April 15, 2019

CT manufacturing wage growth outpaces most other industries

Photo | HBJ File
Photo | HBJ File
Young manufacturing workers in Connecticut are earning higher wages compared to their counterparts in many other industries.
Patrick J. Flaherty, Assistant Research Director, Department of Labor
Jamison Scott, Executive Director, NHMA
Paul Murphy, Executive Director, Aerospace Components Manufacturers
Cyndi Zolty, executive director of the Smaller Manufacturers Association in Waterbury.

Connecticut manufacturers are full of anecdotes about how they use higher-than-average starting wages to attract and retain younger talent, to replace experienced and aging workers they lose to competitors and retirement.

Now, the state Department of Labor has accumulated and analyzed salary data for thousands of manufacturing workers in the state and compared it to pay for all other industries combined.

Not surprisingly, the Connecticut wage data amassed by the U.S. Census Bureau and shared with DOL economists show the state's manufacturing workers in the last 10 years, from Dec. 2007 to Dec. 2017 (the latest available data), saw their average monthly salary climb 16.5 percent, to $7,155 vs. a 13.4 percent rise, to $5,859 a month, for all other industries.

"That tells me they really are trying to attract new workers into this industry by raising wages,'' said Patrick J. Flaherty, DOL's assistant research director.

Nationally, production workers' paychecks grew at an even faster pace in that 10-year period, climbing 26.1 percent to an average $5,448 a month. They also outpaced their other-industry peers, whose average pay rose 24 percent, to a monthly average of $4,572, data show.

But a closer look at the decade-long pattern for average salaries among Connecticut manufacturing recruits ages 22 to 24 shows their pay has risen three times faster than young adults in other industries.

Connecticut manufacturing workers in that age bracket saw their pay climb 28.1 percent, to $4,169 a month, the past decade vs. a 9.7 percent gain, to $2,593 monthly, for that age group in other industries, data show.

"The number is news, but it's no surprise whatsoever,'' said Jamison Scott, executive vice president of Woodbridge manufacturer Air Handling Systems.

To attract and retain workers, "manufacturers have to pay more,'' said Scott, who also leads the New Haven Manufacturers Association.

"I don't even know what the minimum wage is because we're so high,'' he said.

Driving the wage increases are myriad factors, including an increasingly competitive job market. Despite slow economic growth, Connecticut's unemployment rate remains below 4 percent, which means the labor pool is thin, forcing employers to pay more to retain and attract talent.

For manufacturers, the situation has been exacerbated by a well-publicized skills gap. The industry has thousands of open jobs as it deals with a retirement wave among older workers and a lack of enthusiasm among younger people to go into an industry that's been traditionally viewed as dirty and arduous.

Connecticut manufacturers have been trying to shed that perception, especially as they move toward the adoption of advanced technologies that require more skills in science, technology, math and engineering.

Paul Murphy, executive director of the Aerospace Components Manufacturers, said experienced workers are in high demand, but hard to find.

Cyndi Zoldy, executive director of the Smaller Manufacturers Association in Waterbury, said her members are increasingly seeking out and hiring technical high school and college students as interns and training and paying them to fill vital skills needs.

Starting pay for those on-the-job training slots, Zoldy said, typically ranges from $14 to $16 an hour — well above Connecticut's $10.10 hourly wage minimum. The state's median pay in 2017 was $15.64 an hour.

Manufacturers are also using other perks to lure workers. Scott says his employer, like many other manufacturers, provides full health benefits at no cost to its workers as an incentive.

Employers say they don't see any relief on pay and benefits, particularly with jet-engine builder Pratt & Whitney and Groton submarine-maker Electric Boat, and their suppliers, vying for thousands more workers.

Meantime, Flaherty, the DOL assistant research director, pointed to a curious trend in the manufacturing pay data. Despite the run-up in average manufacturing pay for 22-to-24 year olds, the industry's overall rise in wages was tempered by the fact that one older, high-paid manufacturing worker is often replaced by two younger, lower-paid replacements, he said.

The impact is that the younger workers' pay lowers the salary average for all manufacturing workers, masking the pay disparity between them and other workers in this state.

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