Saturday, September 22, 2012

Bloomberg: South Dakota Mining College Grads Can Expect to Earn More than Harvard Grads

The massive Freeport McMoran open pit copper mine at Morenci, AZ. A run on commodities in recent years has created shortages of qualified workers and higher wages for those entering the mining industry. Kresge86 photo
After a nearly decade long bull market for commodities, mining companies throughout the United States have found themselves short of qualified personnel while attempting to keep up with market demand. This has translated to recent graduates from smaller mining colleges earning more than their Ivy-League counterparts right out of school.

A study tracking employee compensation data determined that recent graduates of the 2300 student South Dakota School of Mines and Technology made an annual salary of nearly $57,000.
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.

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.
The total number of schools in the United States that offered mining degrees in 1982 was thirty- today that number is down to fourteen. Tuition for South Dakota School of Mines and Technology runs between $8400 and $13,000. By contrast, with a student body of nearly 27,000 tuition for Harvard averages in the neighborhood of $40,000.

This week also marks the one year of the anniversary of the Occupy Wall Street movement. One of several reasons cited for the protests was the rising costs of college tuition. In fact, Harvard professor, Massachusetts Democrat senate candidate and faux Native American Elizabeth Warren claimed to have been the intellectual brainchild behind the Occupy movement in an interview last year, but has had little if anything to say about the movement since then.

Yet, it somehow turns out the nation needs more mining engineers than it does unemployable Ivy-league Philosophy or Gay, Lesbian and Transsexual Studies Degree holders camped out in parks wondering why tuition for their diplomas are so high.

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