2002 TAPPI Salary Survey.

Interesting regional changes--as well as an accelerated growth rate for median income--are the standout findings from the latest TAPPI Salary Survey. Also, while the "corporate officer" job category registered the highest median income, it is one of only two categories that actually registered a decline from 2001 levels (the other is production manager/mill superintendent.)

The just-released 2002 Salary Survey continues the series of reports outlining salary trends of U.S. TAPPI members. The survey details salary statistics by geographic region, industry sector, job function, gender, education level and age, comparing statistics for 2002 against those for previous years. All figures are reported in U.S. dollars.

Median salaries within the pulp, paper, and allied industries registered a significant increase--up 5.3% from 2001 salaries. Figure 1 shows the income distribution for 1997-2002, for both mean income and median income (see the box for a quick brush-up on statistical terms.) At $95,850, the median income reported for 2002 showed a $4,850 gain over 2001's median income of $91,000. This 5.3% increase marks an improvement over the comparatively modest growth of 4.6% shown between 2000 and 2001. The year 2000's jump of 5.7% over 1999 salary rates represented the largest gain in the past decade, slightly more than the 5.5% increase shown between 1998 and 1999.

Overall, salaries increased for 75.4% of respondents and decreased for only 3.8%. Compared to last year's results, more respondents had static salaries--20.8% report no change in salary for 2002, compared to 15.8% unchanged during 2001. Performance or merit increases accounted for 48.1% of the respondents' changes in income for 2002. Another 17.8% attributed their salary changes to cost of living increases.

Reported median incomes vary by geographic region, as shown in Figure 2. The most dramatic change is evident in the Northwest region. The only region to report a decline on the 2001 study, the Northwest came back strong on the 2002 study with the largest reported increase in median income--up to $99,500 for 2002, an increase of $11,800, or 13.4%. The Southwest and Mid-Atlantic regions also showed impressive gains in median income; each reported gains of $11,000 per year over 2001 reported incomes, to garner the second and third spots, respectively. The 2001 survey's income leader, the Southeast, showed one of the most modest gains of any region.

TITLE AND SECTOR CATEGORIES

When examined by industry sector, the 2002 survey shows some surprising changes from the previous year. Respondents in the corrugated sector reported the highest median income for 2002--$115,000, which is $9250 over the overall median income shown in Fig. 1. The 2001 survey's leading sector, process control, has dropped into ninth place for 2002, reporting a median income of $93,000 (down from 2001's reported $105,000.)

Other big changes were evident in the process/product quality sector at $112,500, which ranked second in 2002 but eighth on the 2001 survey, and in environmental, 2002's third-ranking sector at $105,000, which came in at number 11 on the 2001 survey. These changes were reported in spite of the fact that the breakdown of total respondents by industry sector was almost identical for the 2002 and 2001 surveys.

The study also examined salary relative to job function (see Fig. 3). Although it is no surprise that corporate officer was the job title reporting the highest annual median income, for the second year in a row it reported a decrease from the previous year's level.

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The 2000 Survey reported corporate officer median income of $200,000, up more than 25% from 1999's results, the 2001 survey reported a 4% drop from 2000 levels. At $191,000, 2002 median income for the category was only $1000 less than 2001's figure, barely over half a percentage point. Production manager/mill superintendent was the only other category showing a decline in reported 2002 median income. The administration category clearly shows the highest gain, at $133,000, median income rose almost 32% over 2001 reported levels.

EXPERIENCE PAYS

Respondents with 21 or more years of industry experience led in median income at $108,000, compared to $61,600 reported for those with 1-5 years of industry experience. Those new to the industry (reporting less than one year experience) actually reported a higher median income--$90,000--than those with 1-5 years of experience. Median income also increases steadily as management experience increases. Respondents with 21 years or more of management experience reported median income of $120,000; those with only 1-5 years of management experience, only $86,950. Seventeen percent of the respondents reported that had they less than one year management experience or no management experience.

The gap in median income for men and women increased from 2001 to 2002 (from $22,200 to $27,000). Male respondents reported a 2002 median income of $98,500, while female respondents tallied in at $71,500. These differences result, at least in part, because men have greater levels of experience in the pulp, paper, and related industries. When adjusted for experience level, the average difference is smaller.

INFLATION EQUATION

Adjusting median income for inflation offers another perspective (Figure 4). Income adjusted for inflation is based on annual change in the consumer price index (CPI) from the U.S. Bureau of Labor Statistics, with 1994 as the base year. This means that the 1996 median income of $72,506, adjusted for inflation, was $68,486 (in 1994 dollars.) Years 1996-2002 are also reported in 1994 dollars.

Comparing 2002 inflation-adjusted median income ($78,960) with 1994 median income shows an increase of 19.3% in real income during this eight-year period. While this figure may seem disappointing when compared to the 35% reported gains in non-adjusted median income during the same period (from 1994's $70,100 to 2002's $95,800) it offers a more realistic perspective on salaries in the pulp and paper, and related industries. Industry workers definitely have more in their wallets--but it's not going as much further as they may expect.

SAMPLE: A randomly selected sample of U.S. TAPPI members received a copy of the survey in early 2003. Respondents were those who completed the survey and returned it by the stated deadline.

MEDIAN refers to the value where 50% of the responses are higher and 50% are lower.

MEAN refers to the value determined by adding all responses and dividing the result by the number of responses. This is commonly referred to as the "average," a term is usually avoided in statistics as being too non-specific.

IN THIS ARTICLE, YOU WILL LEARN:

* The rate at which median income has risen over the past several years.

* Which U.S. regions have the highest and lowest median incomes.

* How industry experience, gender, and job category affect income.

ADDITIONAL RESOURCES:

* The complete 2002 Salary Survey is available free to TAPPI members and for US$ 15.00 for non-members. To download the document, go to www.tappi.org and type in "2002 Salary Survey" in the search box at the upper right.

* To find TAPPI salary surveys from previous years, type in "Salary Survey" in the search box.