the Nissan Effect?

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Published: February 9,2004

The number of manufacturing jobs in Mississippi is down, and manufacturing wages are up. But it isn`t because Nissan North America is paying higher than average wages.

“I don`t think we’re seeing a Nissan effect,” said state economist Phil Pepper. “Nissan is not having a big impact on the overall wage rate. But there are so many cross currents going on that it`s hard to make a concrete statement why the numbers are down but the wages are up.”

Higher paying industries saw the biggest growth in wage rates, said Pepper.

“Those jobs are more in demand and the price tag for wages has gone up over the last three years,” he said. “As a general rule, the lower paying jobs have seen less growth. But in some sectors, as jobs go overseas, the higher paying jobs in that industry are often left, so the average wages in that sector go up.”

Petroleum and coal products manufacturing is the state`s highest paying sector. An average weekly rate of $1,093 was reported in June 2003, a 5.3% increase from June 2001.

“That sector had a 6.4% increase in employment over that period of time, one of only two sectors reporting an increase in employment over that time,” said Pepper.

Paper manufacturing wages increased 6.8% from June 2001 to June 2003, yet employment declined more than 16% as several paper plants closed,

said Pepper.

“Then chemical manufacturing rounds out our top three leaders in average weekly wage increase,” he said. “The chemical manufacturing sector went up only 3.9% to $877 in June 2003, but total employment went down almost 11% between June 2001 and June 2003.”

During the recession of 2001, hours worked per week dropped off. Now hours worked per week are going back up, but the hourly weekly wage is reflecting the number of hours being paid in manufacturing sectors, said Pepper.

“It skews the numbers,” he said.

Between 2000 and 2001, the Mississippi Employment Security Commission`s (MESC) reporting system changed from the SIC code to the NAICS code, which meant that industries within each code were reclassified, making it difficult to track trends, said Pepper.

According to MESC, the manufacturing annual average total employment for 1999 was 243,900. By November 2003, the most recent reporting period, manufacturing jobs had declined to 178,800.

“The food and kindred products sector pays a fairly low wage, but those jobs aren`t going overseas because you can`t shift the poultry or catfish processing overseas. They’re staying here. Instead, we’re importing labor – mainly Mexicans – for a lot of those low-wage jobs.”

Even though NAFTA has been blamed for jobs moving offshore, technology is replacing some of those jobs, said Pepper.

“We talk about losing jobs to China too, but even though they’ve taken on a lot of our production, China has lost jobs,” he said. “I suspect that as we shut down plants here, we’re shipping equipment to China, so maybe they were making clothes by needle and thread 10 years ago, and now they’re making them with our machines and are much more productive.”

Jay Moon, president of the Mississippi Manufacturers Association, said many low wage jobs have been eliminated “and that process will continue.”

“Then the more competitive higher wage jobs left assume a higher percentage against the total percentage,” he said. “I also think that some manufacturers are waiting to see what`s going to happen in this market, whether we’re really in a recovery. Rather than hire more workers, they’re just extending the time they have their current employees work and paying them more to work longer.”

MESC spokesperson Jan Garrick said education is the primary problem in the manufacturing sector and throughout the workforce.

“The low-paying jobs are not coming back and those who held them are without the education to fill the higher paying jobs,” she said. “Only 20% of the Mississippi population has college degrees, and even worse, 26% of Mississippians aged 25 and older don`t even have a high school education or GED. This is at a time when 20% of Mississippi`s jobs require a college degree. Gov. Barbour has emphasized worker training and in some cases retraining. That training will be the key to allowing workers to hold better jobs, which pay more.”

Contact MBJ contributing writer Lynne W. Jeter at mbj@thewritingdesk.com.

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