<p>People are not paid based upon intellectual worth.</p>
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<p>You’re not selling “fantastic ideas” in most engineering endeavors. You’re selling engineering know-how. You have to have a ton of experience with high-caliber projects to gain that know-how. You have to join a high-caliber company to get that high-caliber experience.</p>
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<p>I agree with you - the owners are smart and they make the great bulk of the money. And by ‘owners’, we would have to include the financiers, such as the venture capitalists. I therefore have to disagree that the owners are generally the ‘first engineers’, or even the founders, as the venture capitalists generally end up controlling more of the equity and board seats than the founders do. </p>
<p>In fact, on a risk-adjusted basis, the financiers are almost certainly smarter than the founders are, and are therefore clearly smarter than the engineers. For every Google or Microsoft, thousands of failed startups abound. A venture capitalist can diversify his risk across a portfolio of startup investments, most of which will fail, but a small fraction which will succeed. But a tech entrepreneur can do no such thing. Moreover, a venture capitalist will still be paid the requisite management and transaction fees even if all of his investments in his fund fail. The entrepreneurs of a failed investment receive nothing. Most people are risk-averse - most of us would rather take a guaranteed $1 million rather than a 50% of receiving $3 million (but a 50% chance of nothing). </p>
<p>The bottom line is that financiers can and do diversify their financial capital, but engineers (and entrepreneurs) are unable to diversify their human capital. That ultimately means that the engineers are stuck with a disproportionate amount of risk relative to their reward.</p>
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<p>Yet that is precisely what happens in the finance and consulting industries. These industries have convinced an entire generation of top-level managers and board directors to take advice rendered from young, inexperienced associates not far removed from school graduation - and not necessarily having even graduated in something relevant to the business at hand - and paying handsomely for the privilege! How top managers were convinced to pay for expensive advice from such younglings is one of the great open questions in modern-day capitalism, an absurdity that has been noted repeatedly by numerous industry insiders.</p>
<p>*During the seven years that I worked as a management consultant, I spent a lot of time trying to look older than I was. I became pretty good at furrowing my brow and putting on somber expressions. Those who saw through my disguise assumed I made up for my youth with a fabulous education in management. They were wrong about that. I don’t have an M.B.A. I have a doctoral degree in philosophy—nineteenth-century German philosophy, to be precise. Before I took a job telling managers of large corporations things that they arguably should have known already, my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry…The strange thing about my utter lack of education in management was that it didn’t seem to matter *</p>
<p>[The</a> Management Myth - Magazine - The Atlantic](<a href=“http://www.theatlantic.com/magazine/archive/2006/06/the-management-myth/4883/]The”>The Management Myth - The Atlantic)</p>
<p>*To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.</p>
<p>I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. **I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance…Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility…
** *</p>
<p>[The</a> End Of Wall Streets Boom - News Markets - Portfolio.com](<a href=“http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom]The”>http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom)</p>
<p>That begs the question: why would an engineer with 5 years of top-flight engineering experience be laughed out of the room by the company board if he tried to pitch an engineering project, but that same board evidently has no problem with a consultant with 5 years (or less) of relevant experience pitching a multimillion dollar project to aid them craft their company ‘strategy’? Perhaps that engineer should simply relabel herself as a “consultant” and she’ll immediately perk the ears of that board. </p>
<p>Which harkens back to a point I’ve made on other threads. Many engineering companies who claim to lack the funds to improve the salaries of their engineers are often times the very same companies who seem to have no problem spending small fortunes on consulting and financial services , which, as explained above, are often times provided by associates who, frankly, have limited expertise in the services they are providing.</p>
