From the mid-1970s until shortly before the Great Recession, it really paid to be a factory worker in America. Specifically, manufacturing workers earned more per hour, on average, than workers across the private sector at large.
That’s what you see in this chart -- the blue line is manufacturing wages, and the gap between it and the red line, which represents wages in the private sector at large, is what we call the “wage premium” that factory workers enjoyed. That premium was one of the big reasons factory jobs were for so long such a reliable ticket to the middle class in this country.
Notice that the premium disappears around 2007. Today the premium has gone negative. Here’s part of the explanation for why that is: The factory sector has been almost entirely de-unionized.
This is factory employment since 1977, for non-union workers and for workers in or covered by a union. Non-union employment grew, fell and is growing again post-recession (as I document in the Post today.) The net result is that there are about as many non-union factory workers today as there were in 1977. Meanwhile, about 80 percent of union factory jobs have disappeared.
That shift matters for the wage premium, because union factory workers earn consistently higher wages than their non-union counterparts. This chart of Labor Department data shows a persisting union wage advantage over the past decade; it was about a 7 percent difference in 2011. But the fewer union jobs exist, the fewer workers earn those higher salaries, and the more manufacturing employs lower-paid non-union workers.