Engineers in SA much richer than in UK/ US/Australia

Brain-drain: “the emigration of highly trained or qualified people from a particular country”.

Experts regularly warn of the impending doom that South Africa’s own brain drain will bring to the country’s economy in the near future, and with over 300 qualified engineers leaving South Africa every year, it seems that the pool of competent engineers, critical to the development of any country, might soon be completely exhausted.

But why are South African engineers emigrating, when the data clearly suggests that South Africa should be the one draining the engineering brains of other countries – sunny South Africa not only offers engineers more earning potential, in terms of purchasing power, than other English speaking countries (and by quite a large margin compared to countries like Australia and England) as well as higher chances of employment.

Data on the average salaries, after tax, within the major engineering fields – mechanical, electrical, chemical and civil – show that engineers in South Africa eventually earn much more than their counterparts in the traditional South African immigration Meccas: Australia (Auks), the United Kingdom (aUKs), and the United States of America (aUkS) – or AUKS countries.*

Although engineers in South Africa initially earn slightly less than those in the AUKS countries, after 5 to 10 years of experience, those in the fields of mechanical-, civil-, and electrical engineering start earning more than their counterparts in AUKS. Only chemical engineers in the US consistently earn more than South Africans – and then only  barely.

The pay differences between the countries become even more stark the more experience an engineer amasses. After more than 20 years of experience an average South African electrical engineer can expect to earn around R487 000 after tax while his peer in the UK will earn less than half of that – a measly R215 000*.

*For a full explanation of the process by which all the data used in this article was generated, consult the section at the end of this article.

Generally, the pay-scale trends indicate that SA and the US are the top two countries in terms of earning potential for engineers (SA beating the US marginally) with Australia a distant third and the UK by far the worst country for engineers to generate wealth.  These revelations might be surprising, at least to those who  believe that the land of opportunity and riches are anywhere but South Africa, but it shouldn’t be if you look at the relative unemployment rates for engineers in  the compared countries.

Equipped with a  basic understanding of the economic law of supply and demand it’s easy to see why SA and the USA have such high relative engineering salaries – their demand for engineers far outweigh their supply – as indicated by their respective unemployment rates of 3% (US) and less than 1% (RSA).  

The latter unemployment figure might seem  contradictory in a country that has one of the highest national unemployment rates in world at 25.5%, but what tends to be forgotten is that mostly it is the unskilled labour force that is unable to find work – the unemployment rate for university degrees is less than 5%, while  experts in job placement suggest that for engineers the unemployment rate could be as low as 0.4%.

Alternatively, the unemployment rate for Australian engineers is 5.5% (some saying as high as 12.2%) and for the UK it’s 8.6%, therefore also explaining why the earning potential for engineers in those countries are so low – employers aren’t interested in hiring any new engineers.

So if you are a South African engineer contemplating that most excruciating of decisions, leaving your beautiful land of birth – the country of Madiba and Mrs Balls; Muizenberg’s beaches and Mpumalanga’s mountains –  remember that in addition to the amazing year-round weather, the unbelievably friendly people and the gorgeous scenic beauty, there is also the potential for a quality of life that is incomparable to most other English-speaking countries. And even though crime is still a major issue, remember that the world is changing and nowadays you are 30% more likely to be murdered in Paris than Cape Town if your are middle class.

But then again, that’s South Africa for you – interesting, contradictory and a little bit funny at times.

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Engineers in South Africa earn more and are more employable than counterparts in UK/US/Australia
Engineers in South Africa earn more and are more employable than counterparts in UK/US/Australia

Generating Data on Comparative Salaries

For an in-depth look at all  the data used, in spreadsheet format, click here

Average Salaries per country/engineering field/experience level

The data for the average salaries of engineers from SA, UK, US and Australia in the fields of mechanical, chemical, electrical and civil was found on Payscale.com, a website that aggregates the employment information of thousands of users, including engineers, across different levels of experience ranging from those new to the industry to the veterans with more than 20 years experience.

Salaries after tax

The average salaries from each country, for each field, and within four ranges of experience (0-5 year, 5-10 years, 10-20 years and >20) were then each run through the online tax calculators of each respective country (with the most basic settings) to get salaries per year after tax.

Applying Purchasing Power Parity (PPP)

The amounts generated by the above processes only served to illustrate the nominal value of earnings in each country’s local currency, but to be able to compare all the values they need to be translated into a single currency. Rather than using the current nominal exchange rate, the theory of Purchasing Power Parity – an economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency’s purchasing power – was applied to find a ‘real exchange rate’ (for instance R5 can get you the equivalent of $1 of the same goods, which suggests a much lower exchange  rate than the current R15/$1 rate) between the respective countries and all the  foreign values were subsequently converted to rands.

 

One thought on “Engineers in SA much richer than in UK/ US/Australia

  1. Why do you ignore NI in the UK, and security costs? Although I don’t disagree that engineers are better off financially in SA, saving for retirement and paying for armed response are real costs. As is medical – one can always chance NH there.

    I know several people in IT who moved to England. It wasn’t for the money, they earned more here. But the feeling of security there is unbelievable – in SA there is constant fear. I have been violently attacked in SA, in Europe I felt safe even walking around the right areas in cities in the small hours.

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