Foundry wages advance as employment retreats.

Production and related workers in iron and steel foundries averaged $9.53 an hour in October 1986, according to a study by the Bureau of Labor Statistics. The October 1986 average was 33 percent higher than the $7.16 average hourly wage recorded by a September 1979 survey. This average annual increase of 4.2 percent compares with an increase of 5.9 percent per year in the Bureau's Employment Cost Index for durable goods manufacturing industries over the same period. Cost-of-living pay adjustments, based on the Consumer Price Index, were received by about 25 percent of the foundry workers.

As pay levels rose, production employment in the industry fell by more than 50 percent between September 1979 and October 1986. Increased foreign competition and weak domestic demand contributed heavily to cutbacks in the work force, though the impact varied by industry branch.

Nationwide averages for production workers were usually higher in firms that had labor-management contracts, or were larger in size (250 workers or more), or in captive foundries.3 This pattern varied, however, among industry branches. For example, in the gray iron pipe and fittings foundries, these pay advantages were reversed-average earnings were higher in firms that were nonunion, smaller in size (20-249 workers), or in commercial foundries.

Regionally, October 1986 pay levels in the industry varied considerably, ranging from $7.75 an hour in the Southeast to $11 an hour in the Great Lakes -the largest center of foundry employment. Averages in most other regions fell between $8 and $9 an hour.

Among the four industry branches studied separately, nationwide average hourly wages were $8.50 for steel foundries, $8.77 for gray iron pipe and fittings foundries, $10.04 for gray iron foundries, except pipe and fittings, and $10.83 for malleable iron foundries (table 1). While the overall pay level rose 4.2 percent per year from 1979 to 1986, average annual gains among industry branches ranged from 2.8 percent in steel foundries to 5.6 percent in gray iron pipe and fittings foundries.

Pay averages for industry branches were heavily influenced by the regional distribution of workers. For example, the Southeast, a relatively low-paying region, accounted for one-half of the workers in gray iron pipe and fittings foundries. On the other hand, the Great Lakes, a relatively high-paying region, accounted for three-fifths of the work force in gray iron foundries, except pipe and fittings, and four-fifths of the workers in malleable iron foundries.

The 42 occupations surveyed accounted for two-thirds of the production force. Among these, pay levels ranged from $12.98 an hour for metal patternmakers to $7.54 for guards (table 1). Chippers and grinders, the largest occupational group studied, averaged $9.07 an hour. Most of the remaining occupations had average wages between $8 and $10 an hour.

Nationwide, 15 percent of the foundry workers received incentive wages, usually on a piecework basis. Wages for incentive workers typically were 15 to 25 percent higher than the wages of their time-rated counterparts, who usually were paid under formal systems providing single rates for specified occupations.

At the time of the survey, foundries typically scheduled their production staff to work 40 hours per week. Onefifth of the workers were employed on second shifts and one-eighth on third shifts. Although shift differentials varied widely, second -shift average wages were commonly 15 to 25 cents per hour above day rates. Third-shift wages were as much as 20 to 35 tents above first-shift wages.

Virtually all workers were employed by firms providing paid holidays and paid vacations. One-third of the workers received 9 or 10 paid holidays annually while another third received 11 or 12 days, and one-fifth received 13 or 14 days. Vacations usually were granted after qualifying periods of service. The most common provisions were 1 to 2 weeks of leave after 1 year of service, 2 to 3 weeks after 3 years, 3 to 4 weeks after 10 years, 4 to 5 weeks after 20 years, and 5 weeks or more after 25 years. Vacation and holiday provisions varied significantly by industry branch and by region.

Almost all production workers were offered life and accidental death and dismemberment insurance, and health insurance including hospitalization, surgical, and basic medical benefits. About 80 percent were offered major medical insurance, and 59 percent were covered by dental insurance. Firms offered short-term protection against loss of income due to illness or accident to 85 percent of the work force, and provided long-term disability insurance to 26 percent. About 88 percent of the workers were covered by retirement plans. Most health, insurance, and retirement pension plans were financed entirely by the employers.

Among other benefits studied and the proportions of production workers covered were: supplemental unemployment (one-fourth); vacation bonus plans (one-eighth); and work-related clothing allowances (one-half).

Also studied were four types of plans which guarantee a level of pay when the employer determines sufficient work is not available. Guaranteed minimums for reporting to the job applied to almost three-fourths of the work force. Call-in (or callback) pay covered 60 percent of the workers and earnings protection plans and guaranteed weekly wage (or weekly hour) plans covered 10 and 15 percent of the workers, respectively.

Two-thirds of the firms had collective bargaining agreements that covered a majority of the production workers. Regionally, the proportion of workers under union contracts ranged from one-sixth in the Southwest to fourfifths in the Great Lakes. By industry branch, the union proportion was about one-half of the workers in gray iron pipe and fittings and steel foundries; three-fourths in gray iron foundries, except pipe and fittings; and nine-tenths in malleable iron foundries.

Major unions in the industry are the United Steelworkers of America; the International Molders and Allied Workers Union of North America; and the United Automobile, Aerospace, and Agricultural Implement Workers of America (all AFL-CIO affiliates).

A comprehensive bulletin on the study, Industry Wage Survey.- Iron and Steel Foundries, October 1986 (Bulletin 2292), may be purchased from the Bureau of Labor Statistics Publications Sales Center, P.O Box 2145, Chicago, IL 60690, or from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. The bulletin provides additional information on occupational pay by characteristics such as size of firm, union status, and location. An analysis using multiple regression to isolate the independent effects of these characteristics on pay is included. Also reported is information on the incidence of contracting out selected services, such as trucking, maintenance, and accounting functions.