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Occupational pay structure in cigarette manufacturing plants.

Occupational pay structure in cigarette manufacturing plants

Straight-time earnings of production and related workers in the cigarette manufacturing industry averaged $14.81 an hour in July 1986, according to a Bureau of Labor Statistics occupational wage survey.1

Pay levels among occupations selected to represent the industry's wage structure, workers' skills, and manufacturing operations ranged from $11.40 an hour for material handling laborers to $17.90 for maintenance electricians. Cigarette making-machine operators, the most numerous group studied separately, averaged $14.96 an hour--$15.01 for filter cigarettes and $13.74 for nonfilter cigarettes. The only other groups with at least 2,000 employees were machine adjusters, who averaged $17.73 an hour and packers, who averaged $15.02 an hour. (See table 1.)

Earnings of individual workers reflect the similarity of rates paid by the establishments in the survey. Commonly, workers' pay varied by no more than 50 cents an hour in each of four surveyed jobs, and by no more than $1 an hour in five others. For example, nearly two-thirds of the cigarette making-machine operators earned between $15 and $15.50 an hour, and three-fifths of the carpenters earned between $17.50 and $18 an hour. Also, differences in earnings of individual workers within the same occupation and establishment seldom exceeded 15 percent.

Such concentrations of earnings largely reflect the principal method of pay in the industry. All of the workers were paid on a time basis, and nearly two-thirds were under systems providing a single rate for a specific job. Range of rate plans covered the other workers.

The $14.81 average for all production workers in July 1986 was 41 percent higher than the $10.47 recorded by a previous survey in June 1981.(2) This increase, accompanied by a 27-percent decline in employment, averaged 7.1 percent annually. In comparison, the wage and salary component of the Bureau's Employment Cost Index registered an average annual increase of 5.0 percent in nondurable goods manufacturing over roughly the same period.

With lower employment came changes in the occupational composition of the work force. Since the 1981 survey, for example, the number of inspectors dropped by one-half and cigarette making-machine operators by one-third; partly attributable to new, multifunctional equipment. Moreover, cigarette catchers--15 percent of the production workers 20 years ago, but just 1 percent in June 1981--were not identified separately for the current study.

All of the production workers were in establishments providing paid holidays, paid vacations, and at least part of the cost of various health and insurance plans. Nearly two-thirds of the cigarette workers received the industry maximum of 13 holidays annually. Typical vacation provisions were 2 to 6 weeks with pay, depending on years of service.

All establishments provided employer-paid retirement pension plans (in addition to Social Security). Retirement severance plans applied to slightly more than two-fifths of the work force.

The nine cigarette manufacturing establishments within the scope of the survey (plants with 50 workers or more) employed 23,913 production workers in July 1986. Two-thirds of the workers were employed in establishments located in metropolitan areas,3 and nearly four-fifths were in establishments employing 2,500 workers or more. Slightly more than one-half of the workers were employed in North Carolina; the remainder were in Georgia, Kentucky, and Virginia.

Filter cigarettes were the primary product manufactured in establishments employing 96 percent of the production workers. The remaining workers were in establishments primarily producing nonfilter cigarettes. Seventy percent of the workers were in establishments producing only cigarettes. However, when a secondary tobacco product was produced, it was always smoking tobacco.

Cigarette plants reporting a majority of their production workers under collective bargaining agreements employed seven-tenths of the industry's work force. The major union in the industry is the Bakery, Confectionery, and Tobacco Workers International Union (AFL-CIO). Under these contracts, workers receive quarterly cost-of-living adjustments (COLA) of 1 cent for each 0.3-percentage-point increase in the BLS Consumer Price Index. Besides COLA, the contracts typically include provisions for wage adjustments--either cents-per-hour or percentage additions to base rates.

A COMPREHENSIVE BULLETIN on the study, Industry Wage Survey: Cigarette Manufacturing, July 1986, BLS Bulletin 2276, may be purchased from the Bureau of Labor Statistics, Publication Sales Center, P.O. Box 2145. Chicago IL 60690, or the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.

1 Earnings data exclude premium pay for overtime and for work on weekends, holidays, and late shifts. Incentive payments, such as those resulting from piecework or production bonus systems, and cost-of-living pay increases (but not bonuses) were included as part of the workers' regular pay. Excluded are performance bonuses and lump-sum payments of the type negotiated in the auto and aerospace industries, as well as profit-sharing payments, attendance bonuses, Christmas or yearend bonuses, and other nonproduction bonuses.

2 See Industry Wage Survey: Cigarette Manufacturing, June 1981, Bulletin 2132 (Bureau of Labor Statistics, June 1982).

3 Metropolitan Statistical Areas as defined by the U.S. Office of Management and Budget through June 1983.

Table: 1. Number of workers and average hourly earnings in cigarette manufacturing plants, selected occupations, July 1986
COPYRIGHT 1987 U.S. Bureau of Labor Statistics
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Title Annotation:research summary
Publication:Monthly Labor Review
Date:May 1, 1987
Previous Article:New data on workers belonging to unions, 1986.
Next Article:Employer-sponsored health insurance for retirees: the need and cost.

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