The Benefits of Manufacturing Jobs

Executive Summary - ESA Report

The role of the manufacturing sector in the U.S. economy is more prominent than is suggested solely by its output or number of workers. It is a cornerstone of innovation in our economy: manufacturing firms fund most domestic corporate research and development (R&D), and the resulting innovations and productivity growth improve our standard of living. Manufacturing also drives U.S. exports and is crucial for a strong national defense.

The current economic recovery has witnessed a welcome return in manufacturing job growth. Since its January 2010 low to April 2012, manufacturing employment has expanded by 489,000 jobs or 4 percent— the strongest cyclical rebound since the dual recessions in the early 1980s. From mid-2009 through the end of February 2012, the number of job openings surged by over 200 percent, to 253,000 openings. Coupled with attrition in the coming years from Baby Boomer retirements, this bodes well for continued hiring opportunities in the manufacturing sector.

The rebound in manufacturing is important, not only as a sign of renewed strength, but also because manufacturing jobs are often cited as “good jobs:” they pay well, provide good benefits, and manufacturing workers are less likely to quit than workers in other private sector industries. In fact, analysis finds evidence in support of these claims. Specifically, this report shows that:

• On average, hourly wages and salaries for manufacturing jobs were $29.75 an hour in 2010 compared to $27.47 an hour for non-manufacturing jobs. Total hourly compensation, which includes employer-provided benefits, was $38.27 for workers in manufacturing jobs and $32.84 for workers in non-manufacturing jobs, a 17 percent premium.
• Even after controlling for demographic, geographic, and job characteristics, manufacturing jobs maintained significant wage and benefit premiums.
• The educational attainment of the manufacturing workforce is rising steadily. In 2011, 53 percent of all manufacturing workers had at least some college education, up from 43 percent in 1994.
• The innovative manufacturing sector relies more heavily on STEM (science, technology, engineering and mathematics) education than the non-manufacturing sectors. In 2011, nearly 1 out of 3 (32 percent) of college-educated manufacturing workers had a STEM job, compared to 10 percent in non-manufacturing sectors.

Higher educational attainment for manufacturing workers carries higher premiums, and the size of the premium, including or excluding benefits, increase consistently with educational attainment.
Furthermore, the compensation premium has risen over the past decade across all levels of educational attainment.

In sum, manufacturing jobs provide benefits to workers with higher overall compensation than other sectors, and to the economy through innovation that boosts our nation’s standard of living.