do doctors (MDs) make a lot more money than engineers in the US? If yes, why?
The flip answer: Because they're paid more.
Less flip, society values people who save lives/keep us healthy more than it values people who make design computers, automobiles better, design bridges, launch rockets, etc.
Also, doctors invest a LOT more of their lives in their profession, on average. They do a lot of intensive schooling, intern and burn themselves (and their families) out, and establish residencies that require them to put in evenings and weekends in order to maintain preferred status with a hospital in their region. There is quite a bit of commitment there. I have friends who are doctors, including eye-surgeons who essentially have to be available on-call for emergencies. If the hospital calls and says "we've got a couple of car-crash victims that might have experienced retinal detachments", they don't have the luxury of saying "call somebody else".
I'm sure there are quite a few engineers in the private sector who make a lot of money. Some of them can become millionaires.
Keep in mind that the medical profession is heavily subsidized by the federal government. Something like 17% of the U.S. GDP goes into health care.
Engineering is MUCH more fun though.
Also, many of the higher paid engineers move into management and are no longer called engineers. That's why salary averages can be deceiving. Moving to management is certainly not required of engineers though.
Is it common that engineers are part of a company's board of directors or in management positions in the states? In Germany it is, mostly in engineering companies though.
Technical companies do often have engineers in positions in management or on the board of directors in the United States. Corporations in other businesses do not have many engineers, so you expect fewer in leadership positions.
I work in the medical device industry, so I work with leading physicians. Physicians in the US often make much more than their counterparts in Europe or Asia. Those counterparts still make more than I do. If you can be that guy, you should be. However, the level of commitment and skill required is more than most people can handle. If you knew what these physicians did, you would not complain. However, I do something they cannot do, so they depend on me to make the devices that make their job easier. If you look at average engineers versus average physicians, they still make more money, but the dollars per hour and the career salary per lifetime student loans may not be so favorable. Look to your skills and your personality before you make your choice.
Starting salaries for doctors who are general practitioners may seem like a lot, especially in certain parts of the US, but there are some factors that automatically reduce these salaries. First off, most doctors don’t get educated on scholarships alone, and many will need to pay a significant amount of money off in student loans. According to the New England Journal of Medicine, average cost of medical school plus living expenses is approximately $225,000 USD if you attend a private school and $140,000 USD if you attend a public one. While some expenses may be met through grants and scholarships, many people leave medical school owing in excess of $100,000 USD, and this amount can increase if additional years of residency or training are required.
I always thought that med schools are expensive b/c they know the earning potential of doctors. Call me a cynic, but I think they get paid so much b/c people will pay the doctor's price to save their life, and b/c of the constant threat of being sued-- something that is relatively easy in the US. I don't think the public perception of engineers (I know, who have saved more lives in total than doctors have) is quite the same.
Don't forget that doctors in the U.S. also have high expenses, e.g. for malpractice insurance. That's one reason why new M.D.'s gravitate towards high-paying specialties instead of general family practice, to the point where many parts of the U.S. have a shortage of general practicioners who handle basic medical care and screening and preventive medicine.
I'm pretty sure that the high cost of medical education isn't a function of expected future earnings. I'm told that it actually costs medical schools money to educate doctors, even after they receive the income from tuition. This is in contrast to law schools, which turn a profit from keeping their schools open.
As for your other assessments, yeah, you're probably right. And let's face it, we can all agree that saving lives is more important than building technology.
Don't forget who designs the medical equipment (hint: researchers and engineers). We also need a productive economy to pay for the medical industry, and that takes all sorts of people.
Only a few specialties (namely, surgeons and ob-gyn's) have high malpractice insurance costs. For most, the cost of malpractice insurance is something like $5,000/year.
The correct answer to the original question: because there's an artificial shortage of doctors in this country.
Really? So where does that money come from? They just happen to charge the students less than what it costs to educate them?
It probaly comes from the same place the monies needed to give students am undergraduate degree: Alumni donations, corporate donations, government subsidies. (Typical undergrad tuition, whether private or public, rarely cover the costs.)
Present situation doctors earn more than the engineers because just think practical does disease has the recessions or does medicine have recession so doctors have the flow of patients always no matter the economy.
Problem is when it comes to saving lives or curing themselves, people don't want to compromise...they want the best they can afford; as a result you get lots of money in the medical field.
You know, it's quite possible that med schools don't have much of a profit margin. That's because they need real doctors to teach. Med school professors easily make 2-3 times as much as equally qualified and experienced physics/engineering professors. They need to be paid that much because, otherwise, it would be more profitable for them to leave academia.
So we're back to the original question, why is it that doctors are paid better than engineers? Cost of education is a consequence, not a cause. Despite exorbitant costs, people pile into med schools at such a rate that most of those schools have acceptance rates in single percentages (at most one in ten applicants is offered admission in most schools). It's harder to get into the med school at the University of South Alabama than it is to get into MIT. Clearly, there's a bottleneck somewhere that keeps the number of med students low, and, consequently, their potential salaries high.
