How Much Do Biotech Workers Really Earn? Maybe Not as Much as Politicians Say

10/2/09Follow @xconomy

The biotech industry enjoys a lot of political clout in Washington D.C. and state capitals largely because it attracts highly educated people into high-paying jobs. But I spotted an intriguing bit of data this week that suggests biotech workers aren’t really taking home nearly as much money as some of the industry’s lobbyists and political allies would like people to believe.

The median salary for biotech jobs in the Pacific Northwest was $60,520 in 2008, according to data collected by Phil Ness, the owner of Seattle-based Info.Resource, a company that operates websites for biotech associations in all 50 states. That’s nowhere near the $81,499 average annual salary figure for Washington state biotech workers that was touted earlier this spring by a group sponsored by the Pharmaceutical Research and Manufacturers of America (PhRMA).

The higher of the two wage figures, as you might expect, gets a lot more publicity from industry advocates, although Gov. Chris Gregoire has recently started backing off on her public statements about biotechnology as a regional catalyst for high-wage jobs. Even so, her Web site still states, “This industry will offer many Washingtonians family-wage jobs while finding cures for some of the world’s most dreaded diseases.”

The savvy reader will notice immediately that I’m comparing two different surveys with different methodologies, which is an apples-and-oranges comparison. Fair point. But it’s still worth hearing about the Ness study, especially since the higher salary figure tends to get so much more mainstream press attention.

Ness used a simple model to arrive at his median salary figure of about $60,000. His websites provide links to open job listings in Washington, Oregon, Idaho, Montana, and the Canadian provinces of British Columbia and Alberta. He asked the employers in those places to voluntarily provide him an actual salary range of the open job, as long as he kept the employer’s name blinded in the analysis. Only a small percentage—less than 10 percent—agreed to provide the range, but when they did, Ness settled on the midpoint within the range that was provided, and pooled together data from 360 actual job openings. Although his survey cast a wide net across states and provinces, about 90 percent of the openings were in Washington state, Ness says.

He also found some interesting disparities in terms of what skills are in demand, and which ones aren’t. Essentially, people with more commercial skills, like quality assurance for manufacturing, can make significantly more than entry-level scientists with pricey graduate school educations. Here are some average salaries Ness found for common biotech jobs:

—Clinical research associate—$69,278

—Quality assurance—$68,720

—Quality control—$51,292

—Research associate—47,500

This analysis by Ness leaves out what people who are currently holding down jobs are making, and doesn’t include the really big fish like C-level executives who get paid well into the six-figures—the sort of outlier data points that can inflate an average. That’s why Ness used a median, in which half of the salaries were higher and half were lower, because that sort of analysis is less prone to being skewed.

Ness, a bit of a biotech history buff who likes to track the genealogy of the local biotech cluster, told me he didn’t really see any big surprises in the data this year. He’s been using this survey method since 2004, and he was just starting to look for long-term trends when we spoke earlier this week. But at first glance, he isn’t seeing much higher wages now than he did five years ago.

One thing that did jump out at Ness is an increasing number of jobs for things like quality assurance and quality control—the kind of people that biotech companies don’t need in their earliest days, but that are needed as a company matures and gets closer to the marketplace with a new drug. That trend is consistent with the job openings I saw last night on the website of Seattle-based Dendreon (NASDAQ: DNDN), which has 22 of its 82 current job openings for people with quality control and quality assurance in their title.

That’s not the glamorous sort of stuff of Eureka moments and snazzy industry recruiting videos, but they are vitally important to the success of companies and shouldn’t be overlooked, Ness says. “Community colleges find it especially interesting,” he says.

You can check out some of Ness’s data, which he’s posted here.

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  • scientist

    “Pricey graduate school educations”

    Grad school for most science students is free, actually you get a stipend, and tuition waived in most cases.

  • http://www.textdoctor.com Elizabeth Frick

    What a superb example of clear, understandable technical writing about statistical data. I’m studying statistics in preparation for taking an editing exam, and I completely understood all of your text, especially the statistical part. However, if I weren’t studying statistics right now, I still could have understood what you wrote. Great job!

  • David Lukas

    I understand this is kind of just a “hobby” study, not a bona fide academic survey, but there are a lot of problems with the methodology. Yes, median is “less prone” to skew from outliers than average. But outliers are important to the results! The Pareto principle applies here too–those big numbers at the far right of the distribution are still real dollars that go into the economy, so to me, the average is much more meaningful than the median.

    The sample is also not random. In a down economy, companies are less likely to be investing in high-salary senior people, which would explain why the job postings are for lower-salary positions. Furthermore, who knows what kind of selection bias is introduced by only looking at numbers from the 10% of respondents who agree to answer your questions (i.e., the more senior the open position, the more valuable the time of the hiring manager, and thus the less willing they are to participate in the survey… etc.).

    Ultimately the $81k figure is much more plausible to me.