Manufacturing Jobs: Are They Special? | NPR Planet Money
- Is the focus on manufacturing jobs driven by nostalgia or sound economic strategy?
- Economists have long debated the true value of manufacturing, particularly whether it offers unique benefits to workers and the economy.
- This analysis explores the "manufacturing premium"—the idea that manufacturing jobs pay more than comparable jobs in other sectors.
U.S. Manufacturing Jobs: Do They Really Pay More?
Updated May 27, 2025
The push to revitalize U.S. manufacturing has become a bipartisan priority. But what makes manufacturing so
special? Is the focus on manufacturing jobs driven by nostalgia or sound economic strategy?
Economists have long debated the true value of manufacturing, particularly whether it offers unique benefits
to workers and the economy. Despite skepticism about the potential for a large-scale return of manufacturing
jobs, understanding its intrinsic value remains crucial.
This analysis explores the “manufacturing premium”—the idea that manufacturing jobs pay more than comparable
jobs in other sectors. Harvard economist Gordon Hanson, who has extensively researched American manufacturing,
asserts that manufacturing stands out due to its higher earnings, especially for workers without a college
degree.
While some studies suggest this premium has declined, Hanson and others point to compelling evidence that it
persists. A recent study by economists David Card, Jesse Rothstein, and Moises Yi, considered a “gold
standard” in the field, supports this view. Card won the 2021 Nobel Memorial Prize in Economic sciences.
The study tracked over 100 million American workers as they moved between industries. This approach allowed
researchers to control for factors like age, education, and experience, as well as less tangible qualities
like work ethic and skills.
By tracking workers across different sectors, economists can isolate the specific impact of working in a
particular industry on a worker’s income. This helps determine how ”special” an industry truly is in terms
of compensation.
Compared to the restaurant industry, which has the lowest average earnings, the study found that workers who
switch to manufacturing experience a significant pay increase. This premium represents the potential earnings
boost from moving to a new sector without additional education or training.
The Manufacturing Premium Compared
The economists calculated that moving from restaurant work to manufacturing results in an average 35% pay
increase. This “manufacturing premium” exceeds that of retail (11%), education (