U.S. Department of Commerce

Economics and Statistics Administration

By

David Langdon 

and Rebecca 

Lehrman.

Thanks to 

George 

McKittrick, 

Pragya Nandini, 

Cordaye 

Ogletree, 

Robert 

Rubinovitz, 

Mark Doms,

Office of the 

Chief 

Economist, Jane 

Callen, and Jo 

Caldwell, Office 

of the Under 

Secretary

The Benefits of Manufacturing Jobs

May

2012

Executive Summary

ESA 

Issue Brief 

#01-12

T

he 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 percent1— 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.2 Coupled with attrition in the coming years from Baby Boomer retirements, this bodes well for continued hiring opportunities in the manufacturing sector.3

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.4In 

fact, our 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. 
2 U.S. Department of Commerce, Economics and Statistics Administration

When most people think about job quality, pay levels are the first metric that comes to mind. By this 

measure, manufacturing jobs are good jobs: a basic 

comparison of average wages (Figure 1) shows that 

hourly wages and salaries were 8 percent higher in 

How Do Manufacturing Jobs 

Stack Up?

manufacturing than other private industries as of 

2010, based on National Income and Product Accounts (NIPA) data available from the Commerce 

Department’s Bureau of Economic Analysis.5

Yet, a trip to the doctor and planning for retirement 

are two quick reminders that wages alone are an 

incomplete measure of job quality. Expanding the 

definition to include benefits makes manufacturing 

jobs even more attractive to workers than nonBasic wage and compensation 

comparison Benefits

Figure 1. Employee Compensation per Hour by Major Industry, 2010

$29.75 $27.47

$8.52

$5.37

$0

$5

$10

$15

$20

$25

$30

$35

$40

Manufacturing Non-manufacturing

industries

Wages and salaries:

8% difference

Benefits:

59% difference

Total compensation:

$38.27 17% difference

$32.84

Source: ESA calculations using unpublished data from the National Income and Product Accounts, Bureau of Economic Analysis. 

Note: Wages and salaries include paid leave and supplemental pay, such as overtime and premium pay, shift differentials, and non-production bonuses. 

76% 78%

32%

72%

90%

55%

62%

18%

57%

66%

0%

20%

40%

60%

80%

100%

Both medical care 

and retirement 

benefits

Any retirement 

benefit

Defined 

benefit plan

Defined contribution 

plan

Medical care 

benefits

Manufacturing

Private service-providing industries

Figure 2. Percent of Private Industry Workers with Retirement and 

Medical Care Benefits, March 2011

Source: National Compensation Survey, Bureau of Labor Statistics. 
U.S. Department of Commerce, Economics and Statistics Administration 3

manufacturing jobs. First, manufacturing workers 

are more likely to have the option of medical care 

and retirement benefits, as Figure 2 highlights. 

Ninety percent of manufacturing employees have 

access to medical care benefits, compared with 66 

percent of workers in private service-providing industries.6,7 And 78 percent of manufacturing workers receive employer contributions to their retirement benefits (primarily to defined-contribution 

plans), versus 62 percent of workers in serviceproviding industries.8

Manufacturing workers also are more likely to take 

advantage of these benefits. In manufacturing establishments, 81 percent of workers take advantage of medical care benefits compared with a 71 

percent “take-up rate” in service-providing industries.9

 This is likely driven by the fact that manufacturing employers pay a higher share of health 

care premiums than their service providing counterparts. For single coverage and family coverage, 

manufacturing employers pay 82 percent and 75 

percent, respectively, as compared to the 79 percent and 68 percent share paid by service industry 

employers.10 In dollars and cents, the median 

monthly employee contribution for family coverage is about $262 in manufacturing and $353 in 

service-providing industries.11 Similar advantages 

are also seen in other benefits. For example, 

manufacturing workers have greater rates of access to paid leave and paid vacation than workers 

in service-providing industries.

