The latest U.S. government report on the nation’s employment picture (for August) produced unusually mixed jobs results. (See, e.g., this report.) Maybe that’s why analysts seem to have missed one of its more encouraging takeaways: Hourly wages in the manufacturing sector, which have remained weak throughout the current economic expansion and into the Trump era, have picked up notably so far this year.
Yet the new data also make clear that, when it comes to the gap between U.S. blue-collar workers’ in the private sector overall and those of their better paid white-collar counterparts, the former have lost some ground under the Trump administration, even though their hourly wages are up in absolute terms.
So for a President who’s going to run for reelection largely as a populist champion of forgotten Americans, the August results were unusually mixed as well.
That manufacturing-specific pickup has taken place in pre-inflation wages, and we won’t get the latest constant dollar figures until this coming Thursday. But the progress before adjusting for price changes (and don’t forget – inflation has been awfully low lately) has been so notable that, for now, manufacturing wages’ performance is no longer worsening in comparison with the trends in the overall private sector. Indeed, the gap has narrowed a smidge.
Chiefly, from this January through August, current dollar manufacturing wages are up 2.09 percent. That’s the best such increase since 2008 (2.44 percent) – when the economy was still mired in recession, and employers’ tendency to jettison less experienced and thus more poorly paid workers produced a statistical wage increase for the remaining manufacturing workforce.
Moreover, this improvement was slightly faster than the two percent rise achieved by the private sector overall – also the best such performance since 2008 (2.36 percent). (This Labor Department wage series only goes back to 2006.)
The story is similar for blue-collar workers in both manufacturing and the private sector overall. (Data for these wages in the overall private sector goes back all the way to 1964 and for manufacturing to 1939.) For blue-collar manufacturing workers (called “production and nonsupervisory employees” by the Labor Department), January-through-August pre-inflation hourly pay is up 1.74 percent. That’s of course less than for the manufacturing workforce as a whole, but it’s the best such number since 2016 (1.98 percent) and, perhaps more important, the second best since 2006.
For the overall private sector, current-dollar blue-collar wages have advanced by 2.08 percent between January and August of this year. That’s their best such performance since 2008’s 2.48 percent.
As a result, from the beginning of the current economic recovery (mid-2009) this August, overall pre-inflation private sector wages had risen 1.2906 times faster than comparable hourly pay in manufacturing. That’s ever-so-slightly slower (but still slower) than the ratio through last August (1.294 times faster).
Manufacturing’s relative improvement was greater for blue-collar workers. From the mid-2009 beginning of the current economic recovery through this August, private sector nonsupervisory etc current dollar hourly wages have risen 1.2131 times faster than blue-collar manufacturing wages. That’s a smaller gap than the 1.228:1 ratio from the recovery onset through last August.
Nonetheless, the data show that, after narrowing slightly under former President Obama, the pre-inflation hourly wage difference between blue-collar and white-collar workers overall has been growing slightly again under President Trump.
When the recovery began, in mid-2009, private sector production and non-supervisory workers’ hourly wages were 83.83 percent of the wages earned private sector workers overall. By January, 2017 – the last Obama month in office, this figure had grown to 83.99 percent. As of this August, however, it’s back down to 83.92 percent.
Interestingly, the Trump record looks better when only the manufacturing trends are examined. In mid-2009, blue-collar manufacturing wages stood at 78.93 percent of manufacturing wages overall before inflation. By January, 2017, the share had dipped to 78.25 percent. The latest statistics show that it’s grown to 79.88 percent.
None of these changes is anywhere close to dramatic – a timely reminder, as a presidential campaign year rapidly approaches, that the U.S. economy really is akin to a supertanker, and barring sudden catastrophes or windfalls, typically takes a frustratingly long time to turn significantly.