MFG jobs build wealth. They may also drive wages higher and ease the growing income gap.

By Bart Taylor | Aug 22, 2013

Is a job a job?

Statistics like the unemployment rate suggest it is, but of course they’re not. Pay is the most obvious differentiator. I’m no economist but it’s also easy to make the case MFG jobs, jobs that produce goods and services, are fundamentally different and critical to a sustained, boom-and-bust-proof economy we seek in our region.

MFG jobs are ‘primary’ jobs; they create wealth here as money and capital flow back to the region from sale of manufactured products - and through the ‘indirect’ jobs they create in retail, supplies, professional services, etc.

They may also be an important catalyst to reversing a decades-long trend that continues to be a drag on the economy. Against the backdrop of growing wage inequality, enough new MFG jobs - a higher percentage of total employment - could drive average wages up.

2011 Annual Wages by Sector Colorado

Management of Companies and Enterprises $130,515
Mining 104,898
Utilities 88,322
Information 84,138
Finance and Insurance 74,312
Wholesale trade 71,428
Manufacturing 61,668
Construction 48,865
Government 48,082
Health Care and Social Assistance 44,852
Real Estate Rental and Leasing 43,918
Transportation and Warehousing 43,761
Education Services 37,978
Administrative and Waste Services 37,704
Arts, Entertainment and Recreation 30,734
Retail Trade 27,113
Accommodation and Food Services 18,042
All Industries 49,043
Source: Bureau of Labor Statistics, Census of Employment and wages

Can average wages grow significantly without new primary jobs in the mix? Of course. And many Colorado manufacturers don’t need higher-skilled manufacturing labor that seems short in supply.

But Colorado business has carved out significant leads in growing MFG sectors. The region is poised to build on the successes of what are now internationally known brands. Demand for manufacturing labor seems to be increasing. Employers I know can’t find enough qualified labor. Wages in MFG should rise as a result.

Not all is rosy on the wage front. As the Wall St. Journal reported last year manufacturing wages haven’t kept pace with inflation, or with rapidly rising productivity gains. Yet this in turn has made the United States more competitive on the international manufacturing stage, as wages in China and elsewhere are rising.

The opportunity means little if communities won’t develop and support MFG businesses and train a new qualified workforce equal to the advanced technical requirements of today’s maker companies. ‘Making Colorado’, Gov. Hickenlooper’s rebranding effort for the state, is a good start. But the marketing emphasis on ‘making’ is oddly misaligned with the Office of Economic Development and International Trade's industry sector breakdown, where ‘Advanced Manufacturing’ is a catch-all for all manufacturing in the state. Or not. Frankly I’m not sure.

But if we’re successful developing a new generation of ‘primary’ employers, we’ll build more wealth and begin to reverse a widening income inequality gap, an economic headwind to be sure.

More on jobs and training in this issue - and next week.