Harvard grads lose out to SDSM&TThose scheduled to leave the campus in Rapid City in May are already getting offers, at a time when about one in 10 recent college graduates is out of work.
By: Joe Richter , Bloomberg News
Harvard graduates are earning less than those from the South Dakota School of Mines & Technology after a decade-long commodity bull market created shortages of workers as well as minerals.
Those leaving the college of 2,300 students this year got paid a median salary of $56,700, according to PayScale Inc., which tracks employee compensation data from surveys. At Harvard, where tuition fees are almost four times higher, they got $54,100.
Those scheduled to leave the campus in Rapid City in May are already getting offers, at a time when about one in 10 recent college graduates is out of work.
“It doesn’t seem to be too hard to get a job in mining,” said Jaymie Trask, 22, a chemical engineering major who was offered a post paying more than $60,000 a year at Freeport-McMoRan Copper & Gold. “If you work hard in school for four or five years, you’re pretty much set.”
A fourfold gain in commodities in the past decade reflects both surging demand and the industry’s failure to keep up. While new mineral deposits are getting harder to find, companies also are struggling to add enough skilled workers. That’s partly a legacy of U.S. colleges cutting back on mining programs.
Fewer than 28,000 people were employed in U.S. metals mining in 2004, down from 58,000 in 1993, the National Mining Association estimates. By 2011, it had rebounded to 40,000.
As many as 78,000 additional U.S. workers will be needed by 2019 to replace retirees, the Society of Mining, Metallurgy & Exploration reported in January. In Australia, the largest shipper of coal and iron ore, there will be a shortfall of 1,700 mine engineers, 3,000 geoscientists and 36,000 other workers in the five years ending in 2015, the report said.
Demand for mining-school graduates is exceptional in the United States, where the unemployment rate for 20-to-24-year-olds with bachelor’s degrees was 11.8 percent in July. The jobless rate across the economy held above 8 percent for a 43rd month in August, government data show.
Universities trimmed courses in earth sciences, mineral geology and mine engineering when the industry contracted in the 1980s and 1990s, said Diana Stewart, marketing director at Hampshire, Britain-based jobs4mining.com, a message board that links recruiters and prospective workers worldwide. Shortages in mine engineering and project management are acute, she said.
“There are simply not enough to go around, so companies are trying to tempt people to their own projects, which is driving tremendous salary inflation,” Stewart said.
“When investment finance is tight, skilled labor availability and labor costs are one of the factors that are having an impact on the viability of a project.”
Fourteen U.S. schools offer mining-engineering degrees, compared with 30 in 1982, according to Dave Kanagy, the executive director of the Society for Mining, Metallurgy & Exploration in Englewood, Colo. There were 178 mine engineering graduates in 2011, from 700 in 1982, he said. The average age in the mining industry is 47.3, compared with 40.7 across the combined U.S. work force.
The South Dakota School of Mines & Technology, which charged out-of-state tuition of $10,530 last year, graduated 259 students with bachelor of science degrees in 2012. Seventeen of those were in mining engineering.
Harvard, in Cambridge, Mass., has more than 27,000 students who each paid about $40,000 in tuition last year.
The number of engineering graduates who go into mining is “virtually zero, if not zero,” said Michael Rutter, the communications director for Harvard’s School of Engineering and Applied Sciences. They tend to go to industries including finance, biomedical engineering, software and government, he said.
The median salary for all Harvard graduates at mid-career was $116,000 last year, compared with $96,300 at South Dakota School of Mines, according to PayScale’s survey. Princeton’s mid-career salary was highest, at $130,000, followed by California Institute of Technology at $123,000, according to Seattle-based PayScale. The company says the data is based on surveys of more than 35 million users.
The South Dakota college, founded in 1885, is a partner in the development of the Sanford Underground Laboratory, which will carry out experiments as deep as 4,850 feet (1,478 meters) down in an abandoned gold mine. Its campus includes the Museum of Geology, which houses a century-old collection of minerals, many of them taken from now-defunct mines. Its football team, the Hardrockers, has had one winning season since 1985.
The labor squeeze is boosting the cost of new projects and may contribute to delays limiting production growth, especially in copper, said Frank Holmes, the chief executive officer of San Antonio-based U.S. Global Investors, which oversees $1.72 billion of assets. Morgan Stanley is forecasting a fourth consecutive year of global copper supply shortages in 2013.
The McLaury Building is shown on the campus of the South Dakota School of Mines and Technology.