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Where Experienced Engineers Earn the Most, and the Shortfall of Petroleum Engineers

July 26, 2013 by Joshua Wright

In an enlightening CNNMoney article, a recruiter who specializes in locating oil and gas engineers declared that “it’s an all-out war for talent.” The market for experienced engineers is especially cutthroat — in oil and gas and elsewhere. This has led to quickly escalating wages for engineers in the United States, Canada, and other countries, just as we’d expect given the limited supply of highly skilled workers in any in-demand field.

To see where in the U.S. earnings are the highest for experienced engineers, we looked at EMSI’s detailed occupation wage information in Analyst. One of the neat things about EMSI’s labor market data is that we showcase what the BLS calls percentile wages — the percentage of workers in an occupation that earn less than a given wage and the percentage that earn more.

Engineers_WageCurvePercentile wages allow us to see the wage curve for any occupation, including the broad “engineers” category that encompasses 16 specific engineering job titles (from aerospace engineers to nuclear engineers). Wage curves can serve as a proxy for experience: entry-level workers are likely to be at the 10th or 25th percentile, and most experienced or management-level workers are likely to be at the 75th or 90th percentile.

These wage estimates are useful if you’re trying to figure out how competitive your region is for high-end jobs in any of the 700-plus classified occupations that the government tracks and we include in Analyst.

For this analysis, we looked at every metropolitan statistical area in the country to find metros that rank highest in two wage categories:

  1. The 90th percentile: These are metros with the highest top-end wages for engineers — 90% percent of workers in the field earn less; 10% earn more. These are presumably experienced engineers, or the ones who have risen quickly to management positions.
  2. The 10th percentile: These are metros with the highest entry-level wages for engineers. This gives us a good indication of where new engineers make the most.

At the Very Top

Nationally, engineers at the 90th percentile make $62.13 per hour, or $129,230 per year (see chart above). That’s a nice salary no doubt, but dozens of regions dwarf the national mark. And at the very top are oil and gas-dominated regions: Williston, N.D.; Midland, Texas; and Houston.

Several cities are at or near the top of the 10th percentile and 90th percentile rankings: San Jose, Anchorage, San Francisco, Williston, and Houston. Rochester, Minn., also offers competitive wages at both ends of the spectrum.

In Williston, engineer jobs have grown 175% (from 203 to 559) since 2010, when the area’s economic boom was in full bloom. Half of all engineers in Williston are, you guessed it, petroleum engineers — and they make $91.66 per hour at the median level. Why are petroleum engineers making so much in Williston and other places? There simply aren’t enough of them, and there aren’t enough graduates from U.S. schools (see our full discussion of this below).

The top 10% of all engineers in Williston make at least $127.86 per hour or $265,949 per year, which is 36% higher than Midland, the second-highest metro area at $94.27 per hour or $196,082 annually. Houston comes in third, at $178,838 — and it has added nearly 8,000 engineering jobs since 2010, the most in the nation.

Engineers_VeryTop_Wages

Other notable metros on this list:

  • Bloomington-Normal, Ill., is fourth, and the majority of engineers work in the corporate, subsidiary, and regional managing offices industry. State Farm Insurance is headquartered in this MSA.
  • San Jose is known as a computer/IT hub, but engineers have a considerable presence, too. And at the 90th percentile, they make the fifth-most among any MSA.
  • Idaho Falls holds a lofty spot in engineer wages for one reason: the Idaho National Lab. (Not included in this list because it’s so small is Los Alamos, which has the highest median wages for engineers in the country, at $72.30 per hour, also because of a national lab.)

Outside the top 10, other oil and gas-driven metros have high top-end wages (Beaumont-Port Arthur and Odessa in Texas), as well as other tech and innovation centers (San Francisco, Boulder, and Washington, D.C.). Los Angeles rounds out the top 15. We’ve included a larger list at the bottom of the post.

Metros with Highest Entry-Level Earnings

This list of cities looks quite different than the one we just discussed. The highest 10th percentile, or entry-level, earnings for engineers are found in Yuba City, Calif. — a metro with the third-highest unemployment rate, at 13.9%, in the nation among all MSAs as of May 2013. Over half of the estimated 419 engineers in Yuba City work in government, which perhaps explains the competitive starting wage level ($36.67 per hour or $76,274 per year). Yuba is above the national median salary (the 50th percentile) for engineers, but well below at the 90th percentile — so the earning potential isn’t as great as it is in some other cities. (Plus, engineering jobs have been stagnant since 2010 in Yuba City.)

Two other California metros are next on the list: Napa and San Jose. They’re followed by Decatur, Ala.; Anchorage, Alaska; Sacramento; Merced, Calif.; and Kennewick-Pasco-Richland, Wash. Most of these are strongly concentrated in government employment.

