Highest Paid Careers in America

In my post listing the highest paid jobs that don't require an advanced degree. I asked what the list would look like if graduate degrees were included. Well wouldn't you know it -- a couple days later and I found this list of the highest paid careers in America. Here’s the list of jobs as well as their average annual salaries (in countdown order):

15. Pharmacist: $112,160
14. Air traffic controller: $114,460
13. Sales manager: $116,860
12. Airline pilots, co-pilots and flight engineers: $118,070
11. Financial manager: $120,450
10. Industrial-organizational psychologist: $124,160
9. Computer and information systems manager: $125,660
8. Marketing manager: $126,190
7. Natural science manager: $128,230
6. Architectural and engineering managers: $129,350
5. Lawyer: $130,490
4. Petroleum engineer: $138,980
3. Chief executive officer: $176,550
2. Orthodontists and dentists: $161,750 - $204,670
1. Doctors and surgeons: $168,650-$234,950

Several thoughts here:

1. For the record, this list and the one I published previously are not only different because the first one only considered bachelor's degrees. They also differ in that the first list was based on lifetime earnings and this one is based on average annual salary.

2. See how much difference a graduate degree makes? (or at least the right graduate degree) Most of these require education above and beyond a bachelor's degree.

3. It's hard to tell how many from the first list made this group -- the titles are somewhat different and the order looks scrambled. Petroleum engineer, the highest on the other list, is clearly listed as #4 here. Others that may or may not be the same as the other list include marketing manager at #8 and financial manager at #11. The reason it's not clear is that the titles are a bit different and the orders are reversed on the two lists.

4. My job comes in at #8. :)

5. There must be some really lowly paid CEOs out there for the average salary to "only" be $177k. Just think of all the people making millions in that job. I would think they would bring the average waaaaaaay up.

6. I knew dentists were high, but wasn't aware they were that high up.

7. Interesting to see lawyers still so high on the list. I thought that the glut of them over the past decade or so may have hit average salaries hard. Apparently not.

Anyone else have thoughts on this list?

Comments

[Lance@MoneyLife&More]

Seems like what I would expect. These things are difficult to judge because who knows what data they used to compute whatever average they are using. Some of the titles are super generic as well but it is just a quick list. Lawyers have a huge range for sure so I bet their particular sample had a lot to do with their quoted number.

[Jim]

I think its also important to look at the distribution of wages. The median wage would be useful to know. For example, while there are certainly many very high paid airline pilots, entry level jobs are typically low paid making $20-30k range flying small commuter planes. Lawyers may average $130k but the median is around $108k and the bottom 10% make under $55k. By comparison the median for pharmacists is $113k and the bottom 10% make $84k.

You can get more details on the medians and percent distributions for occupations at the BLS :
http://www.bls.gov/oes/current/oes_nat.htm#00-0000

[Jim]

Lynne the numbers in the article are from the BLS.gov site. They do pretty big surveys and categorize the different occupations as well as possible. Its pretty reliable info.

[Jim]

Oops, for some reason I said Lynne and I meant to address that to Lance. (don't know why I was thinking 'Lynne'.)

[aa]

You should compare apple to apple. What are the lifetime earnings of these occupations? Don't forget most of these jobs/salaries don't start until people are in their 30s.

[Matt]

CEO's probably get compensation in the way of stock, options and other perks that are not in there BASE salary. A CEO may get $1.2 mil in compensation but 1 mil is stock options.

[Jim]

I would assume the CEO's are mostly small business CEOs. There are >250k CEO's in the country. I assume only the top few thousand CEO's make mult-million wages. Also the occupation group seems to include the heads of school districts, governments and non-profits as well.

[Noah]

Jim is exactly right about CEOs. At my former job the owner and CEO considered a good year one which brought him $125K. The company employed about 5-10 people.

[Preston Smithson]

My first thought was that sales manager could go either way. Come managers make bank because there is good money in sales if you can hack it. I guess that's a fair average though. I also think CEO's are the most overpaid people in the job market. It's more of a status than a position. Admittedly some CEO's earn there money and others just sit around doing nothing. Lame!

[Noah]

@Preston

CEOs are paid what the shareholders and board value him/her at. Either they are worth what they make, or if he's the owner, he makes what he wants. That is the benefit of owning your own company. However, if a company is doing poorly, usually the CEO is the first one on the chopping block.

[Cara]

The lawyer salary is misleading: lawyer salaries are bimodal, as shown by this graph.

http://taxprof.typepad.com/taxprof_blog/2012/07/henderson-.html

Also, the average number doesn't account for the huge unemployment rate of law school graduates, but that's a different topic.

