Thursday, June 15, 2017

Comparisons between US and UK pay

An interesting observation from a longtime friend of the blog (and Chemistry World features editor) Neil Withers about this Tuesday's postings:
I note that a US postdoc earns upper end UK lecturer salary cc @Chemjobber
The direct comparison (at the time) was £37,276 for the postdoc and £33,943–38,183 for the lecturer.

Another editor on Twitter noted:
Healthcare needs to be considered when comparing US/UK salaries. Even with that factored in, military scientists are much better paid here 
...and another UKian chimed in:
the UK pension is a pretty good deal though - employer contributes 18 % of your salary... I don't know what US situation is. 
I've never quite looked at what median chemist salaries are like in the US versus the UK; I figure that comparisons (just like this conversation) get tangled into a snarl of confounding factors.

The median RSC member who responded to their 2015 biennial survey receives £48,800 in total income (£44,000 in salary, £4800 in bonus.) That works out to $62,205.36; by comparison, the median ACS member made $97,000 (2015 ChemCensus) I'm going to guess that we are comparing zucchinis and aubergines here (especially with likely demographic and survey instrument differences).

Readers, do I have this right? Do chemists in the UK make less money? What are the confounding factors we haven't considered here? 

17 comments:

  1. Yes, we do make less money. Postdocs earn about £30-£35k, entry-level PhD in industry will get something similar (+bonus) and progress to ~£40k within a few years. But the pension deal is not too bad, as you quoted. And state-funded healthcare (NHS) is indeed free. Some companies would also buy you a private healthcare insurance. Moreover, job security seems to be much better than in US. Costs of living are probably quite similar (but housing prices vary a lot depending on exact location).

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    1. "state-funded healthcare (NHS) is indeed free"

      Well, no, its not. NHS is paid for by your taxes.....(though on a per capita basis still less than US).

      Impossible to measure, but it would be interesting to see if chemists in the UK are happier than in the US. Overall (http://www.cnbc.com/2017/03/20/norway-ranked-worlds-happiest-country-as-the-us-gets-sadder.html) it seems Brits are less happy than americans.

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    2. Brits may be less happy due to their compulsion to paint red doors black.

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  2. "employer contributes 18 % of your salary"

    Holy moly.

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    1. Wait, what's a pension?

      --younger US scientist, with tongue only halfway in cheek

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  3. Chemists do make less money here, even taking into regards other factors. I earn about the same in industry in the UK as I did as a postdoc in the US (though this is somewhat due to Brexit devaluing sterling against the dollar).

    Confounding factors are the pension, state funded healthcare, 25 days holiday in addition to national holidays (33-35 days total) and the reduced working hours. Although these aren't necessarily financial, they do make for a much better work life balance.





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    1. 33-35 Vacation (holiday) days. Holy mother of pearl, I only got 15 (7 vacation, +8 national holidays) for the first two years of my job. At year three, you are allowed to purchase an additional week of vacation, lol.

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  4. It seems very difficult to compare the net total compensation between the two, considering the difference in federal/local taxes, 18% pension contribution vs. (social security + IRA + any employer match), gov't health insurance vs. (individual + employer paid insurance premiums + medicare tax), etc. I always assumed US salaries appeared artificially high and UK salaries appeared artificially low when compared to the sum of everything we received in return, but maybe not.

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    1. I would second this. US scientist salaries are indeed high on a dollar basis (not just compared to the UK) but there are so many other factors at play that it's hard to compare. Work hours / "availability" expectations / vacation is a huge one.

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    2. Picking nits to aid understanding - is the "IRA" portion of "IRA + any employer match" actual compensation? They are funds that the employee contributes (pretax), but not "compensation" Employer match is part of total compensation, and generally tops out at about 3% for mortals (I.E. 50% of employee match, up to 3% limit).

      18% (holy moly indeed!) still doesn't make up the difference between $62k and $97k. Nothing stops the employee from saving 18% themselves,though (of which something like up to 13% can be pretax).

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    3. Sorry, I was unclear. I was just trying to bucket "retirement funds" and their relative sources, not count all as compensation. The employer match would count as compensation, much like the 18% paid by the company in the UK. The IRA + social security are costs that come out of your paycheck in the US that do not in the UK.

      That is to say, if you wanted to save at the same 18% rate from all sources in the US, you'd be paying (6% SS + 9% IRA contribution + 3% employer match). Essentially your pocket money is 15% smaller for the same 18% savings rate. I have no clue about actual $ amount you'd be receiving at the end, though.

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  5. I think you mean zucchinis and courgettes :-)

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  6. As a point of order, an IRA is not tied to an employer. The relevant account types are 401k in the private sector and 403b in the public one. Either of those are tax advantaged up to whatever the contribution limit is these days, employer matching varies quite a bit. In the US, at least, gone are the days of defined-benefit pension plans for most of us. An IRA is also tax advantaged, subject to contribution limits. I get the point about trying to lump all retirement into a bucket for comparison, but I'm too big a pedant to let it go.

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  7. Um...this is largely due to exchange rates I think. Ten years ago 1 GBP ~ 2 US dollar so then salaries would be roughly equivalent.

    At current exchange rates Australian chemists >> US chemists >> UK chemists. In real terms, I'm not sure there's so much difference as cost of living very different.

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  8. Hard to compare the two, especially since US chemist usually leave undergrad with ~25-30K of student loan debt.

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    1. The UK - and especially England will be catching up with that US debt situation real soon now.....

      https://en.wikipedia.org/wiki/Tuition_fees_in_the_United_Kingdom

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  9. Thanks for picking that up CJ! Pondering this a bit more, the Economist's Big Mac index of purchasing parity provides a more useful rate to use comparing salaries. That suggests a rate of £0.61 to $1, which gives more like £29k for the post-doc - and that compares a lot less favourably to the £30-35k quoted above for a UK post-doc, let alone the lecturer salary. It brings the median ACS salary to £59k, or the RSC median to $80k.

    The 18% pension contribution is ludicrously generous, but I can believe it for public sector/university. I'm happy to reveal that the RSC contributes up to 12% (depending on how much of your own money you put in), which is a *lot* more generous than the well-known commercial publisher beginning with N I used to work for.

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