Slow Recovery Of Construction, Mfg. Sectors Hurting Wage Growth

In December 2015, there were still 2.5 million fewer workers in construction and manufacturing than at the start of the Great Recession, accounting for more than three-fourths (77.3 percent) of total job losses since December 2007.

In this Friday, Sept. 18, 2015, photo, a worker carries a roll of sub flooring to be installed in a school bus on an assembly line at Blue Bird Corporation's manufacturing facility, in Fort Valley, Ga. The Institute for Supply Management, a trade group of purchasing managers, issues its index of manufacturing activity for December, on Monday, Jan. 4, 2016. (AP Photo/David Goldman)
In this Friday, Sept. 18, 2015, photo, a worker carries a roll of sub flooring to be installed in a school bus on an assembly line at Blue Bird Corporation's manufacturing facility, in Fort Valley, Ga. The Institute for Supply Management, a trade group of purchasing managers, issues its index of manufacturing activity for December, on Monday, Jan. 4, 2016. (AP Photo/David Goldman)

The economy has added nearly 5 million jobs in the private sector since the Great Recession began in December 2007, but construction and manufacturing—two key sectors that provide good jobs and high wages, particularly for workers without 4-year college degrees—continue to lag behind the recovery. In December 2015, there were still 2.5 million fewer workers in construction and manufacturing than at the start of the Great Recession, accounting for more than three-fourths (77.3 percent) of total job losses since December 2007.

Industries that have gained jobs since the beginning of the recession pay substantially less than construction and manufacturing industries. Hourly pay in job-gaining industries is $23.80 on average, versus $28.01 in construction and $28.71 in manufacturing. Total compensation (which includes both wages and all benefits) in job-gaining industries is $29.28, while compensation in construction and manufacturing is $36.87 and $37.24, respectively.

While the trend of wage stagnation is long standing and broad based, boosting job growth in industries that traditionally provide strong wages for the bottom 70 percent of working people would help a lot. For example, investments in infrastructure and policy action to stem rising trade deficits would do much to help the overall economy and restore jobs to two well-paying sectors that badly need them.

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