Harvard Losing Out to South Dakota in Graduate Pay: Commodities – by Joe Richter (Bloomberg.com – September 18, 2012)

http://www.bloomberg.com/

Harvard University’s 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, South Dakota, in May are already getting offers, at a time when about one in 10 recent U.S. college graduates is out of work.

“It doesn’t seem to be too hard to get a job in mining,” said Jaymie Trask, a 22-year-old chemical-engineering major who was offered a post paying more than $60,000 a year at Freeport- McMoRan (FCX) Copper & Gold Inc. “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.There were fewer than 28,000 people employed in U.S. metals mining in 2004, from 58,000 in 1993, the National Mining Association estimates. By 2011, it had rebounded to 40,000.

Labor Shortage

As many as 78,000 additional U.S. workers will be needed by 2019 to replace retirees, the Society of Mining, Metallurgy & Exploration said in a report 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 U.S., 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, the marketing director at Hampshire, U.K.-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.”

Mining Engineering

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, Colorado. 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. workforce.

For the rest of this article, please go to the Bloomberg.com website: http://www.bloomberg.com/news/2012-09-17/harvard-losing-out-to-south-dakota-in-graduate-pay-commodities.html

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