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September 2013 Newsletter

New Manufacturing Jobs Pay Better than Others

A new report from the Department of Commerce shows that manufacturing jobs live up to their reputation as good jobs.

Manufacturing Wages Show Growth: Real earning for new hires and incumbents from 2007 to 2011 grew, in manufacturing industries, 3.5 percent for new hires and 2.4 percent for incumbents. For non-manufacturing industries during the same time period, wages grew 0.1 percent for new hires, but fell 3.1 percent for incumbents. Source: U.S. Department of Commerce, Economics and Statistics Administration. Manufacturing Wages Show Growth

Manufacturing jobs created in recent years are well-paying jobs, according to a report released in late August by the U.S. Commerce Department’s Economics and Statistics Administration (ESA). The report found that new hires in manufacturing had 38 percent greater monthly earnings than new hires in other sectors at the end of 2011. The monthly earnings premium for the manufacturing workforce as a whole, including both new hires and incumbents, was 25 percent. This earnings premium results from both greater hourly earnings and from more hours of work per month.

Other findings of the report include:

  • At the end of 2011, the ratio of new hire earnings to incumbent earnings was about 8 percentage points higher in manufacturing than in other sectors.
  • Over time, the earnings of new hires relative to incumbents have been consistently higher in manufacturing.
  • Real average earnings of new hires in manufacturing grew 3.5 percent from 2007–2011, while earnings of incumbents in manufacturing grew about 2.4 percent. Over the same time, real earnings for hires in other industries were flat, and earnings for incumbents in other industries declined (see chart below).

Speaking to a gathering of U.S. manufacturers in Orlando, Florida, on August 21, U.S. Secretary of Commerce Penny Pritzker noted the significance of these findings. “Companies like yours are making and selling great products around the world at an all-time record pace. ‘Made in America’ is stronger than ever. … And just this week, we got even more good news. New hires in manufacturing had 38 percent higher monthly earnings that those in other sectors. So what’s clear is this: America’s new manufacturing jobs are good-paying jobs.”

The complete report can be found on the ESA website.