[Jim]

Cara, I would bet that one big difference for entry level lawyer wages is based on whether you go into lower paid public/non-profit work, struggle initially trying to start your own practice or if you go into a salary job in private firm.
e.g. about 20% or so of lawyers are in government jobs which would be relatively lower pay for entry level positions.

[Mark]

It would be nice to see that next to their average debt burden when they start making that money (and their average age when they make that money). For instance, I will be #1, but I will start making that at 33 with a debt of ~$300,000

[Bruin]

So these are the selfish, evil earners who are steailng from the others? Are you putting out a hit list here for the occupiers? Just kidding, of course. Sorry, couldn't resist.

[Old Limey]

Tables like this are so vague and imprecise as to be pretty worthless in my opinion.

My 51 year old daughter's ex husband is a 60 year old attorney that specializes in evictions, performing hundreds every month. He now has 3 other young attorneys working for him as well as a small office staff and is pulling in over $4,000,000/year. Evictions are mostly pretty simple. The property owner faxes over the details, his staff prepare all of the legal documents and has his process server serve the papers. Occasionally if the person being evicted challenges it he has to have an attorney show up in court. He almost never loses a case, it's more of a "Rubber stamp" operation that doesn't take a lot of time. He employs "runners" that collect and shuttle documents back and forth to the courts and if the tenants don't move out voluntarily then the county sheriff staff evicts them.

My other daughter (age 53) used to be his office manager but quit years ago and now does all of his billing by computer from her home in Maui, using some software that I wrote for her. An indication of how lucrative this business is, this daughter has had a SEP-IRA, that I manage for her, ever since she started working for him in the mid 80's, she has never contributed a penny to her IRA but it is now worth $1.7 million.

These days he seems to spend most of his time either in Honolulu or Las Vegas while the Money Mill just keeps cranking out money. He also has never had a fancy office, he runs his business out of two adjoining apartments in a large apartment complex that he rented soon after he started his business. If he ever needs to meet with a client (which is seldom), they come to his home.

[BrianF]

@Preston

Wow! Really?

I am a small business CEO employing 150 people, with annual revenue of about $5,000,000. Our average annual payroll is $3,100,000. My house has a lien against it. I have personally guaranteed all of the business debt. My salary is $100K per year and I share the profits with four equal partners.

When you are willing to step in my shoes and risk your house, your life savings, and years of 70 hour weeks, I'll trade positions with you. Oh, and then, as one of the investors, I will demand 15-20% annual growth. What would be your plan for achieving that goal... especially with Obamacare threatening to shut down the business? What would you do to ensure your continued ability to meet annual payroll of $3.1 Million?

[Jim]

BrianF, Obamacare isn't going to shut down your business. THats a BS excuse. You're the CEO, if your business fails then who's fault is that?? Its not a trick question.

[Bad_Brad]

I've always wondered why doctor's salaries never get any scrutiny. Especially given the subtle and not-so-subtle efforts by the medical profession to protect itself from market forces.

[Bad_Brad]

Jim - the requirement to provide health insurance, to a firm with 150 employees, is actually pretty devastating. BrianF's annual profit is about $500k (based on his $100k plus four equal partners). He now has to provide health coverage to his 150 employees at a cost of ~$15k per employee (2011 average employer-based premium). The cost of that is $2.25 million. Unless he can pass along a pretty significant price increase to his customers, he's pretty much sunk.

[BrianF]

@Jim

If we paid the penalty instead of providing health insurance, we'd pay (150 less 30) X $2,000 per year, which is staked to inflation. 120 X $2K is $240,000 per year. Last year, our net profit was $500K, which is above average for our industry (as a percentage of revenue). That penalty won't single-handedly shut us down, but it certainly makes the continued risk of running a business far less attractive. Profit motive is real. Taking half my profits demotivates the entrepreneur.

To answer your question, we plan on surviving. We will survive because other providers in our industry will go out of business and we will absorb their clients. Unfortunately, the unintended consequence is fewer providers and fewer choices for the consumer.

[BrianF]

@Jim

My beef with Obamacare is that the policy makers don't understand basic business principles. Their thresholds for compliance are all measured by number of employees, as opposed to revenue, or a combination of measures. Most people think that 150 employees means $30 million in revenue, like many manufacturing companies. Service companies don't work that way.

A widget company can train and motivate a shift of 20 people to produce more widgets, thereby increasing profits. There are economies of scale. In a service business, I pay for one hour and I can then bill for that one hour. If I bill for more, I am committing fraud. There are limited economies of scale in a service business. My costs per dollar of revenue are fixed.

