Worried employers keep a lid on raises.

• Position: Interview

Bruce Clarke is CEO of Capital Associated Industries, a Raleigh-based employers association, which for 30 years has conducted pay surveys in 55 counties in the eastern half of the state. This year's survey of 393 employers, with 66,000 workers, found raises to be the smallest in a decade--averaging 3.1% for hourly workers and 3.3% for salaried employees and executives. They're projecting slightly higher gains in 2004--3.3% for hourly workers, 3.6% for salaried employees and 3.7% for executives.

BNC: Why are the average raises so low?

Clarke: Part of the reason is that we found the highest percentage of employers having no raise--wage freezes--that we've ever had. Among all employers, 11% gave no raises to hourly employees, 11% gave none to salaried employees and 14% gave none to executives.

What sector has been hit hardest?

Manufacturing, in several ways. The numbers are even higher--13% of the companies gave no raise. Fourteen percent gave no raise to the salaried employees, and one of five gave no raise to executives. Those are very high percentages to give no raise. Also, we are seeing a decline of the average hourly wage in the lower-skilled jobs. All we can conclude from this is that, particularly in manufacturing, some of the higher-paying low-skill jobs are gone, and that leaves, for the averages, the lower-paying jobs. We have jobs that don't exist anymore that were in the survey five years ago.

Such as?

We do not now report a single textile job. We don't get enough responses from textile jobs for it to be statistically significant. As few as five years ago, it was its own category. At the same time, we've added jobs in chemicals and pharmaceuticals. And biotech will probably break out in its own category soon. There are some things that are going, growing and gone.

What's causing all this woe?

One thing is that manufacturers are increasingly being held to what are called world price standards, meaning that trade barriers have been removed to such a degree that they are competing with the world on what they make. It is very difficult to compete in many product lines, particularly in the labor-cost component. We have a number of free-trade agreements, whether they were properly or improperly negotiated, that came on board in the last five to eight years. These have accelerated the decline of manufacturing in North Carolina.

Is free trade the villain?

I don't want to appear critical of free trade, because I'm not. What we're critical...