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Starting Salaries: College Grads

My son is a high school senior, so the angst is rising about applying to colleges, wondering about majors, and, generally, life choices. This got me thinking: what does the PayScale salary data tell us about colleges, majors, careers, and income? It turns out that the PayScale data has a lot to say.

Of course, our data are about price, not value: how much people are paid to follow a given path, not whether that life is worth living. Yes, a chemical engineering major will receive a higher starting salary than a philosophy major. Whether the pay is worth ruining one's college years is not something PayScale data can answer :-)

In this post, I'll look at the obvious: what college majors lead to the highest pay straight out of school. Future posts will cover pay for majors 10 and 20 years out, differences between colleges - is the Ivy League worth the money? - and other interesting factoids, like that the chairman of PayScale, and CEO of Drugstrore.com, both were music majors at small liberal arts colleges.

How does your salary rank among engineers and the rest? Find out with our salary calculator.

Software Engineer Salaries

Software engineers are in demand, because fewer people are majoring in that field. Dale Welch, of the staffing firm Winter, Wyman & Co, says that there will be growth in careers in software engineering. He told Money.CNN.com, "This year we're seeing starting offers as high as $90,000 for top MIT grads. The norm seems to be between $60,000 and $70,000." This is consistent with the PayScale data; we see beginning software developers earning an average salary of $65,700 in the past year.

Supply Chain Accounting Principles and Pay

Ernst & Young has reportedly increased the hiring of college grads with accounting degrees by 47%. In 2004, they hired 3,645, compared to the 5,380 the firm hired in 2006. The PayScale average accountant salary is between $45,000 and $75,000, depending on experience and location. The experts at MarketWatch say that other companies hunting for accountants include General Electric, Johnson & Johnson, and Procter & Gamble.

Accounting is on the list highest paid majors, for starting salaries, according to a survey by the National Association of Colleges and Employers (NACE):

Average Starting Salary by Major:
Accounting: $44,928
Chemical Engineering: $56,269
Management Information Systems (MIS): $45,391
Marketing: $37,191
Financial Services: $43,950
Educational Services: $30,291
Oil & Coal Products: $53,611
Aerospace: $54,410
Retail/Wholesale Trade: $34,932
Transportation Equipment Mfg.: $51,610

According to Marketwatch, “The bachelor's degrees most desired by prospective employers are, in order: mechanical engineering, electrical engineering, accounting, business administration/management, economics/finance, computer science, information sciences and systems, marketing, computer engineering, chemical engineering.”

Top Paying Jobs with 2 Year Degree

What about two-year degrees? The ones in the areas of technology, business and engineering are doing well. One third of the businesses in the NACE survey plan to hire students with associates degrees in technology. If you are a two-year graduate, your best industries are product engineering and design consulting, insurance, hotels, recreational fields and restaurants.

Physical Therapist Salary

Money.CNN.com reports that another field is going to be in high demand: physical therapy. This field generally requires additional training beyond college, and is attractive to people who don't want to sit behind a desk all day. PayScale salary data has physical therapists earning median salaries of $50,600/year to start, nationwide, and over $70,000/year with more than 10 years experience.

Other Educational Factors and Pay

Where you go to school can make a difference as well. According to Al Cotrone - Director of Career Development at the respected University of Michigan Business School - the median starting salaries for undergraduates from that school were $55,000 this year, a $3000 increase from $52,000 in 2005. Cotrone expects even higher salaries for 2007 grads.

I joked earlier about philosophy majors finding a tough market; what other professions are slowing down or remaining still? Marketwatch says that salaries for some liberal arts graduates have not seen big increases, particularly psychology, sociology, government and English.

No matter what field you pick, it wouldn’t hurt to be bilingual says John Challenger, CEO of Chicago-based outplacement firm Challenger, Gray & Christmas. He told Money.CNN.com, "Being multilingual will pay off in marketing, finance, banking, trade, social services, health care, and engineering - especially if at least one of the languages you learn is an Asian one."

As for my son and daughter, I am encouraging them to major in physics, and minor in something that requires a lot of writing. Physics is the liberal arts major for a technological age, but people who are great at math and science, but cannot communicate, end up living in their parents' basements :-)

How does your salary grade against new graduates? Find out with our PayScale salary survey.

Dr. Al Lee

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