With metro Milwaukee unemployment at its lowest levels in at least two decades and as the region’s manufacturing industry continues to expand businesses are increasing the number of hours production workers are putting in to levels not seen in at least five years.
Production workers at metro Milwaukee manufacturing firms worked an average of 43.7 hours per week in September, the highest for any month since March 2013, according to data from the Bureau of Labor Statistics. The September figure represents an increase of 1.9 hours per week from the same time last year.
The availability of overtime has been a constant at Waukesha-based Alloy Products Corp. over the last two years. Betsy Bear Hoff, Alloy Products president, said the company has been offering 10 hours per day during the week, eight hours on Saturday and five hours on Sunday.
“People could get a lot of hours in,” she said.
Even with the addition of 12 new employees this year, the number of hours worked is still up significantly, Bear Hoff said. The company now has 70 employees on the union floor and 100 employees total.
While many manufacturers are turning to automation, Bear Hoff said adding technology is not always the answer for a company that does custom work or one or two of a particular product. Alloy Products makes pressure vessels for the pharmaceutical, semiconductor and chemical industries, along with other industrial and commercial markets.
“It’s not as easy as just automating it and letting a machine do it,” she said.
In the first nine months of the year, metro area production workers have averaged an increase of 1.45 hours per week from the same period last year. If the average increase holds over the final three months of the year, the region’s production workers would average nearly 43.2 hours per week for the year, a figure higher than any other year in data going back to 2001.
The increase is even more pronounced within durable goods manufacturing, which averaged 44.2 hours per week in September and has seen an increase of 1.5 hours per week on average this year.
Among the metro areas with available data, Milwaukee is experiencing the eighth largest average increase in hours this year. The Quad Cities area is up 4.6 hours on average to lead the way, followed by Las Vegas, Detroit, New York City, Dallas-Fort Worth, Tulsa and Houston.
As a state, Wisconsin is not seeing quite the same level of increase in hours worked. Production hours were actually down slightly in September and the state is averaging an increase of 0.8 per week for the year.
With so many extra hours being worked, manufacturers run the risk of burning out employees, especially when the increase is sustained for a long time.
“That’s primarily why we’ve cut some of the overtime,” said Wendy Raser, Alloy Products HR manager. “Even though the employees do like it, it’s just not healthy.”
Manufacturers in the region have said for years it is difficult for them to find enough employees, particularly for more skilled positions. Amanda Payne, Waukesha County Business Alliance vice president of public policy, said workforce issues remain the top concern for manufacturers.
“Our manufacturers are running overtime as much as possible just to get their jobs out the door,” said Payne, who also runs the WCBA Manufacturing Alliance group. “Even with all the overtime, the issue of workforce is restricting their ability to grow.”
The region’s manufacturing industry has seen sustained growth over the last few years. The Marquette-ISM Milwaukee-area PMI has not dipped below 50 since October 2016. A reading above 50 indicates expansion in the sector and just two of the last 12 months have been below 60.
At the same time, the unemployment rate in metro Milwaukee has been at levels not seen since the late 1990s over the last few months.
Production workers have also seen an uptick in wages in the metro area over the last two years. Average hourly wages increased an average of 2.8 percent in 2016 and pushed even higher in 2017, up an average of 11.4 percent. Wage growth has slowed somewhat this year, averaging an increase of 4.6 percent through September.
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