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Factory Wages: The Mean is Not the Average

NELP Emphasizes Auto Parts Production
Image Credit: Steve Jurvetson

The National Employment Law Project’s (NELP) study about American factories contains conclusions that equate the state of the auto parts industry with U.S. manufacturing as a whole. In philosophy, confusing the part with the whole is known as the fallacy of composition. On the factory floor, finding a bad part in a big batch is known as quality assurance. So is the NELP study flawed, or is it a fine example of QA?
In a preview of the NELP report, the New York Times (NYT) published Falling Wages at Factories Squeeze the Middle Class in its Business Day section. NYT writers Nelson D. Schwartz and Patricia Cohen told the stories of workers at auto parts factories in Ohio and Mississippi, and reported that “median wages for parts workers fell to $15.83 an hour from $18.35” between 2003 and 2013.
Automotive is the nation’s largest manufacturing sector, and jobs in parts production outnumber assembly line work by almost 3 to 1. Yet that’s only part of the statistical story. As the National Association of Manufacturers (NAM) reports in Facts About Manufacturing, the average U.S. manufacturing worker earned $77,506 in 2013, including pay and benefits. In all other industries, the average worker earned $62,546.
Aside from NELP’s emphasis on auto parts, what else explains the difference between the two studies? NAM uses the average, a mathematical term that refers to the statistical norm. By contrast, the NELP study uses the median, the middle point of the data set. Both numbers are statistically correct then, but reporters seem unlikely to make this distinction when writing about manufacturing for general audiences.
Will factory work of the future provide “a ticket to the middle class”, as the NYT article also asks? Lawrence Katz, a professor of economics at Harvard, answers that “there are many manufacturing jobs that are high-paying, but they tend to be more senior or require a lot more education than many entry-level jobs do.” As the Baby Boomer generation retires then, training younger workers becomes especially important.
See original story: Falling Wages at Factories Squeeze the Middle Class
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