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<p>…and can you imagine what would happen if someone in structural engineering inevitably screwed up because of their inexperience? Death. Catastrophe. People have seen structural failures too many times, they’ve got too many visual images of twisted metal burned into their minds to forget to hire someone with experience. Maybe in finance or consulting, someone can convince a board room to hand over a project to a young financier or consultant, but not so in structural engineering. (Given the recent publicity of the economic mess, I think that the business world is going to start undergoing the same sort of scrutiny that we’ve had to deal with for years in our industry, but that’s another thread.) </p>
<p>Someone my age flat-out does not have the know-how to develop a skyscraper on their own. More than book-learnin’ and gut instinct is required for engineering. I’m confident that I’m better than 98% of the 28-year-old structural engineers out there, but I would be remiss and hubristic if I thought I could foresee all of the critical, life-safety issues that a large, once-in-a-lifetime project would present. I could lose my license, lose my home and fortune, even be held for manslaughter or negligent homicide if I were to strike out on my own in an overly-confident manner. There are far less dire consequences to error in the field of business. </p>
<p>It’s just not as simple as you’re making it out to be. If you were in the field, I think you’d be able to see more of the subtleties that you’re missing as you draw these conclusions, but the bottom line is that if I want to do the things that I do, this is how I have to do them… To protect the public, to protect myself and my assets, to protect my future career. I can’t afford to take such risks because the consequences are too high, and they’re too likely to happen if I’m not cautious. If I am cautious, then I won’t be economical. If I’m not economical, I won’t get hired, and round and round we go. </p>
<p>I like what I do. I drove by my jobsite yesterday evening around dusk, saw my new high-rise hospital rising amid the gem-like metropolis surrounding it. I’m proud of what I do. I don’t think I could give that up to switch to consulting, not for something as seemingly insignificant as money. I have few doubts that I would excel at consulting, but I don’t care for the notion of representing myself as some young hotshot (though with my credentials, I could get away with it) just for the sake of getting more money. If I have limited expertise in something, I don’t want to provide a service in it, because it’s wrong to do so. I feel that it’s ethically cloudy. </p>
<p>Something that engineering has always had is integrity. I’m proud of that, and it represents my values. Maybe I’ll get paid less as a result. I’ll always try to get paid more, and I’ll always push for that, but it won’t drive me away from this field because I like my profession too much.</p>
<p>^the gentleman touched upon something very important: integrity. In the law and finance worlds individuals deal with situations that may be ethically “gray” areas; generally, people that walk that fine line need to be paid more.</p>
<p>In the case of medicine, doctors earn high salaries due to insurance fees and the astronomical loans they must pay back. The salaries of doctors would be a whole much lower otherwise.</p>
<p>Gentlewoman. I’m a she. (Hmm, it’s been a while since that’s happened around here.)</p>
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<p>But I disagree with you here. I think that this sort of thinking rewards people who don’t care about being ethically “gray”. It doesn’t disincentivize people from being evil snakes, which I think may be why they get more money… They have no qualms about leaning towards extortional methods… But you see the sort of mess that walking ethically “gray” areas in the business arena can get us into now.</p>
<p>^Pardonez moi, s’il vous plait, madame. Je suis encore noveau ici. </p>
<p>My point was that people who work in these “gray” areas generally demand more compensation due to the increased risk. I do not agree with those practices, however.</p>
<p>The fact is that if an engineer thinks a lawyer’s job is worth the money, they should be a lawyer. The fact that they know they make less money and still choose to be engineers is indicative of something… the utility isn’t based on income alone. You have training, interest, stress, hours, and satisfaction to contend with.</p>
<p>If engineers will work for less money than they could, it would be folly to arbitrarily give the more money. That’s not how economics works.</p>
<p>^c’est bien.</p>
<p>I’m not sure that’s the reason that finance/law has higher salaries, though. </p>
<p>My best friend, a Harvard grad and recent MBA, is in marketing and finance. She’s generally very well-versed in economics and financial matters, so when she got her first gig out of business school and apologetically told me, “I could’ve gotten more than 90K, but I knew that this would be stable… I like the company, and I knew I wouldn’t get laid off in a year, so…” She shrugged. I snickered and said, “Sweetie, how much do you think I make?” She laughed and said, “A lot more than that!” I told her that I made a little over two thirds her salary and I’ve never seen her jaw drop like that. The perceived risk of my job, the specialized training and licensure required, and the responsibilities that go along with what I do were so much more intense for her that she couldn’t imagine me making the salary that I make.</p>
