Hartford Business Journal

www.HartfordBusiness.com January 30, 2017 • Hartford Business Journal 5 REPORTER'S NOTEBOOK CT manufacturing wages shrink despite more jobs C o n n e c t i c u t 's m a n u f a c t u r i n g industry posted 1,000 new jobs in 2016, one of the first positive growth years the sec- tor has experienced since the 1980s. That was a bit of good news in a dis- appointing year for the state's economy, which saw overall employment decline by 2,000 jobs. But while manu- facturers are hiring they appear to be pay- ing new workers less. Connecticut man- ufacturing workers saw their average hourly wage in 2016 fall 8.2 percent to $24.90 from $27.13 in Dec. 2015. Conversely, the rest of the state's private sector received a modest 2.65 percent pay raise, recording average hourly earnings of $30.59 in December, up from $29.80 a year earlier, according to the state Depart- ment of Labor's recent labor market report. The wage dichot- omy between pro- duction hands and the rest of the private sector has some econ- omists scratching their heads, especial- ly as manufacturers — including higher- paying companies like Electric Boat and Pratt & Whitney — are adding to their workforce. The most logi- cal explanation, economists say, is that shrinking wages are a result of shifting workforce demographics. "We know that average ages in the manufacturing workforce are con- siderably higher than in the overall state workforce," said Andy Condon, director of the research office within the state Department of Labor. "My interpreta- tion of these numbers is that we are seeing the beginning of a demographic shift of long-term experienced, high-paid workers retiring and being replaced by newer, lower-paid workers." UConn economist Fred Carstensen said he agrees with Condon's analysis. The mod- est expansion in manufacturing employment is bringing in younger workers, he said, and "in many unionized areas the newer contracts have a lower [pay] scale for entering workers than in the past." This trend could last for awhile as Connecticut's aging workforce heads toward retirement over the next decade or so, Condon said. What's less clear is how the shrinking wages will impact the broader econo- my, including income tax receipts, which are a major driver of the state budget. As higher-paid workers leave the workforce they will have less spend- ing power, but new hires will likely see a boost to their household income. "It is a trend worth watching closely," Carstensen said. "The good news is that jobs are being added in the sector; the bad news is that it is not enough to offset the broad weakness in job creation in Connecticut." – Greg Bordonaro CT Private Industry Employee Hours & Wages Dec. Dec. Dec. 2016 2015 2014 Average Weekly Hours 33.7 33.6 33.8 Average Hourly Earnings $30.59 $29.80 $28.47 CT Manufacturing Employee Hours & Wages Dec. Dec. Dec. 2016 2015 2014 Average Weekly Hours 43.8 42.5 40.9 Average Hourly Earnings $24.90 $27.13 $24.00 S O U R C E : C T D E P A R T M E N T O F L A B O R A Pratt & Whitney assembler in Middletown works on an engine. PDS has been meeting the needs of the construction industry since 1965. Our dedicated team of design and construction professionals welcomes the challenge of serving its past and future customers on their most demanding projects. Valenti Cadillac | Hartford, Connecticut This project was a renovated Cadillac dealership which includes specialty finishes, high speed doors, custom millwork and was completed on time and within budget. The project was also completed as Construction Manager. Total Project Size: 10,000 SF 107 Old Windsor Road, Bloomfield, CT 06002 (860) 242-8586 | Fax (860) 242-8587 www.pdsec.com DESIGN BUILDERS • GENERAL CONTRACTORS • CONSTRUCTION MANAGERS SPOTLIGHT ON: Automotive PDS ENGINEERING & CONSTRUCTION, INC. THINK • PLAN • BUILD www.connstep.org/workforce Your fi rst step to better business. Session 1: Succession Planning 8:30 a.m. - 9:30 a.m. Session 2: Attracting & Retaining Valuable Employees 10:00 a.m. - 11:00 a.m. WORKFORCE TALENT STRATEGIES February 8, 2017 Radisson Hotel Cromwell $15 for one session, $25 for both sessions REGISTER TODAY AT: If You Build It, They Will Come (And Stay) Experienced manufacturing employ- ees are a prized asset. Providing a desirable workplace environment and involving them in the business ensures continuity in key positions. Learn how you can keep your orga- nization moving forward with your greatest asset: employees. Attend one of both of these informative sessions: Presenter: Kelly McDaniel President, Delisa Group For Manufacturers Only P H O T O | U N I T E D T E C H N O L O G I E S C O R P O R A T I O N — P R A T T & W H I T N E Y D I V I S I O N ▶ ▶ ' My interpretation of these numbers is that we are seeing the beginning of a demographic shift of long-term experienced, high-paid workers retiring and being replaced by newer, lower-paid workers.' Andy Condon, director of the research office within the state Department of Labor

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