Finance and Economics Discussion Series (FEDS)
March 2022 (Revised September 2024)
Are Manufacturing Jobs Still Good Jobs? An Exploration of the Manufacturing Wage Premium
Kimberly Bayard, Tomaz Cajner, Vivi Gregorich, and Maria D. Tito
Abstract:
This paper explores the factors behind the disappearance of the manufacturing wage premium—the additional pay a manufacturing worker earns relative to a comparable nonmanufacturing worker. With substantially larger declines across union members, we quantify the role of unionization by exploiting the heterogeneity in membership status across manufacturing industries. We find that the decline in union membership explains more than 70 percent of the decline in the wage premium since the 1990s for union members but does not affect nonunion premia. Our findings suggest that the erosion of “good” manufacturing jobs has contributed to the increase in overall wage inequality.
Keywords: Wage Inequality, Wage Premia, Manufacturing, Production Workers, Union Membership
DOI: https://doi.org/10.17016/FEDS.2022.011r1
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Original Paper: PDF | Accessible materials (.zip)
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