key head positions, I'll own almost whoever I want.

[coppice]

Its all a matter of supply and demand. UK electronics salaries were never great, but when there was demand for engineers salaries were better than they are today. Now there is very little electronic engineering work in the UK, and most of what remains is not exactly leading edge, salaries have adjusted accordingly.

[coppice]

Why do engineers make so much money in Silicon Valley?  Because they're worth it!  That and the law of supply and demand.

I think you misunderstand the concept of supply and demand. Demand for engineers in Silicon Valley outstrips supply, so salaries rise. The supply is low because its so expensive living in Silicon Valley that people are reluctant to move in. The "worth" of the engineers has little to do with it.

[Gyro]

That certainly holds up for some I've worked with!

There were some very good ones, including my boss, but there were some truly hopeless ones too. Typical cross section in fact.

[rstofer]

Why do engineers make so much money in Silicon Valley?  Because they're worth it!  That and the law of supply and demand.

I think you misunderstand the concept of supply and demand. Demand for engineers in Silicon Valley outstrips supply, so salaries rise. The supply is low because its so expensive living in Silicon Valley that people are reluctant to move in. The "worth" of the engineers has little to do with it.

I'm pretty sure I understand supply and demand.  The 'because they're worth it' was facetious.  Originally...
On reflection, it's true.  Try to bring a product to market without engineers and code weenies.  If the companies could succeed while paying less, they certainly would.

Supply and demand (specifically lack of demand) is why mechanical engineers typically make about 80% of an EEs salary.

If you want to find out what certain jobs pay, go to the Bureau of Labor Statistics and search for appropriate titles.  Then you can drill down and find out what the jobs pay in certain locales.  It's a handy tool for career planning.

https://www.bls.gov/

I'm reasonably sure that some other agency publishes cost of living (or perhaps housing) for the various locales.  It would be interesting to correlate cost of living versus salary.  And another agency can tell you about weather.  Some people want to live where it snows and others only want to see it on a postcard.

One problem with the BLS data is that, within a job title, it isn't very granular.  Electrical engineers are all lumped together.  This means that utility electrical is munged with all other flavors.  There is a category for computer engineers and a couple for software engineers and they do break out programmers. So, the data has to be thought through.  When you look at EE salaries in Silicon Valley, it's pretty clear that it doesn't include utility engineers.

[BrianHG]

If you want to find out what certain jobs pay, go to the Bureau of Labor Statistics and search for appropriate titles.  Then you can drill down and find out what the jobs pay in certain locales.  It's a handy tool for career planning.

https://www.bls.gov/

I'm reasonably sure that some other agency publishes cost of living (or perhaps housing) for the various locales.  It would be interesting to correlate cost of living versus salary.  And another agency can tell you about weather.  Some people want to live where it snows and others only want to see it on a postcard.

Thanks! 

[CatalinaWOW]

The way to make out in the US is to work for a company that is based in the Silicon Valley and has nationwide operations with a single payscale.  Getting Silicon Valley pay while living at Dallas/Ft. Worth cost of living works really well. 

Not always easy to land those gigs, and for fairly obvious reasons they have relatively low turnover.  Best way is probably to start in the Valley and then get a transfer.  Also requires comfort with the climate (both physical and social) at the low cost location, but there really are some very nice low cost places.

To OPs question, it is because companies find they don't have to pay more to get and hold engineers.  The salary plus all the other factors (home country, benefits, ....) are sufficient for a sufficient number of people.  Complicated way to say supply and demand.

[Harb]

I am an Engineer in the TV and occasionally Radio Broadcast industry, but I have been pretty lucky to own my own TV Outside Broadcast business for most of my life, so I have never really worked for another company on a permanent basis so I cant really say what the wages are like, other than I do a lot of contract work these days.........I have worked for a UK owned company operating here from time to time, and they pay really well....better than the US, so maybe it more of a "we pay what we have to" thing in the UK.......32k pounds sounds like pretty ordinary pay to me.....maybe the job requires less there than here or in the US ?
120k here leaves you with a lot of responsibilities, but I have heard of OB engineers that earn a lot less, but do a lot less too.......to get to the high end you really have to be on your game and be prepared for all the downsides of the job.
A lot of Day labour with plain old day rates seem to keep the show going here too .

