A Productive Work Force

PUBLISHED AUGUST 2023

You don’t have to read between too many lines of data from the Bureau of Labor Resources to discern what Missouri employers have long known: Outside of the two metro areas that bracket the Show-Me State, the supply of plentiful labor—highly skilled, highly qualified—is available at highly competitive rates.

The cost-of-living factors explored in detail elsewhere in this series are the foundation for that affordable-wage dynamic. The fact is, people can work here for less than they’d need to maintain an equivalent lifestyle in coastal and large-market states—and in many cases, a higher quality of life.

Nationally, American workers earned an average of $29.76 as of early 2023, while those in Missouri averaged $27.14. And in only two counties, Jackson and St. Louis, and the city of St. Louis itself, did the average exceed the national figures.

Put another way, labor in Missouri—relative to the rest of the U.S.—yields an 8.8 percent premium for employers. And with labor topping the cost structures of many companies, the potential impact on organizational profitability comes into sharp relief.

Nationwide, labor productivity—the value of goods and services produced for each hour of labor—ranged from $58.80 in Mississippi to $120.67 in New York in 2022. In Missouri, the figure was $69.67. 

That, in part, is why Missouri had near-record-low unemployment in the spring of 2023 at 2.5 percent; only 10 other states had jobless rates below that level. That’s even lower than the pre-pandemic record of 3.0 percent, and it represents a sharp turn-around from the brief spike in job losses nationwide during the early months of the COVID-19 emergency.

For nearly 5,100 manufacturers operating in the state, those numbers represent opportunity. Manufacturing accounts for 9.52 percent of the stages workforce and an even larger share—12.05 percent of the total statewide output, or $41.75 billion in 2021. For roughly 274,000 employees in the state, that sector yielded average annual compensation of $78,247.84 in 2021, the most recent full year for which the BLS has data.

That compares quite favorably to the $55,769 average for other non-farm work in the state.

The biggest output came from food, beverage, and tobacco related production, followed by chemicals, motor vehicles and vehicle parts, fabricated metals and machinery: In other words, Missouri produces a lot of the materials that allow other manufacturers to do their thing across the U.S. and around the world.