Taking into account employer contributions to 

benefits such as medical insurance and retirement 

highlights an even larger difference between 

worker compensation in manufacturing and nonmanufacturing industries. As seen in Figure 1, the 

average hourly contributions for insurance, retirement and savings, and legally required benefits 

sum to $8.52 in manufacturing, or 59 percent 

higher than in non-manufacturing industries. As a 

result, total hourly compensation, including benefit 

contributions, is 17 percent higher for manufacturing relative to non-manufacturing workers—$38.27 

compared with $32.84.12

The manufacturing sector has been steadily “upskilling” in the last two decades: more manufacturing employees are higher educated and higher 

skilled than in the past. Figure 3 demonstrates the 

increasing share over time of workers with at least 

some college in the manufacturing and nonmanufacturing workforces. Since 2007, more than 

half of all manufacturing workers have completed 

some college classes, and the proportion continues 

to increase.13 The wage and compensation preEducational Attainment of the 

Manufacturing Workforce

Figure 3. Percent of Employment by Industry and Educational Attainment, 1994-2011

Source: ESA calculations using Current Population Survey public-use Merged Outgoing Rotation Group files, National Bureau of Economic Research. 

30%

35%

40%

45%

50%

55%

60%

65%

70%

1994 1996 1998 2000 2002 2004 2006 2008 2010

High school diploma or less

Some college or college degree

Manufacturing

Private nonmanufacturing 
4 U.S. Department of Commerce, Economics and Statistics Administration

mium manufacturing workers enjoy relative to their 

non-manufacturing peers also is tied to educational 

attainment, as detailed below. On average, highereducated workers have a larger premium from 

working in the manufacturing sector.

More generally, workers who drive innovation in 

our economy earn a premium relative to their 

peers in other industries or occupations. This innovation premium has been discussed in a series of 

earlier ESA reports published in 2011 about workers in science, technology, engineering and mathematics (STEM). 

The manufacturing sector is a major employer of 

STEM workers. As shown in Figure 4, overall 13 

percent of manufacturing workers have STEM jobs, 

compared with 5 percent of workers in other private industries. Because a college education is the 

main path to many STEM positions, it not surprising 

that the STEM employment share increases with 

educational attainment. Nearly one out of three 

college-educated manufacturing workers has a 

STEM job; in non-manufacturing industries, the 

share is one in ten. Interestingly, these relative 

shares hold across all three categories of educational attainment, as the STEM share in manufacSource: ESA calculations using Current Population Survey public-use microdata.

Note: Estimates are for full-time private wage and salary workers age 25 and older. 

Figure 4. Percent of STEM Employment by Industry and Educational Attainment, 2011

$17.43

$22.11

$34.82

$16.71

$19.95

$30.38

$0

$10

$20

$30

High school 

diploma or less

Some college or associate degree Bachelor's degree 

and higher

Manufacturing

Non-manufacturing industries

Figure 5. Average Hourly Earnings by Industry and Educational Attainment, 2011

13%

3%

11%

32%

5%

1%

4%

10%

0%

5%

10%

15%

20%

25%

30%

35%

Total High school 

diploma or less

Some college or 

associate degree

Bachelor's degree 

and higher

Manufacturing

Non-manufacturing

Source: ESA calculations using Current Population Survey public-use microdata.

Note: Estimates are for private wage and salary workers age 25 and older. 
U.S. Department of Commerce, Economics and Statistics Administration 5

turing is approximately three times higher than in 

non-manufacturing industries. 

Clearly, manufacturing jobs are attractive relative 

to other industries. Yet, in order to quantify the 

extent to which a wage premium really exists in 

manufacturing, it is important to consider the extent to which factors such as educational attainment, location, and job characteristics of workers 

affect wages. In order to evaluate the influence of 

these factors on wages, we used public-use microdata from the U.S. Census Bureau’s Current Population Survey (CPS).14

 As reflected in Figure 5, the 

educational attainment of a given worker does 

matter. The wage premium increases with educational attainment; the manufacturing earnings differential is greatest for those with a bachelor’s degree and higher who earned $34.82 per hour, or 15 

percent more per hour than those in nonmanufacturing jobs with similar education levels. 

In contrast, manufacturing workers with a high 

school diploma or less earn about 4 percent more, 

on average, than their counterparts in nonmanufacturing jobs.

To more fully examine the role of education along 

with such other characteristics as demographics 

Figure 6: Regression-based Earnings Premium for Manufacturing Workers, 2000-2011

Source: ESA calculations using CPS public use microdata files for annual merged outgoing rotation groups for 1994 to 2011 from www.nber.org/data/morg.html. 