[DaveW]

Slightly less general points, but speaking as an engineer in the UK, the salaries can be better than what you're citing in the first post. From my teams, trick is to have a specialisation which is in demand without going too narrow and niche. On my teams I've had people north of that figure as RF experts, people with DV clearances, analogue experts and a few others I've forgotten. Or you can go the dark side and go team leader/management.
Will be interesting to see if this matches more general experience, but after 5 years I'd expect to see around senior level, starting to mentor people and hitting a salary over 40k. Not a bad life all in all when you factor (generally speaking) having an interesting job...

[Rick Law]

Salaries in the US also vary quite widely between regions and between specific disciplines.  Averages are also dragged up quite a bit by places that pay absurd salaries, particularly in the software market--but many of those salaries lose a bit of their luster when you look at the cost of living you have to deal with to get them.

Even a couple of decades ago, a programmer in New York City would make $10K-$12K more than merely a few miles away across the river in Jersey city.  Cost of living, commuting, etc.  By now, I think most programming jobs are out of NYC already into the lower cost area.

While the employees see only a final number, standard practice of setting salary typically would be have a component based on zip code.

Besides cost of living, local regulations and local union rules matter too.  In some areas, there is (was?) a "telecommute" push where employers are pushed by the locales to have x% doing telecommute or have flex hours to lower the rush hour traffic or the employer faces a financial penalty.  That of course merely lowers the income of the employee by the same percentage.  (How come the town council never thought of that is beyond me.  They really think that employers will not move employees out, or somehow agree to operate in the red.)

[David Chamberlain]

I have been pretty lucky to own my own TV

What? You own your own TV on an engineers salary. Well mr fancy pants

[David Chamberlain]

More seriously in Australia the average seems to be 70 to 80k staring and upwards for graduate with 2 to 5 years experience. Cost of living (at least from my perspective) is low. Specifically im talking EE.

I drive 40km one way (25 miles) and traffic is not so bad.(have lived in UK so know what bad is)

[lee_chen]

I am a radio engineer and  i have about three years of experience，but i just got your half income,less benefits... this is fact you have to face it .

[Rick Law]

I am a radio engineer and  i have about three years of experience，but i just got your half income,less benefits... this is fact you have to face it .

Your purchasing power is likely more than 1/2 his.  Depending on where you are in China, as measured by PP, you could be far better off (financially) than he is.

It is perhaps a natural law of business that businesses seeks to lower cost by outsourcing.  It would be smart for higher cost countries/locales to climb the value tree to make their higher cost worth the extra.  Trouble is, politicians rarely understand that.  They merely try to attack the symptom but not the illness.  Move such as mandating a minimum wage of X$/hr for job Y doesn't increase the value of the resulting product of job Y.  It merely decreases the value of X$ to the value job Y.  So, eventually, their constituency suffer.

This is coursed not problem with the OP's country alone.  Merely a year ago, by widely published data, USA's living standard felt to that of 30 years ago.  With the new administration, we climbed back but that is a short term thing.  We need to develop and implement policies necessary to make sure that our productivity (in terms of value created) increase corresponding to the living standard we desire.

I am retired.  So, I have an overwhelming desire to ensure that the $X I saved for retirement continue to have the same value rather than seeing it decline to match the lower value of "value created by job Y".  So, it is a problem not just for the working alone.  UK (the OP's locale), USA, and probably anywhere else in the world all need better politicians.

