The recent discussion on the differences between a M.S. and Ph.D. positions has set me to thinking about the differences between the degrees, skill sets and overall employability. But first, let's look at the salary numbers.
Assume that we have 4 individuals. They're all in the same group in graduate school, they're all the same age, gender, whatever. At year 0, they decide to take 4 different paths, as shown below:
Person A: takes M.S. immediately, goes to work for 60k, gets 1% raise a year
Person B: takes M.S. immediately, goes to work for 70k, gets 1% raise a year
Person C: stays in grad school, takes Ph.D. in 2 years, goes to work for 80k, gets 1% raise a year
Person D: stays in grad school, takes Ph.D. in 2 years, does 2 year postdoc, goes to work for 90k, gets 1% raise a year
At year 20, how will their earnings differ?
Person A, M.S. (year 20 total earnings): $1,321,140.24
Person B, M.S. (year 20 total earnings): $1,541,330.28
Person C, Ph.D. (year 20 total earnings): $1,569,179.81
Person D, Ph.D. + postdoc (year 20 total earnings): $1,553,207.80
My spreadsheet is here, for those of you who are interested.
Caveats: There weren't any promotions in these cases, so there weren't any considerations of pay grades and the like. The salaries are a bit made up (I doubt there are postdocs hired into industry at salaries 10k above their non-postdoc colleagues.) Also, there are layoffs to be considered (how do you calculate that?)
Conclusions? Hard to say, but in this idealized scenario, assuming all other things equal, Ph.D. chemists make up the 2 year difference in salary between their already-working M.S. brethren/sistren in the first ten years of their working life, if not sooner.
Is the salary difference really that great? It depends, of course, on the magnitude of the difference. In that first 20 years, the lifetime difference in total salary between Person B, (70k annual salary) and Person C (80k) is less than $30,000. (Note: of course, it's not completely fair to compare someone who's been in the workforce for 18 years as opposed to 20.)
Also, it's clear that postdocs aren't a great financial decision, in the short term. But that's not why people take postdoctoral appointments. Long term, obviously, if a postdoc gives you more training, better contacts and more job opportunities, then they're worth it.