<p>So I don’t think it’s a matter of payment-for-risk.</p>
<p>(Sure wish I could get my clients to feel the same way my friend feels about my value as a professional!)</p>
<p>An engineers knowledge to pay ratio is</p>
<p>OVER NINE THOOOOOOOUUUUUSSSAAAAND!!!</p>
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<p>I am not sure whether to +1 or -1 the use of a meme such as this, but I laughed if its any consolation.</p>
<p>I think aibarr is right.</p>
<p>Engineers don’t get paid as much as lawyers and MBA’s because engineers enjoy the job not the money. Traders and iBankers get paid lots of money to hate their jobs and lose their life.</p>
<p>Engineers get paid to cover living expenses and build cool stuff. </p>
<p>In what other career can you look over your own build site and say “I designed this?”</p>
<p>And I thought I was the only one who knew about vegeta on this forum. Too many nerds here. </p>
<p>That said … LMAO! it’s true, we should earn much more than the current rates.</p>
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<p>Well, first, considering we are all engineers, that means we are all nerds in some way whether we admit it or not. Second, any of us that were in the later stages of grade school or early middle school when Toonami was on Cartoon Network probably know what that quote is from, and knew it well before it became a meme.</p>
<p>^ actually i was in college when this meme was popularized via sites like reddit and digg( as far as I’m concerned). When the episode was first aired way long ago, this wasn’t even close to popularity since everyone was too busy with pokemon and digimon( hate both of them).</p>
<p>Not all engineers are nerdy though… I think you meant “geeky”. Geeks play with technology and often know a lot more about anime than anything else. Nerds make these “geeky” devices… the relationship is sibling-like.</p>
<p>I meant people who actually saw it long before it was a popular internet meme. A lot of people I know saw that when we as (misguided) kids saw the show when it aired for real.</p>
<p>I suppose geek would be a better word. Still, I would argue that everyone is a little bit geeky in some way, whether they admit it or not. The ones who won’t admit it just suppress it and generally run with a crowd that also suppresses it. The rest of us are perfectly happy being geeky. hehe</p>
<p>^ Speak for yourself, I’m no geek.</p>
<p>Well after reading through the what sakky and aibarr posted, I feel sympathetic toward all the engineers who got robbed of their right to their fame and money during their engineer career. It’s really sad that only few selected PhD engineers and start up entrepreneurs in technology industry are living large where rest of engineers who support it are underpaid for their contribution to the advancement of technology.</p>
<p>Even though engineers who works at BMW may design the best cars in the world, but they won’t be able to own the best car which they designed.</p>
<p>Another example is AT&T Bell lab. Where the inventor of transistor got robbed of his invention to his manager as co-inventor. “Oh you made some modification to my invention? Now step aside so I can take the credit for your invention as mine by position myself in middle of the picture and you beside me since you work for me.” </p>
<p>Well unless the capitalism and current form of government change to favor engineers, we will undoubtably be sluggish on our technology advancement. I think the period of war is best time for engineer to flourish since government is backing technology to the fullest extent. Sad reality really.</p>
<p>CSmajor, that was well said. Sadly now ‘they’ are expecting the world to invest in science because of global warming…thats not happening, war worked because that technology kept us safe today. global warming is too long term, people inherently don’t think long term. Kind of thought the competition with Russia in the context of space program was another example of a driving force for scientific advancements. We need somethin! Germany does so much cool stuff because they have to do it, they don’t have **** for natural resources. We got all the coal in the world and cheap oil prices from the saudi’s/canadians…</p>
<p>I’ve never seen so much whining in my life. Lets all just sit around and cry because engineers don’t make millions a year. If you want to be an investment banker do it. No one is holding you back. Sitting around and complaining does nothing. It’s like people think engineers make minimum wage while all lawyers or doctors are making millions. This is not true. Everyone thinks they are underpaid. I know doctors and lawyers that think this. But enough of the insinuations that engineers live a life of poverty and sadness. Actually, plenty of engineers drive BMWs CSmajor. I know many that do and I would be willing to bet many BMW engineers own BMWs.</p>