Manufacturing Low Pay: Declining Wages in the Jobs That Built America’s Middle Class

Executive Summary

Americans perceive manufacturing jobs as “good jobs.”

  • Nine out of ten Americans believe that a strong manufacturing base is very important to our country’s standard of living, according to a poll conducted by the consulting firm Deloitte for the Manufacturing Institute. When asked what type of facility they would support to bring jobs to their community, a manufacturing plant was at the top of the list.

Manufacturing wages now rank in the bottom half of all jobs in the United States.

  • 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 perception that manufacturing jobs are highly paid disguises how many workers are stuck at the bottom.

  • Today, more than 600,000 manufacturing workers make just $9.60 per hour or less. More than 1.5 million manufacturing workers—one out of every four— make $11.91 or less.

Manufacturing wages are not even keeping up with inflation.

  • Real wages for manufacturing workers declined by 4.4 percent from 2003 to 2013—almost three times faster than for workers as a whole.

In the largest segment of the manufacturing base—automotive—wages have declined even faster.

  • Real wages for auto parts workers, who now account for three of every four autoworker jobs, fell by nearly 14 percent from 2003 to 2013—three times faster than for manufacturing as a whole, and nine times faster than the decline for all occupations.
  • The growth in the number of auto parts jobs is cause for concern, because the typical parts worker makes one-third less than the typical auto assembly worker, and puts downward pressure on the higher assembly wages.

There has been a resurgence in the number of auto industry jobs since the economic crisis peaked in 2009.

  • The auto industry has added nearly 350,000 jobs and invested $38 billion in U.S. facilities since 2009, which indicates a long-term commitment to building vehicles here. As long as vehicles are assembled in the United States, the economic benefits of a just-in-time manufacturing base ensures that jobs at many parts suppliers are also likely to remain in the country, even if wages rise.

New jobs created in the auto sector are worse than the ones we lost.

  • In 5 of the 10 “Auto Alley” states—Michigan, Indiana, Ohio, South Carolina, and Tennessee—new hires at auto parts plants are paid roughly one-quarter less than the other auto parts workers in the state.
  • In 6 of the 10 Auto Alley states—Alabama, Mississippi, Indiana, Ohio, Michigan, and Illinois—auto parts workers saw real monthly earnings decline between 2001 and 2013. Alabama saw the steepest decline—24 percent—over that period.

Heavy reliance on temporary workers hides even bigger declines in manufacturing wages.

  • About 14 percent of auto parts workers are employed by staffing agencies today. Wages for these workers are lower than for direct-hire parts workers and are not included in the official industry-specific wage data cited above.
  • Estimates based on U.S. Census Bureau data, however, indicate that auto parts workers placed by staffing agencies make, on average, 29 percent less than those employed directly by auto parts manufacturers.

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