Regression of log hourly earnings vs. age variables, dummies for gender & marital status, race & Hispanic origin, citizenship, education, metropolitan area, region, 

union membership, occupation, full-time, manufacturing interacted with time, and time. Top-coded earnings multiplied by 1.5. Coefficients transformed back to 

percent for graph. Private wage and salary workers 25 years and older with earnings > minimum wage x 0.4.

Why is there a wage premium in manufacturing?

The efficiency wage theory is often cited as one explanation for the existence of a manufacturing wage premium. This states that many firms pay higher wages in order to encourage more cooperation from the workforce and minimize turnover (Krueger and Summers). Others have noted that industries with larger firms tend 

to pay more (Dickens and Katz). This supports the efficiency theory because workers are more difficult to 

monitor as firm size increases. Paying these workers more discourages shirking without necessitating higher 

levels of monitoring. Furthermore, studies have shown that the higher productivity levels and the ratio of 

real value-added to the number of manufacturing employees accounts for the premium (Genre et al.). 

———————

Dickens, William T, Lawrence F. Katz. “Interindustry Wage Differences and Industry Characteristics.” NBER Working Paper No. 2014, September 1986. 

Genre, Veronique, Kohn, Karsten, Daphne Momferatou. “Understanding Inter-Industry Wage Structures in the Euro Area.” IZA Discussion Paper No. 

4114, April 2009. 

Krueger, Alan B., Lawrence H. Summers. “Efficiency Wages and the Inter-Industry Wage Structure.” Eonometrica, 56:2, March 1988, 259-293. 

Wage Premium for 

Manufacturing Workers

0%

3%

6%

9%

12%

2000 2002 2004 2006 2008 2010

Bachelor's degree and higher

High school diploma or less

Some college or associate degree

Total
6 U.S. Department of Commerce, Economics and Statistics Administration

$15

$18

$21

$24

$27

$30

2000 2002 2004 2006 2008 2010

$3

$6

$9

2000 2002 2004 2006 2008 2010

Manufacturing hourly wages

Non-manufacturing hourly wages

Manufacturing hourly employer benefit contributions

Non-manufacturing hourly employer benefit contributions

and geographic location, we performed regression 

analyses investigating the extent to which log 

hourly earnings were explained by factors including 

age, marital status, race, ethnicity, region, metropolitan area status, union status, and occupation.15

 

After controlling for the impacts of this set of characteristics, the manufacturing wage premium in 

2011 was estimated to be 7 percent.16

As shown in Figure 6, the regression-adjusted 

manufacturing premium rises with educational attainment. The other result of note in Figure 6 is 

that the manufacturing earnings premiums have 

remained relatively constant for workers with a 

bachelor’s or graduate degree, whose premium 

ranged from 8 to 10 percent between 2000 and 

2011.17 The premium earned by manufacturing 

workers with some college or an associate’s degree 

declined during the first half of the decade and 

largely rebounded in the following years, reaching 

7 percent in 2011. Workers with a high school diploma or less saw the premium decline from about 

6 percent in 2000 to 3 percent by 2005. Since then, 

their premium has fluctuated between 3 and 4 percent.

The monthly CPS does not collect information on 

employer contributions to benefits; however, it is 

possible to take into account these contributions by 

using NIPA data on the share of total compensation 

that corresponds to benefits (or “supplements to 

wages and salaries” in NIPA jargon). These compensation data highlight the increasingly important 

role that benefits have played, particularly in manufacturing. Between 2000 and 2010, real hourly 

compensation in manufacturing rose more rapidly 

than in private non-manufacturing industries, 16 

percent versus 11 percent. As shown in Figure 7, 

the differential growth comes largely from the employer contributions to employee benefits, as the 

10 percent growth in real wage and salary accruals 

per full-time equivalent (FTE) in manufacturing 

modestly exceeded the 8-percent nonmanufacturing growth. Benefit contributions per 

manufacturing FTE climbed practically by half (48 

percent) from 2000 to 2010, essentially double the 

25 percent growth for non-manufacturing FTEs.

Following the lead of Krueger and Summers,18 the 

NIPA data were used to calculate the ratio of total 

compensation to wage and salary accruals by inFigure 7: Real Compensation per Hour by Private Industry, 2000-2010 in 2010 dollars

Source: ESA calculations using data from National Income and Product Accounts, Bureau of Economic Analysis. 