[Harb]

I have been pretty lucky to own my own TV

What? You own your own TV on an engineers salary. Well mr fancy pants

I've actually got 2 that I own, but the 3rd one is going to have to go on long term payments lol.......

I guess the main thing is you have to enjoy what you do, and thats worth something as well.

I started out just working by myself and spent quiet a bit of time out in the field, which I really love the most....I just am the sort of person who likes it outside I guess........when I got into the OB business that kind of killed that, but I am retiring....sort of.....and I am again getting to do some  subcontract outside stuff which again brings me joy.....So long story short, as long as you dont hate what you are doing, maybe a bit less money is ok......

[VK3DRB]

I have been pretty lucky to own my own TV

What? You own your own TV on an engineers salary. Well mr fancy pants

But Mr. High N. Mighty did not tell you it was an old black and white TV. 

Becoming an engineer for the money or to attract chicks is a bit short sighted really, especially if you end up living in a single room bedsit and your only choice in going on a date is sharing can of spam with the cleaning lady whilst watching Coronation Street on your 17 inch VGA computer monitor . Money does not buy happiness, but having a low VSWR on your home brew antenna can bring you great joy .

Seriously, first and foremost people should only go into electrical/electronics engineering because they have a passion for it, not because of the money. Most engineers are comfortable, but never rich.

[BNElecEng]

Slightly less general points, but speaking as an engineer in the UK, the salaries can be better than what you're citing in the first post. From my teams, trick is to have a specialisation which is in demand without going too narrow and niche. On my teams I've had people north of that figure as RF experts, people with DV clearances, analogue experts and a few others I've forgotten. Or you can go the dark side and go team leader/management.
Will be interesting to see if this matches more general experience, but after 5 years I'd expect to see around senior level, starting to mentor people and hitting a salary over 40k. Not a bad life all in all when you factor (generally speaking) having an interesting job...

My feelings are along the same lines as DaveW.
The company I work for is based around Bedford and their structure is along these lines. Of the roughly 55 employees, there are 10 engineers with varying levels of experience. A fresh graduate pretty much has to eat humble pie for a couple of years but once they start coming into their own and contribute in a meaningful way, their salaries begin to climb rapidly. After the 5-6 year experience mark, they can expect to earn over £45k.
Graduates with a Masters or a PhD have slightly higher salaries, but it does taper off at the top end where experience counts more.
The most senior engineer doesn't have any university education, only the training he received in Avionics in the air force. He is a walking library of information who is ready to teach any who want to learn.

[a59d1]

Slightly less general points, but speaking as an engineer in the UK, the salaries can be better than what you're citing in the first post. From my teams, trick is to have a specialisation which is in demand without going too narrow and niche. On my teams I've had people north of that figure as RF experts, people with DV clearances, analogue experts and a few others I've forgotten. Or you can go the dark side and go team leader/management.
Will be interesting to see if this matches more general experience, but after 5 years I'd expect to see around senior level, starting to mentor people and hitting a salary over 40k. Not a bad life all in all when you factor (generally speaking) having an interesting job...

My feelings are along the same lines as DaveW.
The company I work for is based around Bedford and their structure is along these lines. Of the roughly 55 employees, there are 10 engineers with varying levels of experience. A fresh graduate pretty much has to eat humble pie for a couple of years but once they start coming into their own and contribute in a meaningful way, their salaries begin to climb rapidly. After the 5-6 year experience mark, they can expect to earn over £45k.
Graduates with a Masters or a PhD have slightly higher salaries, but it does taper off at the top end where experience counts more.
The most senior engineer doesn't have any university education, only the training he received in Avionics in the air force. He is a walking library of information who is ready to teach any who want to learn.

A driven, excellent EE with an MS from a reputable school in the US has a good chance of making above 50 k$ right out if they apply to a growing company. Is your cost of living very low or is your company contracting? I would definitely not even apply to a company if it took me 6 years to crest the 45 k$ mark. You must be hiring some awfully weak engineers.