Factory Wages Stagnate, Study Finds

Real wages for manufacturing workers declined by 4.4% from 2003 to 2013

By Stephen Miller, CEBS Nov 26, 2014
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Many factory jobs now pay less in relation to other jobs than what workers in almost identical positions earned in the past, a November 2014 report from the National Employment Law Project, a pro-labor advocacy group, states.

“Manufacturing wages now rank in the bottom half of all jobs in the United States,” according to the report, Manufacturing Low Pay: Declining Wages in the Jobs that Built America’s Middle Class, which analyzed data from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau and other sources.

“While in the past, manufacturing workers earned a wage significantly higher than the U.S. average, by 2013 the average factory worker made 7.7 percent below the median wage for all occupations,” the report notes. Among the research findings:

The perception that manufacturing jobs are highly paid disguises how many workers are stuck at the bottom. More than 1.5 million manufacturing workers—one out of every four—make $11.91 an hour or less. New hires in the automotive sector, which is manufacturing’s largest component industry, earn less than $10 an hour.

Manufacturing wages are not keeping up with inflation. Real wages for manufacturing workers declined by 4.4 percent from 2003 to 2013—almost three times faster than for U.S. workers as a whole. Moreover, median wages for auto workers are falling significantly faster than for manufacturing workers overall.

“The median wage for all manufacturing workers in the United States is $15.66 per hour,” the report states. “In real terms, however, since 2003, the inflation-adjusted median hourly wage for manufacturing workers has declined by nearly $1.00 an hour, from $16.38 to $15.66 (in 2013 dollars). That amounts to a drop of over 4 percent. For a manufacturing worker who works 40 hours a week, 52 weeks per year, that translates to a drop in income of about $2,000 a year.”

More Temporary Workers

“Heavy reliance on temporary workers hides even bigger declines in manufacturing wages,” states the report.In the automotive industry, “the median wage of team assemblers working through staffing agencies is 29 percent lower than team assemblers directly hired in the auto parts industry,” the report notes.

“Workers looking for a manufacturing job, and especially one in an auto plant today, increasingly find that the only open positions are placed by staffing agencies that pay lower wages and provide fewer benefits as compared with direct hires, and that offer limited opportunities to secure a permanent-employee position,” the report relates. “Industrial and factory staffing now form the single largest source of revenue for the staffing industry.”

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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