Note: Real compensation was calculated using the personal consumption expenditures price deflator. 

Regression-adjusted Total 

Compensation Premium
U.S. Department of Commerce, Economics and Statistics Administration 7

dustry and year. These ratios were applied to the 

CPS-based hourly wage estimates. The resulting 

estimate of hourly total compensation can be used 

to estimate the total compensation premium in 

manufacturing.

Adjusting for total compensation significantly 

boosts the regression-adjusted premium associated 

with manufacturing jobs, as shown in Figure 8. 

While in 2011 the overall regression-adjusted wage 

premium was 7 percent, the compensation premium was more than twice as high, at 15 percent.19

 

Also, parallel to the wage results, the compensation 

premium is correlated with educational attainment: 

college graduates in manufacturing jobs have total 

compensation that is about 19 percent higher than 

workers in other industries. For workers with no 

more than a high school diploma, the compensation premium was 11 percent (Figure 9). 

This consideration of total compensation, as opposed to just wages and salaries, reveals a manuSource: ESA calculations using Current Population Survey public-use microdata and data from the National Income and Product Accounts. 

Note: Estimates are for private wage and salary workers age 25 and older. 

Source: ESA calculations using Current Population Survey public-use microdata and data from the National Income and Product Accounts. 

Note: Estimates by educational attainment (blue bars) are for private wage and salary workers age 25 and older. 

7%

3%

7%

9%

15%

11%

15%

19%

0%

5%

10%

15%

20%

Total High school 

diploma or less

Some college or 

associate degree

Bachelor's degree 

and higher

Earnings premium

Total compensation premium

4%

8%

12%

16%

2000 2002 2004 2006 2008 2010

Earnings premium

Total compensation premium

7%

15%

Figure 9. Regression-adjusted Manufacturing Earnings and Total Compensation Premium,2011

Figure 8. Regression-adjusted Manufacturing Earnings and Total Compensation 

Premium, 2000-2011
8 U.S. Department of Commerce, Economics and Statistics Administration

facturing premium that increased on net over the 

past decade.20 As shown in Figure 8, the overall 

premium entered the 2000s at 12 percent and was 

15 percent as of 2011. For workers at all three levels of educational attainment, the premium grew 

between 2000 and 2011. The premium for workers 

with a high school diploma or less increased from 9 

percent in 2000 to 11 percent in 2011, while the 

premium for workers with some college or an associate degree rose 4 points to 15 percent as of 2011 

and the premium for workers with a bachelor’s degree or higher rose 4 points to 19 percent.

The United States’ manufacturing sector has long 

been a source of well-paid jobs for relatively lesseducated workers and thus has helped support a 

strong middle class. Today, the sector continues to 

provide good paychecks as well as important fringe 

benefits. This report highlights the persistent wage 

and even higher total compensation premium 

earned by the country’s manufacturing workforce. 

While the premium exists for both low- and highskilled workers, it does rise with educational attainment. The educational attainment of the manufacturing workforce has been increasing over time, as 

more than half of manufacturing workers have 

completed at least some college and those who 

enter with a high school diploma are likely to continue their education through extensive on-the-job 

training. Workers who pursue manufacturing jobs 

now and in the future will earn premium pay and 

benefits while contributing directly to the competitiveness and innovative capacity of the United 

States.

Inter-industry Wage Premiums

While the U.S. economy generates good jobs 

across industries, wage premiums persist in several industries. Expanding the regression analysis using the CPS microdata, in order to examine 

a dozen broad industries, uncovers sizeable 

earnings premiums in mining (27 percent), construction (12 percent), and financial activities (11 

percent), followed by durable goods manufacturing (8 percent) in 2011. A 5 percent premium in 

the nondurable goods manufacturing industry 

ranked it seventh on the list. At the tail end 

were leisure and hospitality at -19 percent and 

retail trade at -17 percent. It is worth noting 

that the mining, construction, and financial services industries each employ fewer people than 

manufacturing, which in turn employs fewer 

people than retail trade and leisure industries. 

