Shift work pay differentials and practices in manufacturing

Monthly Labor Review, Dec, 1985 by Harry B. Williams

About one-fourth of the production workers in metropolitan area factories worked on late shifts in the early 1980's--a proportion that has remained fairly stable over the past two decades. The incidence of late-shift work, however varies greatly among manufacturing industries, ranging from less than 5 percent of the production work force in such labor intensive industries as apparel and wood furniture to approximately one-half in more capital intensive industries such as cotton and manmade textiles, cigarettes, and glass containers.

In 1984, at least nine-tenths of the late-shift workers in urban factories received premiums over the pay rates of their day-shift counterparts. Most commonly, the differential was a cents-per-hour addition to day-shifts rates, averaging 23.2 cents for work on the second shift and 29.9 cents for work on the third shift. For those cases in which there were percentage differentials, the average was 7.3 percent of day rates for the second shift and 10.0 percent for the third. Among individual industries surveyed between May 1978 and October 1984, types and amounts of differentials varied widely. For second shifts, cents-per-hour differentials commonly averaged between 10 and 20 cents; percentage premiums, usually between 5 and 10 percent. Similar ranges for third shifts were 15 to 25 cents per hour and 5 to 10 percent. Differentials expressed in cents-per-hour have been programs. Both surveys report occupational wage rates and the incidence of selected employee benefits and establishments practices, including late-shift provisions and practices.

Area wage surveys are conducted annually in a sample of 70 Standard Metropolitan Statistical Area (SMSA'S). Although the emphasis is on occupational pay and benefits found in individual areas, results of the 70 area surveys are combined, with appropriate weighting, to represent all SMSA'S in the United States (excluding Alaska and Hawaii). As of July 1984, factories within scope of the wage survey program employed three-fifths of the Nation's 13 million manufacturing production workers.

Twenty-five industry wage surveys are conducted in the manufacturing sector and 15 in nonmanufacturing, generally on a 3- or 5-year cycle. The most recent industry surveys used in this analysis--which is limited to the manufacturing sector--span th period between October 1979 and October 1984 which included both upswings and downturns in the economy. They covered industries employing about one-fifth of all manufacturing production workers in 1984.

Late-shift operations

Late-shift operations in manufacturing are primarily a product of economic and technological developments associated with factory production. Increasing ratios of capital investment to labor costs provide an incentive for maximum use of plant nd equipment. Furthermore, continuous process industries, like basic steel, require round-the-clock operations to avoid high start-up and shut-down costs. Lower rates charged by electric utilities for night usage may provide another incentive for customers to add shift work. Still another factor may be the need for temporary night workers to meet unanticipated or seasonal increases in the demand for a factory's output.

Establishments operating at night may use either a second shift only or both second and third shifts to supplement thier daytime hours. The second (evening) shift generally ends at or near midnight, while the third (night) shift begins at this time. Arrangement is thus commonly made for three 8-hour shifts in a 24-hour period. Individual employees may regularly work on the same shift or may alternate among shifts. The various possibilities are described in a glossary of shift terms.

Incidence of late-shift work

Workers on late shifts accounted for 24.9 percent of the 6 million production and related workers employed in metropolitan area factories in 1987. (See table 1.) This compares with 22.8 percent of 7 million workers in 1959-60, the earliest period for which such data are available. In 1984, 17.7 percent of the factory production workers were on second shifts and 7.2 percent were on third shfts.

The incidence of late shifts among metropolitan areas varied, in part, because of differences in industry mix within individual localities. In the Miami area, for example, where there is a high share of apparel industries, the relatively low proportions of late-shift workers--7.9 percent on second shifts and 2.5 percent on third shifts in 1984--reflect the influence of the apparel industries, which do not typically operate late shifts. In Green Bay, however where there is round-the-clock pulp and paper manufacturing, second shifts accounted for 25.3 percent of the manufacturing production workers and third shifts, for 15.3 percent.

The incidence of late shifts is generally highest in industries that are capital intensive, including those having continuous process operations. (See examples from the Bureau's industry wage survey program shown in table 2.) The highest proportions of workers on late shifts are in cotton and manmade textile (51.5 percent), cigarette (51 percent), and glass container industries (50 percent) which are all capital intensive. Late shifts accounted for between 40 and 50 percent of the workers in a number of other industries, including those with continuous process operations (basic steel; pulp, paper, and paperboard; blended and prepared flour; and wet corn milling), and those with relatively high ratios of capital investment to wages (other pressed or blowm glass, and textile dyeing and finishing). Industrial chemicals, petroleum refining, and shipbuilding each employed about a third of their workers on late shifts. The lowest incidence--less than 3 percent of the workers--was found in the labor intensive apparel, footwear, and furniture industries.