PI Original Ellyn Fortino Tuesday January 20th, 2015, 2:06pm

Manufacturing Wages On The Decline, Experts Say

A recent report shows that U.S. manufacturing wages have tumbled over the past decade. Progress Illinois takes a closer look at the findings and gets reaction from U.S. Rep. Bill Foster, who has been working on efforts to promote job training and growth in manufacturing. 

recent report by the National Employment Law Project is shedding light on the "hidden reality" of low-wage U.S. manufacturing workers.

"The public assumes that manufacturing jobs are highly paid, but the reality is that millions of manufacturing workers are at the bottom of the wage scale," the report reads. "While the manufacturing sector has been resurging in the last few years, growing by 4.3 percent between 2010 and 2012, the jobs that are returning are not the ones that were lost: wages are lower, the jobs are increasingly temporary, and the promised benefits have yet to be realized."

Of the approximately 6.2 million U.S. manufacturing production workers in 2013, over 1.5 million of them earned an hourly wage of $11.91 or less, including 600,000 who made $9.60 or less, according to NELP's analysis of data from the Bureau of Labor Statistics' Occupational Employment Statistics.

NELP's report shows that manufacturing wages overall have tumbled over the past decade, but workers in the automotive sector in particular have seen the biggest decline.

From 2003 to 2013, median inflation-adjusted wages for manufacturing workers as a whole ticked down by 4.4 percent, compared to a 1.52 percent drop for all occupations. Over the same time period, median real wages decreased 21 percent for auto manufacturing workers and 13.7 percent for auto parts workers.

In 2013, the median wage was $16.87 for workers in all occupations, $15.66 for all manufacturing workers, $24.83 for automakers and $15.83 for auto parts workers, who represent three of every four U.S. autoworker jobs, according to NELP.

"Manufacturing wages now rank in the bottom half of all jobs in the United States," the report says. "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."

U.S. Rep. Bill Foster (D-IL,11), a scientist and businessman who co-founded a company that manufactures theater lighting equipment, said the decline in manufacturing wages is "another symptom of the struggling middle class in this country."

"One of the significant factors that's driving this is a race to the bottom to low-wage states among manufacturers," Foster explained in a recent interview. "And what you see are factories that are lured out of Illinois with a promise that they can move to Kentucky or Indiana or wherever and pay poverty-level wages, and then that of course increases the safety net spending of the food stamps and Medicaid and you name it. So the net effect is that you're asking the taxpayers of Illinois to subsidize the deindustrialization of the Midwest, and this is a huge problem."

The report, meanwhile, showed that the manufacturing sector grew by 4.3 percent between 2010 and 2012, and nearly 350,000 new U.S. auto industry jobs have been created since 2009.

Though the country has seen an uptick in manufacturing jobs, "Unfortunately, there really is a dark side to this story," noted Bob Bruno, professor of labor and employment relations at the University of Illinois at Urbana-Champaign. "It's one that, quite frankly, people haven't been that anxious to talk about and that is the jobs that have been created have typically not been good-paying jobs. They have been, as this study reveals, at a lower wage and at a wage that is not sufficient to maintain a middle-class income."

"But since the jobs have started to return and people are working again, it's a trade off," added Bruno, who was not involved with the NELP report. "While I certainly don't think workers or their unions are comfortable accepting [that tradeoff], there's still a hesitancy to be too critical of the industry, because it's employing people again."

The report also highlighted the increasing trend of manufacturers relying more on temporary workers, who typically get paid less than direct hires. Auto parts workers employed by staffing agencies, for example, earn 29 percent less on average than their direct-hire counterparts, according to NELP's estimates based on U.S. Census Bureau data.

Official government counts for U.S. manufacturing workers as well as industry wage averages do not include workers employed by staffing agencies, meaning there is likely a bigger "low-wage crisis in manufacturing" than what NELP's findings showed.

Bruno pointed out that the manufacturing industry is also not as unionized as it once was, which has "certainly attributed" to the wage declines.

Manufacturing jobs today are "more likely to be a non-union job, where 20, 30 years ago it was most certainly going to be a union job," Bruno said, noting that public policy changes are likely needed to help lift manufacturing wages and protect unionization.

Foster, whose 11th district includes many manufacturing companies, has introduced various pieces of legislation and launched initiatives to promote job training and growth in the sector. He said the "markets may be a partial solution" to the wage issue.

"I'm hopeful that now with finally the unemployment rate dropping both nationally and in my district and as the labor market tightens up, workers will now be able to find that they have a little more negotiating strength. And if manufacturers are having a harder time finding people to fill those positions, they'll be willing to offer higher wages," the congressman said.

Getting more workers, and students, trained in high-skilled and higher-paid manufacturing jobs is also important, he added.

"I am working very strongly with initiatives for STEM [science, technology, engineering and math] education, because someone who can program a numerically-controlled machine can command a much higher wage than someone who can simply operate a piece of manufacturing equipment," Foster said.


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