Articles
Texas ranks 8th nationally in average manufacturing wages. Here’s why that number is changing fast (and how Houston’s manufacturing industry mix impacts labor costs)
Rising wages are today a magnet for America’s new manufacturing workforce, up 26% the past 10 years to a 50-state average of $85,507 per year.*
Higher labor costs can also be an impediment to growth. Ask owners and operators in California, where manufacturing employees earn an average annual income of $122,872 – tops in the US – and $251,872 for workers in Computer & Electronics Product manufacturing.
It puts a fine point on why Utah has benefitted from an influx of California companies, where today average manufacturing annual wages are $75,545. It’s one reason that today Utah leads the nation in per-capita manufacturing employment growth (~12% year-over-year).
For its part, Texas ranks 8th nationally in average annual manufacturing wages, at $94,449, arguably on the verge of becoming a high-cost labor state. The company it keeps in the top 10 have a reputation for being higher-cost states to do business:
-
California | $122,738
-
Massachusetts | $105,685
-
Connecticut | $100,745
-
Maryland | $99,752
-
New Jersey | $99,557
-
Washington | $99,683
-
Arizona | $98,988
-
Texas | $94,449
-
Louisiana | $92,085
-
Oregon | $90,366
But if overall cost-of-living including weighs on average manufacturing salaries, so too does the manufacturing industry mix in each state.
It’s why Texas is poised to move up the ranking, even as Houston’s average wages will keep it closer to the mean. Not because Houston doesn’t flash high-wage industries: its robust Petroleum and Chemical Manufacturing industries command salaries that on average, are 35% or so higher than the all-manufacturing average ($135,000 - $166,000, annually). But as we also outlined, Houston’s leading manufacturing industry, Fabricated Metal Manufacturing (~53,000 employees), pays a more modest average wage – $79,220.
The industry ‘cocktail’ fueling growth in Texas and elsewhere is a mix of technology-informed advanced manufacturing, with higher labor costs. Texas already ranks in the top 10 in average wages in the five ‘advanced manufacturing’ industries – most with higher annual wages than the current Texas average:
Texas Manufacturing Industry Wages
- Fabricated Metal Product Manufacturing > $79,220 Avg. Wage > 7th highest nationally
- Machinery Manufacturing > $99,444 Avg. Wage > 6th nationally
- Computer and Electronic Product Manufacturing > $157,628 Avg. Wage > 4th nationally
- Electrical Equipment, Appliance, and Component Manufacturing > $97,060 Avg. Wage > 8th nationally
- Transportation Equipment Manufacturing > $103,542 Avg. Wage > 9th nationally
(Note: Transportation Equipment Manufacturing includes the automotive and aerospace supply chains.)
Email me for more data and other takeaways.
Bart Taylor is executive director of the Greater Houston Manufacturers Association. Reach him at [email protected].
*Source: all data from Quarterly Census of Employment and Wages, 2014- 2024/Bureau of Labor Statistics. Special thanks to Brian Lewandowski, at the Leeds School of Business at the University of Colorado, for the lift on providing the raw data.