Several cities are at or near the top of the 10th percentile and 90th percentile rankings: San Jose, Anchorage, San Francisco, Williston, and Houston. Rochester, Minn., also offers competitive wages at both ends of the spectrum, thanks to a strong (but declining) electronic computer manufacturing industry that employs computer hardware engineers, among others.

Engineers_EntryLevel_Wages

 

The following table gives the 10th and 90th percentile wages for the metros where top-end wages are at or above the national median for engineers.

CityEngineers' 10th Percentile SalaryEngineers' 90th Percentile Salary
Williston, ND$65,229$265,949
Midland, TX$53,914$196,082
Houston-Sugar Land-Baytown, TX$64,438$178,838
Bloomington-Normal, IL$58,053$168,376
San Jose-Sunnyvale-Santa Clara, CA$72,322$160,846
Anchorage, AK$68,120$159,390
Tyler, TX$51,314$158,205
Idaho Falls, ID$57,470$154,960
New Orleans-Metairie-Kenner, LA$59,322$151,029
Rochester, MN$63,024$150,966
Boulder, CO$57,138$149,947
Beaumont-Port Arthur, TX$61,672$148,803
Odessa, TX$56,846$148,616
Washington-Arlington-Alexandria, DC-VA-MD-WV$62,982$147,222
San Francisco-Oakland-Fremont, CA$67,226$146,682
Los Angeles-Long Beach-Santa Ana, CA$60,258$144,040
Bakersfield-Delano, CA$62,525$142,230
Monroe, LA$48,339$142,064
Huntsville, AL$63,482$141,856
Oklahoma City, OK$52,125$141,648
Santa Barbara-Santa Maria-Goleta, CA$64,210$140,754
Bellingham, WA$64,043$140,629
Kankakee-Bradley, IL$43,493$140,546
Kennewick-Pasco-Richland, WA$65,520$138,798
Durham-Chapel Hill, NC$59,654$137,821
Dallas-Fort Worth-Arlington, TX$59,093$137,322
Corpus Christi, TX$57,970$136,906
Baton Rouge, LA$54,933$136,469
Knoxville, TN$50,731$136,094
Fort Collins-Loveland, CO$58,989$135,658
Atlantic City-Hammonton, NJ$58,074$135,533
Santa Rosa-Petaluma, CA$64,750$135,138
Austin-Round Rock-San Marcos, TX$55,494$135,138
Napa, CA$72,634$134,534
Poughkeepsie-Newburgh-Middletown, NY$63,211$134,514
Vallejo-Fairfield, CA$52,312$134,243
Binghamton, NY$55,474$134,202
Boston-Cambridge-Quincy, MA-NH$61,859$134,098
Sheboygan, WI$54,122$133,328
Baltimore-Towson, MD$53,706$133,266
Lafayette, LA$50,731$133,162
Savannah, GA$59,259$132,954
Oxnard-Thousand Oaks-Ventura, CA$62,483$132,787
Allentown-Bethlehem-Easton, PA-NJ$59,322$132,787
New York-Northern New Jersey-Long Island, NY-NJ-PA$59,259$132,704
Waco, TX$55,245$132,205
San Diego-Carlsbad-San Marcos, CA$60,674$132,184
Tulsa, OK$52,520$131,622
Wilmington, NC$56,722$131,498
Phoenix-Mesa-Glendale, AZ$56,867$131,394
Burlington-South Burlington, VT$56,680$131,352
Victoria, TX$53,165$130,749
Albuquerque, NM$61,714$130,478
Dayton, OH$56,909$130,291
Pueblo, CO$57,907$130,250
Greeley, CO$56,805$130,146
Tucson, AZ$59,675$129,522
San Antonio-New Braunfels, TX$54,122$129,314
Corvallis, OR$59,758$129,230
Source: QCEW Employees, Non-QCEW Employees & Self-Employed - EMSI 2013.2 Class of Worker

Shortfall of Petroleum Engineers

If there’s a real supply-and-demand engineering issue, it’s probably most acutely felt with petroleum engineers. The oil and gas boom has ratcheted up the need and wages for these highly paid engineers (median U.S. wage: $59.29 per hour). Meanwhile, U.S. universities and colleges produced a mere 1,594 petroleum engineering degrees in 2012. Contrast that with the demand: EMSI estimates 2,464 petroleum engineer job openings in the 2013 calendar year, with 654 in Houston alone. That’s a substantial shortfall of new entrants into the petroleum engineering market nationwide.

PetroEngineers_SupplyDemand

National median earnings for petroleum engineers are $58.77 per hour or $122,241 annually — the highest median earnings for any engineering occupation. Aerospace engineers and nuclear engineers are the next best paid, at $49.24 and $47.94 per hour, respectively.

Data shown in this post comes from Analyst, EMSI’s web-based labor market data and analysis tool. To look at engineering wages and jobs in your region or for more information on EMSI, contact Josh Wright (jwright@economicmodeling.com). Follow Wright on Twitter at @ByJoshWright and EMSI @DesktopEcon. Illustration by Mark Beauchamp.

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