INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 1998
Average hourly compensation costs for manufacturing production
workers in 28 foreign economies fell to 79 percent of the U.S. level
in 1998, down from 95 percent in 1995, according to the Bureau of
Labor Statistics, U.S. Department of Labor. The trade-weighted costs
relative to the U.S. declined 5 percentage points from 1997, the third
consecutive yearly decline, reaching the lowest relative position
since 1989, when it was 77 percent. The widening gap reflected the
continued appreciation of the U.S. dollar against most foreign
currencies, particularly the Asian currencies. (See chart 1.)
When measured in U.S. dollars, trade-weighted hourly
compensation costs for production workers in manufacturing increased
1.9 percent in the United States from 1997 to 1998 and declined 4.1
percent in the 28 foreign economies studied by BLS. Costs in Europe
increased 1.4 percent, but costs decreased 4.7 percent in Canada, 6.8
percent in Japan, and 13.6 percent in the Asian newly industrializing
economies (NIEs) of Hong Kong, Korea, Singapore, and Taiwan. On a
national currency basis, there were moderate increases of about 3
percent or less in Canada, Japan, Europe, and the Asian NIEs. The
U.S. dollar's appreciation of 7.6 percent against the foreign
currencies offset these increases and led to the decline of costs on a
U.S. dollar basis in the foreign economies. (See table A.)
Chart 1. Hourly compensation costs in U.S. dollars for
production workers in manufacturing, 1975-98
PRINTED COPY CONTAINS CHART AT THIS POINT.
BOX: A NOTE ON THE MEASURES
The hourly compensation measures in this news release are based on
statistics available to BLS as of October 1999. The 1998 compensation
statistics are preliminary measures; for some of the foreign countries,
they are based on less than full-year data. These measures are
prepared specifically for international comparisons of employer labor
costs in manufacturing. The methods used, as well as the results,
differ somewhat from those for other BLS series on U.S. compensation
costs.
Total compensation costs include pay for time worked, other direct
pay (including holiday and vacation pay, bonuses, other direct
payments, and the cost of pay in kind), employer expenditures for
legally required insurance programs and contractual and private benefit
plans, and, for some countries, other labor taxes.
Labor cost measures. The compensation measures are computed in
national currency units and are converted into U.S. dollars at
prevailing commercial market currency exchange rates. They are
appropriate measures for comparing levels of employer labor costs, but
they do not indicate relative living standards of workers or the
purchasing power of their incomes. Prices of goods and services vary
greatly among countries, and commercial market exchange rates do not
reliably indicate relative differences in prices.
Data limitations. Hourly compensation is partly estimated, and data
are subject to revision in the next update. The comparative level
figures are averages for all manufacturing industries and are not
necessarily representative of all component industries.
For further information regarding definitions, sources, and
computation methods and a description of the trade-weighted measures
and economic groups, see the Technical Notes.
Comparative compensation costs in U.S. dollars
Measured in U.S dollars, hourly compensation costs for production
workers in manufacturing increased in 1998 in 13 of the economies
studied, including the United States. This was in sharp contrast to
1997, when only four countries in addition to the United States showed
an increase. In the United States, hourly compensation costs rose to
$18.56, 1.9 percent higher than in 1997.
Hourly compensation costs in Europe rebounded in 1998 after a sharp
decline in 1997. Of the 16 European countries for which data are
available, only the United Kingdom had an increase in costs in 1997.
In 1998, however, the picture looked different. Despite generally
declining currency values, compensation costs rose in nine European
countries, and two countries (Denmark and the United Kingdom) had
percentage increases larger than the U.S. increase. (See tables A and
2.)
European hourly compensation costs are still 11 percent higher than
those in the United States, although this is much lower than the peak
in 1995, when compensation costs in Europe exceeded those in the
United States by 28 percent. The relative gap between Europe and the
United States has not been narrower since 1989, when European costs
were marginally lower than U.S. costs.
Table A. Percent change, 1997-98
Hourly compensation costs, in national currency and in U.S. dollars,
for production workers in manufacturing
and exchange rates (U.S. dollars per national currency unit)
Country National Exchange U.S.
or area Currency Rates dollar
United States 1.9 - 1.9
Canada 2.1 -6.7 -4.7
Mexico 18.8 -13.5 2.8
Australia 6.4 -15.4 -10.0
Hong Kong SAR 1 1.0 -.1 .9
Israel 10.0 -9.2 -.2
Japan .8 -7.6 -6.8
Korea 1.0 -32.1 -31.4
New Zealand 3.1 -19.1 -16.6
Singapore 6.0 -11.1 -5.7
Sri Lanka 12.1 -8.7 2.2
Taiwan 4.0 -14.2 -10.7
Austria 2.6 -1.4 1.1
Belgium 2.7 -1.4 1.3
Denmark 4.5 -1.4 3.0
Finland 3.9 -2.8 .9
France 2.7 -1.0 1.6
Germany, Former West 2.4 -1.4 .9
Germany, Unified 2.6 -1.4 1.1
Greece 4.7 -7.6 -3.2
Ireland 4.7 -6.0 -1.6
Italy -.8 -1.9 -2.6
Luxembourg - - -
Netherlands 1.4 -1.6 -.2
Norway 6.5 -6.2 -.1
Portugal 4.7 -2.7 1.9
Spain 1.2 -1.9 -.8
Sweden 3.1 -3.9 -.9
Switzerland .8 .0 .8
United Kingdom 5.0 1.2 6.2
Trade-weighted measures 2,3
All 28 foreign economies 3.9 -7.6 -4.1
OECD 4 3.8 -7.2 -3.8
less Mexico, Korea 5 2.1 -5.0 -3.1
Europe 2.6 -1.2 1.4
European Union 2.7 -1.2 1.5
Asian NIEs 3.1 -16.3 -13.6
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 The 1997-98 percent changes for the trade weighted measures are
based upon the changes for the countries or areas for which 1998
data are available.
