Manufacturing Update: April 2007

This month marked another historic low in US manufacturing jobs with an estimated 14,076,000 total jobs in manufacturing—employment levels not seen since in this sector since July 1950. 

Manufacturing employment still equals nearly 10.2 percent of all nonfarm employment in the United States.  And the overall manufacturing workers’ unemployment rate increased in April to 4.6 percent, up from 4.5 percent in March, is slightly above the national average (4.5 percent).  (See Chart M1 to compare unemployment rates in manufacturing in March 2006 and March 2007). 

The manufacturing sector lost an estimated 151,000 jobs since April 2006 (seasonally adjusted).  Chart M2 shows aggregate employment in the manufacturing industry for the last 13 months.

Chart M1

Chart M2

Average hourly wages for manufacturing in April were estimated at $17.20/hr, compared to $17.35/hr for the average among all private-sector, non-farm wages.  Compounding the drop in manufacturing jobs is a troubling continued decline in the annual average rate of wage growth in Manufacturing.  For eight of the past thirteen months, manufacturing wages remained below the average wages of all private sector workers, which is a phenomenon that has not occurred since the 1970s. Chart M3a shows a comparison of average hourly wages for all private sector worker and manufacturing since April 2006.

One encouraging trend for manufacturing wages is the annual growth of manufacturing wages relative to the annual rate of inflation.  Wages in manufacturing grew at 2.7 percent for the year.  With inflation in March (the most recent month available) increasing to 2.8 percent for the last twelve-month period (all urban consumers), the purchasing power of manufacturing wages fell just short of breaking even. See manufacturing workers’ wages in Chart M3.

Chart M3

Chart M3a

High-Wage Manufacturing Industries In Sectors With Substantial Union Representation

We selected the 41 industries in this section by first looking at industries at the 3-digit level (a highly aggregated level) in the North American Industry Classification System (NAICS) that had more than 50,000 employees represented by unions in 2004.  From among those industries, we then selected the industry subgroups at the less aggregated 4-digit level that had an average 2004 wage of $15.00 or higher.  (February is the most recent month for which data on industry sub-groups are available.)

Employment Change. Of those 41 industry subgroups, 17 industry subsectors saw job gains in the year; 24 lost employment in the last year. This is the first time in several months that the number of high-wage manufacturing industries experiencing losses surpassed the number experiencing gains. (See Chart M4 for details ).

Percentage Change in Employment. Employment in manufacturing as a whole remained relatively stagnant over the last year, declining by a fraction of a percent (0.8 percent, not seasonally adjusted).  Chart M6 shows the percentage change in employment during this period in each high-wage manufacturing industry in a sector with substantial union representation.  The greatest percentage gains were in agricultural, construction and mining machinery (6.7 percent) and the greatest percentage losses were in motor vehicles (down 6.1 percent). The sector experiencing the most significant growth was commercial & service industry machinery (up 4.6 percent).  Motor vehicles (down 6.1 percent) and motor vehicle parts (down 6.0 percent) experienced the largest decline in the last twelve-months.

Chart M7

High-Wage Manufacturing Industries That Had Job Growth in the Last Decade

In addition to tracking employment trends for high-wage manufacturing industries in sectors with substantial union presence, we are interested in tracking employment among those high-wage manufacturing industries that experienced job growth from 1994-2004, regardless of union representation.  This section follows the five industries that met this criterion and that also had an average 2004 production worker hourly wage of at least $15.00.

Only two of the five high-wage manufacturing industries that experienced job growth from 1994-2004 also experienced job growth in the past year (Chart M7). Showing the strongest actual increase over the last year, machine shops & threaded products grew by 7,300 jobs (2.1 percent) and pharmaceuticals and medicines grew by 7,100 jobs (2.5 percent).  (See Chart M8).  Motor vehicle bodies and trailers showed a decrease of 1.6 percent (down 2,900 jobs), as did ship & boat building declining by 1.4 percent (down 2,100 jobs) and cement & concrete products by 1.2 percent (down 3,000 jobs) (Chart M9). 

Chart M8

Chart M9

Back to Economic Update