Manufacturing Jobs Are Back, But Wages Are Not
Ilan Mester posted on March 17, 2015 |


There’s good news and bad news for the American manufacturing industry. The good news is that the auto industry has slowly but surely bounced back from the economic crisis, adding 350,000 jobs since 2009. While the number of jobs has increased, the wages for manufacturing workers have not; they sit at the lower half of all jobs in the United States. That's the conclusion of a National Employment Law Project study titled Manufacturing Low Pay: Declining Wages in the Jobs that Built America's Middle Class

Manufacturing workers vs. private-sector employees 

This is a stark contrast from the past, when manufacturing jobs ranked above the U.S. average. According to the Census Bureau’s Current Population Survey (CPS), manufacturing workers earned a median wage that was higher than the average for all private-sector workers up until the 1980s. The gap peaked in the mid ‘80s, when manufacturing workers on average earned 7.6 more than the average private-sector employee. However, the average wage started to fall after that.

The average manufacturing wage has decreased steadily over the last 10 years. Source: U.S. Census Bureau, Current Population Survey.
The average manufacturing wage has decreased steadily over the last 10 years. Source: U.S. Census Bureau, Current Population Survey.

Increasing wage gap for production workers 

In 2007, the wage gap between the average manufacturing worker and all private-sector workers was barely noticeable ($19.40 and $19.57 respectively). However, by 2013 the average manufacturing wage had fallen by 85 cents, or 7.7 percent below the median average for all occupations. Today, approximately 1.5 million manufacturing workers – one in four – earn $11.91 or less per hour. Meanwhile, 600,000 workers make just $9.60 an hour.


The average production worker now earns 7.7 percent less than the average private-sector employee. Source: Bureau of Labor Statistics.
The average production worker now earns 7.7 percent less than the average private-sector employee. Source: Bureau of Labor Statistics.

Auto parts workers, which make up the majority (approximately 75 percent) of all autoworker jobs, are among the most affected in the field. Wages in this field have fallen by nearly 14 per cent between the 10-year timeframe of 2003 and 2013. That’s about nine times faster than the average decline rate for all occupations.

Monthly earnings decline for auto parts workers 

In half of the “Auto Alley” states (Indiana, Michigan, Ohio, South Carolina and Tennessee) new employees are earning one-quarter less than their counterparts. Furthermore, auto parts workers in six Auto Alley states (Indiana, Mississippi, Alabama, Ohio, Michigan and Illinois) have experienced a monthly earnings decline between the 12-year period of 2001 and 2013. The state with the most significant decline was Alabama, with a whopping 24 percent over that period.

Part of the problem is that staffing agencies employ a large portion – approximately 14 percent – of all auto parts workers. These workers tend to receive lower wages than their direct-hire counterparts; according to the U.S. Census Bureau data, staffing agency hires earn 29 percent less than employees hired directly by the manufacturers.

More than 1.5 million manufacturing workers (one out of every four) make $11.92 an hour. Furthermore, 600,000 workers make less than $10 an hour. Source: Bureau of Labor Statistics.
More than 1.5 million manufacturing workers (one out of every four) make $11.92 an hour. Furthermore, 600,000 workers make less than $10 an hour. Source: Bureau of Labor Statistics.

Another problem is that manufacturing wages have not kept up with inflation. The average manufacturing worker in the U.S. makes $15.66 an hour. And if this trend continues, the wage gap will likely widen even more for these workers.

With files from the National Employment Law Project.

 

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