Career and Earnings Lessons

Education & lifelong learner handled changes. What can you learn from one career?

1973 Lifeguard - $2.35 per hour. ($0.50 above minimum wage)

Back from 6 week cross country summer trip. Had lifesaving certificate and replaced friends off to college. Bought 10 speed out of $253 earnings.

1978 - Process Engineer - $7.79 per hour.

Graduated college working heat treat department in aerospace manufacturer.  Not use to so much money, lived on 1 of 2 paychecks saving the other. Started MBA classes next year.

1983 - Production & Quality Engineer - $11.54 per hour.

First company laid off half of employees. Got opportunity with nuclear manufacturer before got my lay off. 40 mile commute led to quitting grad classes. Bought first home for $65,000 with 5% down.

1988 - Manufacturing Engineer - $16.45 per hour.

Navy shut down nuclear company. Crossed picket line 2 years for firearm manufacturer in extended strike. Followed 2 short term jobs with small manufacturers. 6 months unemployment was best experience & motivation to develop more skills.

1993 - Manufacturing & Quality Engineer - $19.06 per hour.

Small hardware manufacturer in poor market conditions. Wore many hats, developing ideas into new products. Company employment shrank, but company grew market share from #3 to strong #2. However 2-3% raises not helpful. Had roommates and worked 2^ndjob to pay mortgage and car payment.

1998 - R&D Engineer - $32.88 per hour.

Joined large hardware manufacturer crossing country. 2^ndrelocation to west coast came with promotion. Sold 1^sthouse after 13 years for $72,000 (net loss $1,300). Bought 2^ndhouse for $190,000.

2003 - Commercial Appraiser - $20.00 per hour.

Self employed assisting partner and learning new industry. Difficult how much needs to be done to be successful as entrepreneur. Sold 2^nd house for $262,000 living off proceeds for 2 years. Year met my wife.

2008 - Contract Engineer / Marketing - $29.00 per hour.

Real estate market collapsed in 2006. Got back into engineering rationalizing overgrown product lines for Spa / Whirlpool Bath manufacturer. Wound up leading marketing project. Studied Solidworks computer design software.

2013 - Manufacturing Engineer / Project Management - $43.05 per hour.

Relocate to Pacific Northwest for development program at large aerospace manufacturer. So much need to be done. Keep moving projects and desks. Studied for PMI project management certification, but did not take $600 test while unemployed. Healthy raises & asked would I consider management, but management’s life is challenging. Bought 3^rdhome for $265,000.

2018 - Manufacturing Engineer / Project Management - $52.20 per hour.

Program went from development to sustaining. Out of 1,100 manufacturing engineers, 1 of 123 left on program. Worked 13 projects & had 24 desks in 8 years. Raises dropped to 2-3% as demand slowed. (Age is a factor.) However a new program in development and will be opportunities for promotions. Expect to work 10-15 years more.

Lessons:

1) Employment tomorrow is Not guaranteed. 

     (Unemployed 2.5 out of 40 years)

2) Save for your future and hard times. 

3) Times change. Moved between industries, 7 states and new technologies. 

4) Education never stops.

5) Growth comes from taking Responsibilities and Risks.

6) Persist for Success.

7) Account for Inflation. 3 median priced houses: $65,000 in 1983. $190,000 in 1998. $265,000 in 2010. (Houses are up 80% in 8 years here)

8) Cash flow determines how comfortable your life is.

These lessons work. Apply them to your career and industry.

Why Aren’t Raises Going Up?

Today’s job report was strong with 313,000 new hires. However January’s burst of wage inflation was a mirage, only 2.6% wage increases February. And that is before adjustments.

With 4.1% unemployment, why aren’t wages going up? The Fed Reserve keeps pointing to the Phillip’s Curve, which shows inflation should follow low unemployment. But it is not happening.

Alan Greenspan, Former Federal Reserve President is one of the critics of the Phillip’s curve. It predicts inflation, which does not appear. Paul Volker was another skeptic of the Phillip curve. The Federal Reserve’s issue may be they do not have a replacement model, and the appeal is low unemployment causing inflation is simple to understand.

Like most complex issues, there are several contributors to the problem. Believe the Federal Reserve is missing critical observations from their models:

The global economy and technology means companies can shop outside local neighborhoods and the United States for lower costs. My company is training engineers to outsource manufacturing planning to Russia and India. Unfortunately the planning quality has been poor to mediocre. Until recently high corporate taxes and low transportation costs have made moving manufacturing overseas desirable.

After 6 months of unemployment, you are no longer considered part of the work force. Many workers stayed in college, took social security, disability or retired early because of not being able to find work. These people are coming back adding to competition to find jobs.

There are 20 million people missing from the work force. Approximately the same number of people with drug convictions due to the War on Drugs. This hidden source of workers is beginning to rejoin the workforce.

The Federal Reserve has also contributed to lower inflation by keeping lending interest rates low. Companies have sure investments in low risk bonds with borrowed funds, rather than developing new businesses. Low inflation contributes to low wages.

Jonathan Tepper co-author of “End Game” and “Code Red”, wondered why a leading indicator for wages that had worked for decades stopped working since 2014. We are in a growing economy with a booming stock market. His article is on MauldinEconomics.com ‘Outside the Box’. His conclusions:

Companies are keeping more of the profits. They are rewarding investors with either dividends or stock buybacks.

Companies are able to keep more profits because of mergers and acquisitions have decreased competition. There are fewer companies with larger market share.

Many workers are living in non cities have limited choices which companies to work for. Combine that with weak Unions to negotiate higher wages.

US CEO wage gap inflation versus regular workers. UK CEO make 22 times average workers. US CEO make 276 times average workers. Less money to spend on worker salaries.

Do not see a burst of wage growth in the next 2 years for the reasons above. However the economy is strong, and wonder if the Federal Reserve has recognized they have finally created 2% inflation? Stronger inflation will increase wages until the next recession.

Stop Picking on Millennials

The stereotype of Millennials is narcissistic, all future CEOs, and saving the world in Yoga pants. This could not be more wrong. Work with talented, hard working, collaborative teammates from the shop floor to the office who want to build great airplanes.

Younger people want what we wanted at their age. A chance to meet people, develop skills and take responsibility. We boomers wanted to change the world in blue jeans and long hair. (At least it was long hair before going grey and falling out)

Millennials want opportunities, good pay, homes, safe neighborhoods and to raise their kids with a good education. Is that different than prior generations?

There are some differences in generations. Millennials saw their parents and family members lose jobs and homes during the Great Recession. They are more empathic, and faced a challenging economy starting out.

Gen X grew up with fears from 9/11, and lost opportunities in the Great Recession. Is it any wonder they value security? Gen X is squeezed between two large populations groups as they take over leadership.

Boomers grew up in a hyper competitive time. Felt bad graduating in the bottom third of my class, until it dawned on me was one of 220 engineering graduates from a freshman class of 662. Two out of three failed or dropped out. Can you imagine today’s helicopter parents hearing that? Starting salaries were tight like today’s economy, but we had severe inflation.

People are not their generations, though events, technologies and trends affected them. People are individuals with different goals, talents and loves. But we are all people.

Treat everyone with respect. You do not know their challenges.