On Manufacturing Day, U.S. Commerce Department Unveils Report Showing Pay Premium Exists for Manufacturing


Friday, October 2, 2015

As “America’s Data Agency,” the Commerce Department today released a new report drawing on evidence from 10 federal data sets to show that a pay premium exists for workers in manufacturing industries. The report by the Economics and Statistics Administration’s Office of the Chief Economist rebuts criticisms about the existence of a manufacturing pay premium, and based on the evidence, clearly demonstrates that manufacturing jobs pay better than jobs in other sectors, with earnings up to 32 percent higher.

Today is Manufacturing Day, and more than 2,000 manufacturers across all 50 states are opening their doors to teachers, parents, and students to demonstrate the potential of 21st century manufacturing, through career workshops, open houses, educational and other events. In addition to Commerce senior officials participating in Manufacturing Day events, this report demonstrates the Department’s commitment to supporting the resurgence in manufacturing in America. 

Utilizing numerous federal data sets allows the calculation and comparison of the average pay of manufacturing workers and the average pay of workers overall. These datasets include the American Community Survey, the Current Population Survey, the Economic Census, and seven others published by the Census Bureau, Bureau of Economic Analysis, or Bureau of Labor Statistics.

The report highlights these key findings:

  • Based on hourly wages and salaries, manufacturing workers earn from 2 to 9 percent more on average than the overall average worker. 
  • When hours worked in a week or over the course of a year are taken into consideration, the estimated premium increases. Estimated premiums using weekly or annual pay data are as high as 32 percent. This larger premium is because manufacturing employees work more hours per week and per year on average.
  • Both new hires and the existing workforce enjoy a pay premium in the manufacturing sector, with new hires earning a larger premium than other workers.
  • The size of the premium also varies greatly depending on the occupation. For some occupations, manufacturing workers earn less than workers overall. At the other extreme, manufacturing workers in sales occupations earn 64 percent more than their counterparts in non-manufacturing sales occupations throughout the economy.

Recently, the Office of the Chief Economist (OCE) conducted other data-driven research on the manufacturing sector. In “Taking the High Road,” OCE adds to our understanding of wage variation across manufacturing by taking a deeper look at the variation of wages in establishments within manufacturing industries. OCE’s “What is Made in America?” report examines how to measure what is made in America, and a series of manufacturing industry profiles takes a broad look at the final output of U.S. manufacturers, their workers, and their geographic dispersion. Together, this work has refined our understanding of manufacturing jobs and shown that manufacturing in the U.S. is alive and well.

To view the report’s full findings, visit http://www.esa.doc.gov/sites/default/files/the-pay-premium-for-manufacturing-workers-as-measured-by-federal-statistics.pdf.

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Last updated: 2015-10-19 11:48

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