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Re: The Myth of Inadequate Structural Engineering Compensation

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Stan Caldwell wrote:
SEAINT Readers:
 
Let me start with an admission.  I make a very good living and I always have.  It is more money than I need and more than I can reasonably spend (my wife would disagree), so I routinely throw a lot of it away in the stock market.  I am not unique.  All of the licensed professional engineers on my staff annually make more than $100K, and I know dozens of structural engineers in Texas and around the country that annually make more than $200K.  The idea that structural engineers are not well-compensated is simply a myth.  Any structural engineer who puts his/her mind to it and applies themselves should be able to achieve annual compensation of at least $[3xAGE]K.  If that engineer is lucky enough to live in Texas, he/she pays no state income tax and probably bought a big brick house with a pool in a desirable neighborhood for less than $100/sf.
Stan, with all respect - in fact, with my compliments - you operate in a rather different environment than many structural engineers. I believe that Halff is quite involved in public sector work. That's a far more lucrative sector of the engineering economy than most other.

I know that the typical private-sector engineering firm - even the big engineer-contractors - can typically expect a 2-3% annual ROE. I believe the average for all engineering firms, large and small, is somewhere in the neighborhood of 6-8%.

Some years ago when I worked at a Texas firm that was similar to Halff in the type of work it did, it was not uncommon to see between 10 and 20% ROE. Again, that's not a criticism or a slight, it's just a recognition that all engineering business is not created equal.

The same is true in other areas, such as medicine. A plastic surgeon is going to be able to roll in it for much of his life whereas a pediatrician is definitely the guy next door in your neighborhood.

Many of the people here on SEAINT are small operators, some of them sole proprietors. They are sort of (again, meaning no disrespect) the "bottom feeders" of our profession, taking work that large firms such as yours wouldn't even dream of doing. They do it for the enjoyment and they do it because they choose to do it. But they don't necessarily do it because they are privileged to charge whatever they want to charge. It is understandable, though, that sometimes they would get a bit frustrated. I'm not working for myself any longer for the simple reason that I just couldn't make enough money working in that environment to allow me to raise the "second family" that was suddenly thrust upon me.

In the end, you need to decide what's important to you. It is true that you can make money in engineering - hey, even as a STRUCTURAL engineer. But if you want to make LOTS of money, you will have to take greater risks, be willing to press the flesh and make the industry and/or political contacts you need, network a lot, hire employees and do what a real entrepeneur has to do. There are many engineers who don't really want to do that - I was somewhere in the middle, FWIW.

I agree that it's unfair to expect to just hang out your shingle and charge whatever you want to charge. We still operate in a free market, which is the worst business environment in the world, except for all the others. You have to work. You aren't going to get bailed out with someone else's money - I don't care what The One told you during the election campaign.

There comes a time when the investment pays off, and you are able to downshift a bit. Things begin to run themselves (under the tutelage of your faithful senior employees, that is).

But not before a lot of blood, sweat, and tears.

I think that your story is correct - IF you put it in the right context. It is ridiculous for well-educated engineers to believe that the world, or society, or the current administration, "owes" them an easy path to wealth and happiness. That is NEVER true, anywhere. Even the billionaire narco-terrorists in Mexico have to put in a lot of hours.

Young engineers should understand that you can make a very good living, but ONLY if you're willing to work hard, take risks, and expect to have to go through the tough times. There's no linear path to success.
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