Tobacco

Workers & Wages

This section discusses the current status and historical trends in labor market conditions related to establishments, employment and wages within the North Carolina and U.S. tobacco industry. This analysis primarily uses data from the U.S. Bureau of Labor Statistics (BLS) based on our definition of the tobacco industry. Links are provided to the underlying data in the form of interactive tables, charts and maps throughout this section.

Overview

Employment and establishments have declined steadily in the United States and North Carolina across all segments of the tobacco value chain over the last two decades. In 1992, the U.S. tobacco industry employed over 80,762 people in 2,144 establishments. By 2012 this number dropped to 42,531 workers in 1,955 establishments, a decline of 47.34% and 8.82% respectively over the last two decades (1992-2012).

While significant declines have occurred in North Carolina, the state is still currently the largest overall employer, representing 25.2% of U.S. employment and the largest in the U.S. in terms of the overall number of establishments (17.3% of U.S. establishments). In 1992, North Carolina was the overall largest employer but its relative share of national employment was slightly higher (29.3%), however, its national share in number of establishments was slightly lower (14.4%).

Within the value chain, the distribution segment of the chain (tobacco and tobacco product merchant wholesalers) employs the most U.S. workers and accounts for by far the most number of establishments; however within North Carolina, the components and final products segment (tobacco manufacturing) is the most important in terms employment and the raw materials segment (tobacco farming) dominates the number of establishments. Although employment has declined and North Carolina’s share of U.S. employment has fallen by 4.1%, NC has remained the leading employer both the final products segment and the raw materials segments – while Florida, Texas, Pennsylvania, Ohio, California, and New York have been employment leaders in the distribution segment. Overall wages have increased at a slower rate in NC compared to the U.S. average over the last two decades across all industries (43.91% vs. 48.87%). This was slightly more pronounced in North Carolina’s main segment (tobacco manufacturing) where North Carolina wages increased by 37.28% compared to a U.S. average of 50.1%.

Geographically, the industry is somewhat dispersed across numerous counties in North Carolina, with a general concentration in the more eastern-central counties. One identifiable cluster includes Wilson, Johnston and Nash counties, with Pitt, Wake, Wayne and Sampson counties adding to the eastern-central concentration.

top

North Carolina
Present (2012)

Overall

  • North Carolina had a total of 340 tobacco establishments employing 9,546 employees across three primary segments: raw materials, components and final products, and distribution (T2a; T3a).
  • Average annual wages in North Carolina for the tobacco value chain as a whole were $44,964 (T4a). When disaggregated by value chain segments annual wages display a clear tier system commensurate with skill level. At the low end, average wages for the raw materials segment were $20,415, while distribution segment paid on average more than double this, at $46,538. At the high end components and final products paid more than three times that of raw materials, at $67,940 (T4a).
  • Geographically, the tobacco value chain is spread across more than 50 counties. Amongst this state-wide dispersion, three central counties – Wilson, Johnston, and Wayne – offer the only evidence of geographic clustering (M3a).

Main Segment

  • In 2012 the main segment of the tobacco value chain in North Carolina was the components and final products segment (NAICS 3122), which employed 6,119 workers across 26 establishments (T2a; T3a; C2a; C3a).
  • While raw materials commanded the most number of establishments (256) employment ratio of workers per establishment and average wages per worker were dominated by the components and final products segment (T2a; T3a; C2a; C3a).
  • Similar to total geographic distribution across the tobacco value chain, components and final products establishments exhibited geographic dispersion. The two counties housing the most number of establishments were Forsyth and Wilson, with five and four establishments in each respective location.

Historical Trends (1992-2012; 2002-2012)

Overall

  • Total employment in North Carolina’s tobacco value chain has declined markedly since 1992. Across all three segments the average decline in employment from 1992-2002 was -24.7% (21,721 – 16,361), and over the period 2002-2012, employment fell across all segments by an average of -41.7% (16,361 – 9,546) (T3a; C3a).
  • Wages in all three segments of the tobacco value chain have experienced steady growth since 1992, increasing on average by 20.7% during the time period 2002- 3 2012 (T4a; C4a). The raw materials and distribution segments have experienced higher proportional increases than components and final products with averages in the 50% range during the period 1992-2012, compared to roughly 37% for components and final products (T4a; C4a).
  • In almost every successive year since 1992 instances of employee layoffs and/or establishment closings have occurred – this fits with the downward employment trend the tobacco value chain has experienced North Carolina during the same time period. The years experiencing the largest number of total layoffs and/or establishment closings were 1999, 2004, and 2009; total number of effected workers equated to 3,085; 1835; and 3,070 respectively (C8a; T8a)
  • The counties most negatively affected by layoffs and establishment closings since 1992 have been Forsyth (4,233 workers affected) and Cabarrus (2,600 workers affected) (M8a). Three other counties – Rockingham, Durham, and Nash – have experienced layoffs and or establishment closings that have negatively affected over 1,000 workers each (C8a; T8a).