With rising productivity, shifting employment 

from low wage industries to manufacturing of 

necessity would result from increasing demand 

for manufacturing output, either through higher 

domestic demand, increased exports, or import 

substitution. Foreign demand has fueled much 

of the recent surge in manufacturing activity and 

employment, as exports of manufactured goods 

rose 38 percent (in current dollars) from 2009 to 

2011.

Conclusion
U.S. Department of Commerce, Economics and Statistics Administration 9

2011, hourly manufacturing wages and salaries were 9 

percent higher than in non-manufacturing industries.

6

“Service-providing industries” exclude the mining and 

construction industries and thus are a slightly more narrow industry grouping than “non-manufacturing.” The 

National Compensation Survey data on benefit access 

are available for service-providing industries, but not the 

broader non-manufacturing grouping. Nevertheless, the 

general conclusions about the benefits access would be 

the same whether the comparison group is serviceproviding industries or non-manufacturing industries.

7

Bureau of Labor Statistics, Employee Benefits Survey, 

Table 9. www.bls.gov/ncs/ebs/benefits/2011/

ownership/private/table05a.pdf. 

8

Bureau of Labor Statistics, Employee Benefits Survey, 

Table 2. www.bls.gov/ncs/ebs/benefits/2011/

ownership/private/table02a.pdf.

9

Bureau of Labor Statistics, Employee Benefits Survey, 

Table 9. www.bls.gov/ncs/ebs/benefits/2011/

ownership/private/table05a.pdf. 

10Bureau of Labor Statistics, Employee Benefits Survey, 

Table 11. www.bls.gov/ncs/ebs/benefits/2011/

ownership/private/table06a.pdf.

11Bureau of Labor Statistics, Employee Benefits Survey, 

Table 16. www.bls.gov/ncs/ebs/benefits/2011/

ownership/private/table11a.pdf.

12It is important to highlight two caveats to the benefit 

contribution data. First, the data do not take into account any intra-industry variation in the ratio of compensation to earnings, although it is likely that the ratio 

is correlated to workers’ occupation and union status, 

among other factors. Second, the compensation figures 

include not just the employer contributions for workers 

currently on payrolls, but also potentially to some retirees, such as those receiving employer-provided medical 

insurance. To the extent that manufacturing retirees are 

more likely than other workers to receive employer contributions, or more generous contributions, for their 

medical insurance premiums, then this adjustment could 

bias the manufacturing compensation premium upwards. Estimates from the Medical Expenditure Panel 

Survey, which is one of the data sources for the NIPA 

compensation estimates, suggest that there would be 

little if any upward bias due to the availability of medical 

insurance. In fact, the estimates show that manufacturing and mining retirees (there are not separate manufacturing estimates) are less likely than retirees from other 

industries to have access to medical insurance. In 2011, 

7.9 percent of manufacturing and mining retirees age 65 

and over and 8.4 percent under age 65 were offered 

insurance, compared to 10.9 percent of retires age 65 

Endnotes

1

Bureau of Labor Statistics, Current Employment Statistics. www.bls.gov/ces. 

2

Bureau of Labor Statistics, Job Openings and Labor 

Turnover Survey. www.bls.gov/jlt. 

3

It is important to distinguish between job opportunities and net job growth. While, the Bureau of Labor 

Statistics (BLS) recently projected essentially no net 

change in manufacturing employment between 2010 

and 2020, millions of openings in the sector will arise 

in the coming years in order to replace workers who 

retire or otherwise leave manufacturing jobs. BLS 

projects such openings by occupational category, and 

it estimates that, for example, production occupations (which are predominately in the manufacturing 

industry) will increase by 356,800 between 2010 and 

2020, companies will actually need to fill more than 

2.2 million openings over the decade. In short, 

manufacturing firms will continue to be a good 

source of good job opportunities. One factor potentially limiting the growth in manufacturing jobs is a 

mismatch between the skills needed for the jobs and 

the skills held by those looking for jobs. See, for example, “An economy that works: Job creation and 

America’s future,” Manyika et al., McKinsey Global 

Institute (June 2011).

4

Bureau of Labor Statistics, “Job Openings and Labor 

Turnover—February 2012,” Table 3. www.bls.gov/

news.release/pdf/jolts.pdf.

