Wisconsin factory workers are getting raises, but working less

The average production worker in Wisconsin made $21.63 per hour in September, a $1.01 increase from the year before, according to data from the U.S. Bureau of Labor Statistics.

That 4.9% increase in wages was the 12^th strongest in the country for the month. Across the three months of the third quarter, Wisconsin production workers averaged a hourly pay increase of 5.8%, good for ninth in the country.

The higher hourly wages, however, are not necessarily translating to significantly larger paychecks.

Why?

Because production workers in the state are also logging fewer hours than they were at the same time last year. In September, the weekly average was 40.2 hours, down 1.8 hours from 2018.

Wisconsin’s average decline of 1.8 hours across all of the third quarter was the sixth largest decline in the country. The state has also averaged a year-over-year decline of 1.5 hours for all of 2019 and 1.4 hours for the last 12 months, the sixth and fifth largest declines respectively.

The two seemingly opposing data points fit with consistent comments from manufacturers.

Amid low unemployment, 3.2% in September, companies have regularly said they find it difficult to fill open positions. Many are also facing the pending retirement of long-tenured baby boomer employees and are working to hold on to the younger employees they are able to hire.

At the same time, measures of business activity in the manufacturing sector have been trending down this year.

The Milwaukee-area PMI in the Marquette-ISM Report on Manufacturing has been below 50 in four of the last five months. A reading below 50 indicates the sector is contracting.

Exports have also been down throughout the year amid trade tensions and slowing global growth. Through August, the state was on pace for a $1.2 billion decline in exports this year.

Including non-production workers, manufacturing employment in Wisconsin is also down 1.4% from September 2018, a drop of 6,800 to 471,000.

For Wisconsin, the result of strong hourly wage growth and decline in hours adds up to just a $3.49 increase in average weekly pay to $869.53, a 0.4% increase.

For the entire third quarter, Wisconsin’s average weekly pay for production workers was up 1.3%, the 29^th largest increase in the country.

Across the last 12 months, the average increase is 0.6%, 35^th in the country.