Main Segment

  • Components and final products segment since 1992: employment has fallen by 66.8%; the total number of establishments has decreased by 13.3%; however, average annual wages have increased by 37.3% (T2a; T3a; T4a).

top

United States
Present (2012)
  • In 2012 there were 42,531 employees in the U.S. tobacco industry – of which 42.28% were in distribution-related segments (24,548 total workers) (T3b; C3b).
  • The smallest segment in the national tobacco value chain in terms of employment was the raw materials (tobacco farming) segment with only 3,948 workers, and the smallest in terms of number of establishments was the components and final products (tobacco manufacturing) with only 154 establishments (T3b; T4b).
  • Overall the components and final products (tobacco manufacturing) has the highest average salaries ($83,557) and the lowest average salaries were in the raw materials segment at around $20,884 (T4b; C4b).
Historical Trends (1992-2012; 2002-2012)
  • The number of tobacco establishments across the U.S. decreased by -21.7% between 2002 and 2012 and total national employment numbers fell by -37.1% during the same time frame (T2b; T3b). By comparison, in 1992 the U.S. tobacco value chain employed 80,762 workers while in 2012 the total employed in the value chain was only 42,531 (- 52.7%).
  • Unlike in North Carolina, across the entire U.S. tobacco value chain the segment employing the largest number of workers was distribution. At 24,548 total workers in 2012, the distribution segment employed 57.8% of all tobacco related workers (T3b; C3b).
  • In spite drastic employment decreases, average annual wages have steadily increased in all three primary sectors of the U.S. tobacco value chain for both 10 year periods 1999- 2002 (47.7%) and 2002-2012 (20.7%) (M4b; T4b).

top

Top U.S. States
Present (2012)

Overall

  • The top U.S. states in terms of employment and establishments are North Carolina, Florida, New York, Texas, Kentucky, Virginia, and Pennsylvania (T2c; T3c).
  • North Carolina dominates the tobacco farming segment of the chain, with only Kentucky and Virginia as secondary contributors (C2c; C3c). While many more states are involved in the distribution segment of the chain: Florida, Texas, Pennsylvania, Ohio, California, and New York (T2c; T3c). The states have not significantly repositioned themselves in the value chain over the past decade.

Main NC Segment

  • In the tobacco manufacturing segment, the top employers are NC (57.5%), Florida (14.2%), Kentucky (9.4%), Tennessee (7.7%), Pennsylvania (6.8%), and New York (3.6%) (US T3c).

Historical Trends (1992-2012; 2002-2012)

Overall

  • As the number of workers employed by the U.S. tobacco industry has declined over the last two decades, unlike North Carolina, numerous states have increased their total share of tobacco related employment, but aggregate gains remain low; for example, Florida (4.2%-8.3%); Pennsylvania (3.7%-4.9%); and Texas (2.4%- 2.9%) (T3c).
  • The three states with the largest proportional losses in national shares of total employment have been Virginia (15.3%-2.1%), Kentucky (8.4%-4.5%), and North Carolina (29.3%-25.2%) (C3c; T3c).
  • Of the tobacco segments, only the tobacco farming segment has remained comparatively stable in terms of employment, albeit total employment has declined by 17.3%. However, this decline is more a result of consolidation to three states North Carolina, Kentucky, and Virginia than complete net loss, as their respective employment shares have increased by 7.95%, 17.74%, and 3.45%. (C3c; T3c).
  • Since 1992, the distribution segment of the tobacco value chain has remained disbursed around the country with overall employment losses affecting most states relatively evenly. Of the main states, New York’s total distribution employment and national share of distribution employment has fallen the most: 46.55% fall in total employment and a fall in nation share from 6.9%-5% (T3c).
  • Of the main U.S. states, only New York, Pennsylvania, and Florida have experience overall average annual wage increases greater than the U.S. average of 48.87% over the last two decades (T4c).

Main NC Segment

  • Florida is the only state in the country to increase its aggregate number of tobacco manufacturing employees over the two decade span, 1992-2012; rising from the state with the fewest number of employees in 1992 (1,049) and rising to the state with the second most in 2012 (1,512) – a 30.62% increase (T3c).
  • Regarding number of establishments, all states have experienced declines between 1992 and 2012, with Pennsylvania being the most hard hit – falling from 84 establishments in 1992 to only 16 in 2012 (-80.95%) (C2c).
  • Average wage increases in Tennessee, Florida, and Pennsylvania have all outpaced wages increases experience in NC between 1992 and 2012 (C4c).

top

NC in the U.S. Economy
Present (2012)
  • North Carolina maintained its long standing position as U.S. leader in the tobacco value chain occupying the largest state share of both number of establishments (17.3%) and total employment (25.2%) in 2012.
  • Wages in North Carolina, while having increased by 3.2% between 2007 and 2012, still only positioned North Carolina 12th in rank order of highest average annual wages amongst all U.S. States in 2012 (M4c; T4c).
Historical Trends (1992-2012; 2002-2012)
  • In all three benchmarked periods 1992, 2002, and 2012 North Carolina was the leading employer in the U.S. tobacco farming and tobacco manufacturing segments (T3c; C3c).
  • Regarding total employment in the distribution segment of the tobacco value chain, the highest place North Carolina has commanded between 1992 and 2012 was sixth place: years 2002 and 2007 (T3c).
  • While employment numbers have fallen between 1992 and 2012 in all three segments of North Carolina’s tobacco value chain, its share of total U.S. employment for all three has gone up during this time: tobacco farming (69.5%-75.5%); tobacco manufacturing (49%- 57.5%); and distribution (2.3%-4.2%) (C3c; T3c).
  • Overall wages have increased at a slower rate over the last two decades in North Carolina across all industries (43.91%) compared to the U.S. average (48.87%). This was slightly more pronounced in North Carolina’s main segment (tobacco manufacturing) where North Carolina wages increased by 37.28% compared to a U.S. average of 50.1%.

top