Imagine if there were a federal regulation that required you to have a government-issued permit in order to write code. Further, imagine that the government issued 10,000 of those every year to graduates of a small number of elite colleges and eligible immigrants. Finally, imagine that it isn't possible to outsource, and every line of code that has to be written, must be written by a licensed U.S. resident. How much would such licensed programmers make? A lot more than today, you can be sure of that.
What's the nature of that bottleneck with regard to doctors? It's called "residency". In most states, all doctors have to work at least one year as hospital residents before they are permitted to practice medicine on their own. The number of available residency positions has been virtually flat, at around 24,000, for the last couple of decades. Medical schools are interested in making sure that all their graduates are employed, therefore they keep the number of students low enough for all of them to find residency spots upon graduation.
Just to give you an idea of the differences between an engineers training and a medical doctors.
4 years of Undergrad (many stop here)
1 year for masters (Most stop here)
So 5 years after high school you begin earning your salary of 50 thousand, and start working your way up.
Medical doctor -
4 years of Undergrad
4 years of Medical school.
3 to 7 years of Residency making 42 thousand a year.
So an MD doesnt start earning money until 11 to 15 years after high school.
So on average an engineer has a 6 year head start. Not to mention debt load. Most people I know personally will have at least 300 thousand in students loans from medical school, that has accumulated around 75 thousand in interest during residency. So MD's start 6 to 10 years later with an extra 375 thousand in debt.
So just in order to attract anyone to the field, salaries have to be high. I definitely think part of it is the importance of saving lives, but a big part is just numbers.
I think it was alluded to earlier in the thread, but I'll just highlight that it's more likely for an engineer to be able to make a lot of money at a startup company, compared to an MD. There are certainly medical startups, so MDs can make money at them also. But there are many more startups that are staffed by engineers.
Of course, the engineers that end up at startups are the cream of the crop, highly trained and motivated, and so on. But it's still a good and reasonable goal, IMO, for engineers to strive to make it to the level where they are attractive to a startup company, or able to start their own company themselves.
Virtually no one (except maybe neurosurgeons) spends 7 years in residency. Most doctors are done in 3 years.
The average debt of a graduating medical student before residency is around 150k. On top of that, 30-40k in interest will accrue during residency.
It's not like medical schools are struggling to attract prospective students. Quite the contrary. There's cutthroat competition to get in. UCLA School of Medicine has the acceptance rate of 4.5%. Stanford is at 2.5%. U of Chicago, 2.9%.
I'll take a steady $300,000/year job over the chance of winning a startup lottery any day of the week.
You have to be lucky just to be in a startup that succeeds (because most of them flop). You have to be in from the beginning, otherwise you get very little equity. And even if you win, you have to pay taxes through the nose (in California, 26% AMT + 9.3% state tax).
Some concrete numbers.
In 2004-07, there was an average of 160 IPO's per year in the United States. There were almost no IPOs in 2001-03, and again since 2008. Let's assume that, for every IPO, there was one acquisition of a private startup. I'm going to guess that each IPO created an average of ten engineer-millionaires and ten management-type-millionaires.
That's 12 thousand engineers turned millionaires in ten years, across all engineering specialties (software, hardware, telecom, ...)
BLS says that there are 857,000 computer software engineers and 291,000 electrical/electronics engineers in the country.
It's not luck. Good research numbers, though. And I agree 100% about the tax fairy.
I think it is humerous that you chose to refute on such minor points are are wrong to boot!
Most doctors are done in 3 years? The only specialty that is 3 years is Internal Medicine, of which many graduates go on to fellowship for 1 to 3 years.
Family medicine, Dermatology, Ob/Gyn, etc. are 4 years.
Radiology, General Surgery, ENT, Urology, etc. etc. are 5 years.
Suffice it to say that most people spend 4 or more years as PGY's...
You are right that the quoted average is 150k, but naive in accepting it. It includes students whose parents paid for their school. As in, when you take the average of a set of debt values and with a bunch of zeros in the mix, what will that do to the average? Oh also, that number doesn't include any debt accrued from undergraduate or from other graduate degrees. So if you'd like to naively accept that value, cool, but nobody should. Look up the cost of attendance each year at ANY private medical school in the country. You'll likely see tuition around 40 thousand, with cost of living between 12 and 20. So on the low end, you are talking about 200 thousand from just medical school. (Plus the 50 from undergrad...)
And you are right about acceptance rates, thus my saying that medical school is extremely competitive to get in to. Also a faulty use of statistics though. Did you happen to look up the overall statistics for medical school admissions? Around 50% of those who apply get accepted. You know all those people who aren't in the 2.5% that are accepted to Stanford? Well they get in at one of the other medical schools in the country. So don't throw around an individual medical schools acceptance data in order to give the impression that people are swarming in droves to attend medical school. The best schools in ANY field are competitive.
The point of my original post was not to put down engineers. My brother and my dad are both engineers. However, there is no arguing that in order to make up for both initial investment and time lost, physician salaries have to be higher in order to continue to attract the caliber of doctor that you want taking care of your grandmother.
Separate names with a comma.