U.S. Department of Commerce Economics and Statistics Administration just released a new report that describes why manufacturing jobs are good jobs using compelling facts and data from the Quarterly Workforce Indicators report. 

New hires in the manufacturing sector fare better than new hires in other industries.

  • New hires in manufacturing enjoy an earnings premium relative to other new hires. This premium peaked during the recession but has returned to near its pre-recession average. At the end of 2011, the manufacturing earnings premium for new hires stood at about 38 percent.
  • At the end of 2011, the ratio of new hire earnings to incumbent earnings was about 8 percentage points higher in manufacturing than in other industries.
  • Over time, the earnings of new hires relative to incumbents have been consistently higher in manufacturing. From 2000 to 2011, the earnings of new hires were about 70 percent of incumbents’ earnings in manufacturing, compared to an average of 60 percent in other industries.
  • Since the recession began, real average earnings for new hires in manufacturing grew 3.5 percent, while earnings of incumbents in manufacturing grew about 2.4 percent. Over the same time, real earnings for hires in other industries were flat, and earnings for incumbents in other industries declined.

We have reported before about the difficulties of recent college grads to find meaningful employment, and that trend is widely reported in the press.

So imagine our delight to see authoritative statistics from the Dept. Of Commerce, with data from the Quarterly Workforce Indicators report, cross checked and validated against the Current Population Survey, that confirm that manufacturing new hires consistently earn a premium over others in other industries!

How big a deal is the earnings premium?

earnings premium figure 1

Figure 1 illustrates the earnings premium, that is, the average percentage earnings gap enjoyed by new hires in manufacturing compared to new hires in other industries. Prior to the recession, earnings of new hires in manufacturing were about 37 percent higher than new hire earnings in other industries. The premium for new hires in manufacturing began to increase in 2008, peaking at just over 50 percent in 2010. The premium has declined during the recovery but remains above its pre-recession level.

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 Earnings of New Hires In Manufacturing report from Dept. of Commerce