Decline in real veterinary incomes continues despite strong job market

Studies show an economically complex profession
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Real mean income, that is, income adjusted for inflation, for private practice veterinarians has declined since 2010, in part as a result of changes in age distribution over the past decade. Net present value of obtaining a veterinary degree is increasing for women but not for men. The unemployment rate for veterinarians continues to fall, but job satisfaction among veterinarians is decreasing, and burnout has risen.

These are some of the key findings presented during the fifth AVMA Economic Summit, held Oct. 23-24 in Rosemont, Illinois. Highlights from the latest AVMA pet demographic survey were also shared. The survey report—due out in 2018—found the number of households that owned dogs to be the highest since the AVMA began measuring pet ownership, while the number of cat owners has dropped drastically. Horse and pet bird ownership are declining, while backyard poultry ownership is "skyrocketing."

Frederic Ouedraogo, PhD

Real income for private practice veterinarians is falling, most notably within the equine industry.

Frederic Ouedraogo, PhD, AVMA economist

AVMA economist Frederic Ouedraogo, PhD, spoke about how demographic trends within the veterinary profession are impacting veterinary incomes, which, he said, when adjusted for inflation, have been declining since 2010. "Every year income goes up, but when we account for the real value of the dollar, we see income was actually lower," said Dr. Ouedraogo, who is an assistant director of the AVMA Veterinary Economics Division.

In 2006, income across the private veterinary practice sector represented a normal distribution when accounting for age, according to Dr. Ouedraogo: A minority of new veterinarians earning much less than the mean, a minority of older veterinarians earning much more than the mean, and a large majority of mid-career veterinarians earning near the mean. Yet, 10 years later, the low-earning minority had become the majority, a phenomenon that is likely to skew the veterinary income distribution for the foreseeable future, he said.

Veterinarians are likely to experience peak income—roughly $125,000 annually—by age 59, Dr. Ouedraogo said. Also, veterinarians who become practice owners soon after graduation earn more than those who become owners later in their career. "If you're not an owner after 10 years postgraduation, continue being a nonowner," he said. "Owners make money in the first years after graduation, and nonowners, they have low income initially, but after 30 years, their income is equal to owners'."

Charlotte Hansen, a statistical analyst in the AVMA Veterinary Economics Division, discussed during her presentation the net present value of obtaining a veterinary degree versus a bachelor's degree, with net present value representing the present value of the costs and benefits associated with earning a degree.

"Female veterinarians (on average) earn $300,000 in today's dollars (over) their lifetime more than they would (have), had they stopped at a bachelor's degree, while men (on average) make less money with a DVM than if they had just taken a bachelor's degree," Hansen said. She explained that, from a purely economic perspective, the opportunity costs of earning a DVM degree are, on average, higher for men because men typically earn more with a bachelor's degree than women do. Thus, men are, on average, forgoing more income than women do during the four years they spend in veterinary school.

Starting salaries for male and female veterinarians continue to climb, with men earning roughly $2,500 more than women, according to Hansen.

Hansen said further investigation of veterinary unemployment revealed the current rate to be 0.5 percent, not 1.5 percent as previously thought. "Clearly, the low level of unemployment is an indicator of the vigor of the market," she observed. As for underemployment, Hansen said more than 3,000 full-time–equivalent veterinarians are needed to satisfy the work hour preferences reported by practitioners.

Among the more troubling findings from Hansen's research, increasing numbers of veterinarians are reporting low compassion satisfaction, defined as gratification drawn from work. Hypothesized explanations for these developments include high educational debt and declining real income, she explained.