5

This report draws heavily upon data from the Current Population Survey and the National Income and 

Product Accounts when comparing manufacturing 

and non-manufacturing earnings. These are just two 

of several potential sources of data on hourly employee compensation by industry. While the multiple 

sources may differ somewhat in definitions, frequency, and statistical methodology, all show that on 

average manufacturing workers have higher earnings 

than workers in other private industries. The NIPA 

data cited in Figure 1 show that average hourly wages 

and salaries in manufacturing were 8 percent higher 

than in non-manufacturing industries in 2010. Current Population Survey data for the same time period 

show a 4 percent difference. Three other data 

sources from the Bureau of Labor Statistics are in the 

same ballpark. Monthly payroll survey (or Current 

Employment Statistics data) for 2010 have hourly 

manufacturing earnings 4 percent above nonmanufacturing earnings, while Occupational Employment Statistics program estimates show a 7 percent 

difference. According to unpublished estimates from 

the National Compensation Survey for September 
10 U.S. Department of Commerce, Economics and Statistics Administration

The authors are economists in the Office of the Chief 

Economist of the U.S. Department of Commerce’s 

Economics and Statistics Administration.

Technical inquiries:

Office of the Chief Economist

(202) 482-3523

Media inquiries: 

Office of Communications

(202) 482-3331

U.S. Department of Commerce

Economics and Statistics Administration

1401 Constitution Ave., NW

Washington, DC 20230

www.esa.doc.gov

and over and 11.7 percent of younger retirees in other 

industries. See Tables I.A.1, I.A.2.a, and I.A.2.e at http://

meps.ahrq.gov/mepsweb/data_stats/

quick_tables_search.jsp?

component=2&subcomponent=1.

13One important factor that is not captured by the CPS is 

up-skilling through on-the-job training. A recently revised taxonomy of occupations by typical on-the-job 

training highlights the special importance this type of 

education has for manufacturing workers, particularly 

those in jobs whose typical entry-level education is a 

high school diploma. The BLS classifications indicate 

that 73 percent of the manufacturing jobs necessitate 

either moderate-term on-the-job training (1 to 12 

months) and long-term on-the-job training (more than 

12 months), more than double the share for jobs in nonmanufacturing industries. The on-the-job training needs 

in manufacturing reflect in part the fact that a relatively 

high share (around 62 percent) of manufacturing jobs 

have a high school diploma as the entry requirement. 

Yet, even within occupations requiring a high school diploma, the ones that predominate in manufacturing are 

much more likely to provide on-the-job training. For 

more information see www.bls.gov/emp/

ep_education_tech.htm. 

14A basic comparison of CPS average hourly earnings 

estimates shows a raw manufacturing premium of 11.9 

percent in 2011, similar to the 13.8 percent raw premium derived from the NCS. 

15More specifically, the earnings regressions control for 

age (up to a fourth degree polynomial of age), gender, 

marital status, race and Hispanic origin, nativity and citizenship, educational attainment, metropolitan area, 

region, union representation, major industry, occupation, time, and manufacturing / non-manufacturing 

dummy interacted with time.

16Consistent with the earnings estimates by educational 

attainment shown in Figure 3, this wage premium estimate is for private wage and salary workers age 25 and 

over. The wage premium for workers age 16 and over 

was 7.3 percent in 2011.

17It does turn out, however, that the regression-adjusted 

earnings premiums for workers with specific levels of 

educational attainment are somewhat smaller than the 

raw premiums. These results highlight the value of regression adjustments, as raw comparisons cannot capture the differential effect that other factors may have 

on specific groups of workers. For example, unionization 

(defined as being a union member or covered by a union 

contract) has a positive association with earnings, but 

more so for workers with lower educational attainment.

18Krueger and Summers “Efficiency Wages and the InterIndustry Wage Structure,” 1988, 266-7.

19Because 2011 NIPA data on compensation by industry 

are not yet available, the 2010 ratios were applied to the 

2011 estimates of hourly earnings.

20Payments to defined-benefit pension plans are a relatively volatile component of overall employer contributions to benefits. The 2003 uptick in the manufacturing 

wage premium in Figure 7 and manufacturing benefit 

contributions per full-time-equivalent employee in Figure 5 reflect catch-up contributions to pension funds 

among a few large durable goods manufacturers.