A publication of the Indiana Business Research Center at IU's Kelley School of Business
Share | |

Autoworker Re-Employment in Indiana, Michigan and Ohio

The auto industry has experienced significant change and reorganization, with the workforce absorbing much of the change through displacement and shifting migration patterns of employees. This article examines a cohort of workers across Indiana, Michigan and Ohio in the transportation equipment manufacturing (TEM) sector from the first quarter of 2005 to 2010.

Of particular interest to the study was whether these workers remained in the TEM industry, and whether they stayed with the same employer or a different employer within the TEM realm. Finally, comparable wages (inflation-adjusted) were examined for these workers over the time interval.

The Indiana Department of Workforce Development, the Michigan Department of Technology, Management and Budget, and the Ohio Department of Job and Family Services provided data for this research.1

Employment Findings by Three-Digit NAICS

There were 354,915 autoworkers in the first quarter of 2005 for which wage records could be obtained five years later (2010). Table 1 provides a listing of the top 15 industries by three-digit NAICS code where these workers were employed. Due to compiling issues with the data, it was not possible to assess the number of employees for which no wage records existed due to those leaving the state, retiring or having not found employment.

Table 1: Where TEM Workers in 2005 Were Employed in 2010

NAICS Title Count Percent
336 Transportation Equipment Manufacturing 252,299 71.1%
561 Administrative and Support Services 14,676 4.1%
541 Professional, Scientific, and Technical Services 6,730 1.9%
423 Merchant Wholesalers, Durable Goods 5,010 1.4%
326 Plastics and Rubber Products Manufacturing 5,000 1.4%
332 Fabricated Metal Product Manufacturing 4,814 1.4%
333 Machinery Manufacturing 4,365 1.2%
611 Educational Services 3,755 1.1%
722 Food Services and Drinking Places 2,913 0.8%
452 General Merchandise Stores 2,842 0.8%
623 Nursing and Residential Care Facilities 2,455 0.7%
311 Food Manufacturing 2,303 0.6%
622 Hospitals 2,145 0.6%
238 Specialty Trade Contractors 2,076 0.6%
621 Ambulatory Health Care Services 2,002 0.6%

Source: Indiana Department of Workforce Development

Of the pool of 2005 TEM autoworkers remaining in their respective states and for whom a wage record could be matched, 71 percent were still employed within TEM in 2010.

The next largest industry for the 2005 cohort of TEM autoworkers employed in 2010 was in administrative and support services, which employed 4.1 percent of these autoworkers. Over three-quarters of the people employed in this industry were found in employment services, which includes employment placement agencies, temporary help services and professional employer organizations. The manufacturing sector, including TEM, makes extensive use of temporary and leased employees. The implication is that some of these workers may be doing similar work but on a temporary basis.

A Closer Look at Transportation Equipment Manufacturing

Table 2 shows a four-digit breakout of workers remaining in the TEM industry. The total from TEM sub-sectors does not sum exactly to the three-digit sector total in Table 1. The discrepancy is due to re-coding and classification issues which became apparent in combining the data.

Table 2: TEM Sub-Sectors Where TEM Workers in 2005 Were Employed in 2010

NAICS Title
Number Percent
3361 Motor Vehicle Manufacturing 122,260 50.2%
3362 Motor Vehicle Body and Trailer Manufacturing 22,345 9.2%
3363 Motor Vehicle Parts Manufacturing 97,893 40.2%
3364 Aerospace Product and Parts Manufacturing 695 0.3%
3365 Railroad Rolling Stock Manufacturing 4 0.0%
3366 Ship and Boat Building 110 0.0%
3369 Other Transportation Equipment Manufacturing 245 0.1%
Total   243,552 100.0%

Note: The totals in this table do not exactly match the totals in Table 1 due to coding and classification issues.
Source: Indiana Department of Workforce Development

Of the workers from the original 2005 autoworkers cohort who were also employed in the TEM industry in 2010, 99.6 percent of these workers were concentrated in some aspect of motor vehicle manufacturing. Minor movements to other sub-sectors of the industry were observed, but those specialized industries did not appear to offer significant re-employment opportunities for ex-autoworkers.2

How Many Workers Switched Employers?

Of the workers for whom wage records were available, Table 3 illustrates where these workers re-emerged in 2010 with respect to their 2005 employer.

Table 3: Outcomes of TEM Worker Migration, 2005 to 2010

Migration Outcome
Number Percent
Same Employer 137,086 37.8%
Same Employer, Industry Change* 4,084 1.1%
New Employer, TEM** 105,108 29.0%
New Employer, not TEM** 116,147 32.0%
Total 362,425 100.0%

* Four-digit industry segment
** Within three-digit industry subsector 336
Source: Indiana Department of Workforce Development

Of the original workers with wage records, 39 percent remained with the same employer. One percent of those original 2005 workers remained with the same employer but the company was now classified outside of TEM. Another 29 percent of the workers remained within TEM, but with a different employer. Finally, 32.1 percent found employment with other employers outside TEM industries.3

Wage Findings by Three-Digit NAICS

The wage comparison utilized wages for autoworkers, using the same scope definition as above, averaged and then annualized for the second and third quarters of 2005.4 These 2005 average wages were adjusted for inflation to permit comparison to 2010 wages. Matches to 2010 wage records underwent a similar process of averaging and annualization. The criteria for determining the dominant employer was the same as for the employment analysis. Industry assignments were based on the dominant employer for the two-quarter time frame of the years in question, based on the wage earned while working for those employers.

