Look for employment costs to rise this year.
The Plastics Industry Association’s (PLASTICS) latest report, “Rising U.S. Labor Costs: Implications for Plastics Industry for 2026,” cites minimum wage increases in several states and climbing health-care costs as factors driving up the total cost of wages and benefits, even as the labor market appears to be cooling.
“I think all processors would have to factor in higher costs of wages in 2026,” Perc Pineda, chief economist for PLASTICS, told Plastics Machinery & Manufacturing for a story last month discussing this year’s outlook for the industry.
In his most recent report, released Feb. 3, Pineda says, “For the year ahead, plastics manufacturers will need to carefully monitor both wage trends and employment cost dynamics.”
The Bureau of Labor Statistics (BLS) reported a decline of about 4,900 jobs in plastics and rubber processing between November and December 2025, and a loss of about 7,400 jobs for the year. The unemployment rate was at 4.4 percent and is not expected to climb above 5 percent.
However, the Employment Cost Index — a comprehensive measurement of expenses that include wages and benefits, like paid leave, retirement contributions and health insurance — will likely continue to go up, according to the PLASTICS report. With several states implementing minimum wage increases this year, employers might feel pressure to increase pay for all their workers, as those at the lowest tiers see their own wages stagnate relative to the minimum wage increase.
Health-insurance costs are another important factor in ECI, which is determined quarterly by the BLS.
According to the PLASTICS report, “In the second quarter of 2022, the ECI recorded its largest year-over-year increase at 5.0 percent before moderating to 3.2 percent in the first quarter of 2025, and then rising slightly to 3.3 percent and 3.4 percent in the second and third quarters, respectively. It is likely that the fourth-quarter ECI exceeded 3.0 percent. Looking ahead, plastics manufacturers should factor in a potential ECI increase above 3.0 percent in 2026.”
In its 2025 Size and Impact Report, PLASTICS said materials account for two-thirds of plastics processors’ costs; annual payroll represents 12.7 percent; and other operating costs soak up 20.7 percent.
To companies trying to stay competitive, Pineda advised being ready to move quickly as plant closures and consolidations might free some skilled and experienced workers to explore the job market.
“The key is to be quick, so that your competitors don’t get to those workers before you can,” he said.
About the Author
Karen Hanna
Senior Staff Reporter
Senior Staff Reporter Karen Hanna covers injection molding, molds and tooling, processors, workforce and other topics, and writes features including In Other Words and Problem Solved for Plastics Machinery & Manufacturing, Plastics Recycling and The Journal of Blow Molding. She has more than 15 years of experience in daily and magazine journalism.