A $2K penalty for a full-time employee is $1 per hour. That dollar per hour drops my gross margin from 32% to 26%. A small provider can't absorb that cost. The only way to absorb that hit to margins is to raise costs (which reduces the number of customers willing to pay for services), cut pay (which reduces the number of providers willing to work), or get bigger and bigger to maximize profit to pay for the penalty. Small shops that are exempt from the penalty get shut down because they can't compete with the insurance offered by the big shops. It is simple math.

Another issue: tax credits. Tax credits don't really help pass-through entities such as S-Corps and LLCs. Of the thirty companies like mine in our metro area, twenty four are either an S-Corp or an LLC.

[Pauline]

The puzzle about lawyers' salaries is easy. Those bi-modal distribution charts address only entry level lawyer salaries, not average salaries. The number of entry levels receiving the six-figure starting salary is small, very small -- something like 10%. Anyway, the answer lies in the fact that if a lawyer in private practice isn't making good money being a lawyer, it's very tempting to quit and find something with a better lifestyle. The ideal exit strategy for many is going in-house (where counsel positions tend to remain well-paid), but experienced lawyers may indeed find a business-related position that no longer places them in the "lawyer" occupation group. Being at clients' beck and call is never fun in any industry, so, many lawyers leave the profession after less than a decade of practice. By comparison, it is true that accountants working in the Big 4 work long, client-driven hours for much less money than $130k, but they can always leave the Big 4 to make a comfortable salary with while remaining actual accountants.

I can think of a very, very good reason why doctor salaries may not be closely scrutinized despite the high barriers to entry -- and trust me, doctors' salaries receive plenty of scrutiny in this political climate: do you really want to attract someone with average test scores, average scientific ability (which is abysmal in the US considering our lack of education emphasis) and average grades taking care of your health and well-being, or do you want to attract people who are driven, who work hard, and who are good at understanding the science of medicine? Most people would agree with me that your health is your most important asset, right?

Most doctors believe that you should never be in medicine for the money (and after taking on the debt load plus four years of medical school and up to eight years of lower earnings, it doesn't really always seem like a great financial move). But that doesn't mean that you should ask smart people who work incredibly long hours taking care of you to live in penury, especially after considering the cost it takes to even attain the medical education. A rare slot in even a cheap public medical school (i.e. $15k a year) will easily set the average person back $125k, not considering the opportunity cost of missed earnings; the average TUITION alone is north of $60k a year for private medical schools. Considering their scientific smarts, they could have easily found a job in the STEM professions (as a petroleum engineer, maybe?) and made just as much -- or more -- money, without having to deal with the miseries of pursuing a doctor's career.

[texashaze]

The issue with health care is that it costs too much. The irony of Obamacare is that it does not address this to the core, it's intent is to expand healthcare which will therefore INCREASE costs. Let me repeat this, Obamacare will increase costs for healthcare (most notably those paying which is the middle class) not decrease them.

The first 10 years of cost modeling are front end loaded based on 5 years of pre-payment. This gives a false viability and sustainability on the costs as it was sold to the public. There have been several analysis of this by very credible, non-partisan organizations and journalists.

While the intent and thought of Obamacare may be noble, it will in fact have a huge negative impact on all of us financially as well as the US budget. You think we hear gloom and doom on SSI and Medicare going belly up, just wait...

[BrianF]

@Jim

To take the conversation back to the original thread. The point of my original post is that not all (if not most) CEOs are overpaid. Relative to the risk involved, I could argue that most small company CEOs are underpaid.

[Jim]

BrianF: " That penalty won't single-handedly shut us down,"

Yeah that there was mostly my point.

I can see that healthcare reform will increase your costs ~5% in 2 years and that will negatively impact your profit margin. That won't single handedly shut you down and frankly I think its just lame excuses when CEO's point to such regulation and complain that it is going to "run you out of business". Your business appears highly labor intensive and relatively low wages. Your industry cost structure must be tied to wages and any regulation that impacts wages. I'm sure the industry will adjust and pass along the costs.

I do agree with you that CEO's are not necessarily overpaid in general and I can see the opinion that small business CEO's may be underpaid relative to the work/responsibility. However you must see that you are still highly compensated even with youre mere $100k income (plus profit share).

[Jim]

texashaze : "it's intent is to expand healthcare which will therefore INCREASE costs. Let me repeat this, Obamacare will increase costs for healthcare (most notably those paying which is the middle class) not decrease them."

I don't understand your reasoning. Healthcare reform will require everyone to be insured. A lot of those people will be insured via their employers or buy their own policies. Those people will all have their own insurance which pays for their coverage. There are some subsidizes and expansion of medicaid to help the low income people.

The uninsured people already cost us all. Its not as if those emergency room visits by the uninsured and write offs by hospitals are all free. Those costs get rolled into the system and ultimately paid by all of us. Insuring everyone one way or another will save money at least indirectly.