Are US manufacturing jobs worth fighting for?
Historically, such work was seen as a ticket into the middle class — but data on their pay premium is mixed
Soumaya Keynes
© Ann KiernanPoliticians of all stripes seem to like it when people make stuff.
On August 19, President Joe Biden hailed the “pride and hope . . . being brought back to communities” by rising manufacturing employment.
And in a baffling display of mixed capitalisation, the Republican party platform pledges to “return Manufacturing Jobs”, as something “the American Economy and American Workers need right now”.
Some of this is politics talking.
While manufacturing employs less than a 10th of the US labour force, in the swing states of Michigan and Wisconsin that share is closer to a seventh.
And while the average American toils in the services sector, in surveys they still say manufacturing is “very important” for the economy.
But are these jobs really worth fighting for?
Production-line work can be noisy, repetitive and isolating.
A Gallup survey of engagement among US employees in 2024 found that although overall one in three said they felt involved in and enthusiastic about their work, in manufacturing that share was just one in four.
Still, historically, manufacturing jobs were seen as tickets into the middle class.
They were relatively stable, offered decent pay and benefits and disproportionately employed people without college degrees.
Supporters point to high “employment multipliers” — one job in manufacturing supports or even creates others along lengthy supply chains.
With low unemployment, anyone deployed in an extended supply chain could simply be doing something else.
But on some dimensions manufacturing jobs do seem somewhat better than average.
They are still slightly more stable than those elsewhere in the private sector.
And in March 2024 benefits were still relatively generous, averaging $15 an hour compared with just under $13 in service-providing industries.
Stability and benefits are nice, but what about cold hard cash?
This is where it gets complicated.
Data from the Current Employment Statistics survey suggests that average hourly pay in manufacturing relative to the rest of the private sector has been falling for decades, and in May 2018 finally sank below.
Among production workers the premium vanished in September 2006.
(Manufacturing has a relatively high share of supervisory workers, boosting the overall premium.)
This relative deficit of average pay within manufacturing seems to have shrunk slightly over the past year and a half, and there could be further catch-up as unions bargain to recover real losses after the recent inflationary episode, or even enjoy the fruits of US industrial policy.
Still, reversing that decades-old trend looks tough.
Although the long-term trends are similar, awkwardly the recent level of the manufacturing pay premium seems rather sensitive to the data set being used.
A working paper from Kimberly Bayard, Tomaz Cajner and Maria Tito of the Federal Reserve Board and Genevieve Gregorich of Columbia Business School uses the Current Population Survey to show that in 2019 across all workers it was still 7 per cent, though the one for production workers was much smaller.
The concern is that the authors are not comparing like with like.
What if different kinds of people work in manufacturing, affecting their wages?
After adjusting for differences, including in age, education and tenure, the authors use the CPS to find that in the 2010s production workers enjoyed a premium of around 1.5 per cent, slightly bigger than the unadjusted figure.
The study finds that this declining premium is partly associated with the fall in union membership, but also partly with the fact that the pay bump such membership delivers to manufacturing workers has fallen.
So while changing unionisation is an important part of the story, it is only one part.
What about when people move jobs?
Another approach allows researchers to calculate how much of any pay bump is associated with an individual’s sparkling personality and skillset, and how much is merely due to industry-hopping.
David Card and Jesse Rothstein of the University of California, Berkeley, and Moises Yi of the US Census Bureau do this using data from 2010 to 2018 and find a manufacturing pay premium of about 14 per cent.
To any politician feeling vindicated by these results, I would warn that new manufacturing jobs may be different from the old sort.
But to their critics I would say that although the benefits associated with working in manufacturing have certainly fallen, it seems too strong to say that they have disappeared.
And finally, I would caution that nostalgia is a powerful drug, best deployed carefully.
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