Average wages were computed as a simple average of the three states’ data. Consideration was given to employing a weighted average, but this option provided over-consideration of one state versus the other two and skewed the results. Additionally, using a weighted average measure would require coupling wage and employment data which proved problematic. Given the concern with the data, and the results being skewed one direction, a simple average was preferable.

Table 4 compares the three-state average wages across time for the five years using the top 15 migration industries of TEM workers presented in Table 1. Average wages of actual employees in the industries were calculated and compared. It should be noted that the wages do not account for the hours of employment. A drop in earnings can be either the result of pay decrease (worker concessions or a decrease in pay level) or a decrease in the hours of employment. For those industries experiencing significant decreases, the use of temporary or part-time employment should first be considered as a rationale.

Table 4: Three-State Average Wages for Top TEM Worker Migration Industries, 2005 to 2010

NAICS NAICS Title  New Industry 2005 Three-State Average TEM Wage 2010 Three-State Average New Wage Percent Change
336 Transportation Equipment Manufacturing $61,067 $65,443 7.2%
561 Administrative and Support Services $36,416 $23,782 -34.7%
541 Professional, Scientific, and Technical Services $59,739 $53,590 -10.3%
423 Merchant Wholesalers, Durable Goods $56,665 $58,920 4.0%
326 Plastics and Rubber Products Manufacturing $34,460 $39,004 13.2%
332 Fabricated Metal Product Manufacturing $43,849 $47,687 8.8%
333 Machinery Manufacturing $48,820 $49,338 1.1%
611 Educational Services $46,785 $21,931 -53.1%
722 Food Services and Drinking Places $27,766 $13,870 -50.0%
452 General Merchandise Stores $33,619 $16,546 -50.8%
623 Nursing and Residential Care Facilities $30,355 $26,086 -14.1%
311 Food Manufacturing $37,039 $38,078 2.8%
622 Hospitals $39,655 $29,766 -24.9%
238 Specialty Trade Contractors $40,893 $34,122 -16.6%
621 Ambulatory Health Care Services $37,752 $23,667 -37.3%

Source: Indiana Department of Workforce Development

Wages within the Transportation Equipment Manufacturing Industry

Table 5 shows a four-digit breakout of worker wages for those remaining in the TEM industry.

Table 5: Average Annual wage Comparison, 2005 Q2 to 2010 Q2 to Q3

Code NAICS Title 2005
Three-State Average
2010
Three-State Average
Percentage Change
3361 Motor Vehicle Manufacturing $79,096 $76,034 -3.9%
3362 Motor Vehicle Body and Trailer Manufacturing $48,902 $51,941 6.2%
3363 Motor Vehicle Parts Manufacturing $53,206 $55,847 5.0%
3364 Aerospace Product and Parts Manufacturing $54,882 $58,489 6.6%
3365 Railroad Rolling Stock Manufacturing $14,623 $14,620 -0.0%
3366 Ship and Boat Building $23,928 $35,500 48.4%
3369 Other Transportation Equipment Manufacturing $46,627 $50,693 8.7%

Source: Indiana Department of Workforce Development

Of the TEM sub-sectors, only motor vehicle (3361) and railroad (3365) manufacturing witnessed slight declines. The other subsectors showed modest increases over the five years.

Conclusion

The results suggest that workers able to remain in TEM industries accommodated only modest adjustments to wages. The largest adjustment was shouldered by those unable to find work or those finding employment outside the TEM sector. Further work on those for which wage records are not found would significantly add to the analysis.

This analysis was part of the Driving Workforce Change project collaboration of Indiana, Michigan and Ohio funded through a grant from the U.S. Department of Labor's Employment & Training Administration. For information on that project, visit the website at www.drivingworkforcechange.org.

Notes

  1. An initial cohort of autoworkers was established by extracting wage records from the first quarter of 2005 for employers in the following NAICS industry sectors: 3361 (motor vehicle manufacturing), 3362 (motor vehicle body and trailer manufacturing) and 3363 (motor vehicle parts manufacturing). Ohio used an average of second and third quarters to determine autoworker counts, and it is assumed this is a proxy for first quarter. Some of these workers were employed in more than one four-digit NAICS industry during the base reference quarter in 2005. In that event, the NAICS was assigned on the basis of the wage record with the greatest wage. Once this initial cohort of workers was established, the wage records were matched against all employer wage records for the first quarter of 2010. Again, some multiples matches for the same worker were discovered, and the employer record with the highest wage was used to determine the worker's 2010 industry employment. Efforts were taken to seamlessly combine the states. However, some of the collection methods and reporting standards between states differed. Rather than potentially corrupt the results, the non-matching data were discarded in the combined report. These efforts resulted in only a few minor discrepancies which should not deflect from the analysis.
  2. There is a slight discrepancy between the three-digit count of TEM workers in Table 1 and the sum of four-digit sub-categories within TEM across the three states. The discrepancy is due to coding and classification issues which became apparent in combining the data. The difference is relatively minor and does not significantly alter the results.
  3. The four-digit sum of the category is slightly different from the three-digit total. Therefore the percentage of TEM workers in Table 1 is slightly different from the percentage sum of TEM workers in Table 3.
  4. Second and third quarter wages are generally considered less volatile than either first or fourth quarter wages due to the timing of annual bonuses.

Timothy E. Zimmer, Ph.D.
Manager, Research and Analysis Division of the Indiana Department of Workforce Development

Vicki Seegert
Federal Studies Manager, Indiana Department of Workforce Development

Debra A. Guzman, M.A.
Economic Analyst, Indiana Department of Workforce Development