3 German data included in the trade-weighted measures relate to the
former West Germany.
4 OECD refers to the Organization for Economic Cooperation and
Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.
Despite the recent convergence of compensation cost levels between
Europe and the United States, many European countries continue to have
the highest costs among the countries studied. Hourly compensation
costs in the former West Germany were 51 percent higher than those in
the United States, and eight European countries had costs that were
more than 15 percent higher than the United States. (See chart 2.)
Hourly compensation costs in Japan decreased for the third
consecutive year in 1998 to $18.05 and were lower than U.S. costs for
the first time since 1991. In Canada, the decrease in costs by 4.7
percent was the largest one-year decline in that country since the
Bureau of Labor Statistics began the series in 1975.
The steepest declines in compensation costs came in the Asian NIEs,
which saw their costs drop significantly (31.4, 10.7, and 5.7 percent
in Korea, Taiwan, and Singapore, respectively), while costs in Hong
Kong rose only slightly. The declines were largely attributable to
the depreciation of the currencies of these economies against the
dollar, as well as to moderate increases in compensation costs when
measured in national currencies. As a group, the Asian NIEs now have
hourly costs of less than one-third the U.S. level.
In past issues of this news release, data for Germany related to the
former West Germany only. BLS has now prepared estimates of hourly
compensation costs in Unified Germany. Hourly compensation costs for
Unified Germany and the former West Germany are shown in the
tabulation below. The close relationship between the figures for
Unified Germany and the former West Germany is due to the large
proportion of manufacturing employment in Unified Germany accounted
for by the former West Germany.
Hourly Compensation Costs for Production Workers in Manufacturing
in Unified Germany and the Former West Germany
Year Unified Germany Former West Germany Unified Germany
(US$) (US$) (West Germany = 100)
1993 24.44 25.25 96.8
1994 25.96 26.80 96.9
1995 30.83 31.76 97.1
1996 30.26 31.20 97.0
1997 26.90 27.74 97.0
1998 27.20 27.99 97.2
END OF BOX (HOURLY COMPENSATION MEASURES FOR UNIFIED GERMANY)
Comparative cost trends in national currencies
Changes over time in relative compensation cost levels in U.S.
dollars are affected by the differences in underlying national wage
and benefit trends measured in national currencies, as well as
frequent and sometimes sharp changes in relative values of currency
exchange rates. A country's compensation costs expressed in U.S.
dollars are calculated by dividing compensation costs in national
currency by the exchange rate (expressed as national currency units
per U.S. dollar).
Although much of the decline in compensation costs on a U.S. dollar
basis can be attributed to the strength of the dollar, modest
increases in costs on a national currency basis also contributed to
slow compensation growth in many countries. The trade-weighted average
cost increase of 3.9 percent measured in national currency terms for
the 28 foreign economies was the smallest since this series began in
1975.
The 1.9-percent increase in compensation costs in the United States
was lower than that of all but seven economies when measured in
national currency terms. Some of the smallest increases occurred in
Asia, where costs rose 1 percent or less in Hong Kong, Japan, and
Korea. The slow growth in Asia continued a trend: in the first half
of the decade, hourly compensation costs in the Asian NIEs grew at an
annual average rate of more than 10 percent; since 1995, however, the
rate of growth in these economies has been halved.
Compensation costs in Europe rose at a historically low rate of only
2.6 percent. The slowest growth occurred in Spain and Switzerland,
while compensation costs in national currency actually declined in
Italy. The decline in Italy was attributable in large part to the
substantial reduction of employer contributions to legally required
social insurance programs.
Mexico had the largest increase in hourly compensation costs of all
countries studied, 18.8 percent. Costs also increased by 10 percent
or more in Israel and Sri Lanka. These increases were not out of line
with recent experience in these countries. Cost increases in national
currency have historically been high in Israel and Mexico, with a
significant impact on the trade-weighted cost measures for the 28
foreign economies. When Israel and Mexico are excluded, the trade-
weighted average increase in national currency compensation costs in
1998 is reduced from 3.9 percent to 2.3 percent.
Exchange rates
The appreciation of the dollar against the currencies of nearly all
the foreign countries studied continued for the third consecutive year
in 1998. As in 1997, the British pound was the only currency against
which the dollar declined in value. The increase in the dollar's
value in 1998 was the highest since 1984, and the trade-weighted value
of the dollar rose an average of 6.5 percent per year since 1995, the
largest three-year increase since the mid-1980s.
Currency values of the three largest trading partners of the United
States in the study (as measured by trade weights) declined sharply in
1998. The Canadian dollar lost 6.7 percent and the Mexican peso lost
13.5 percent of their values relative to the U.S. dollar. The
weakness of the Japanese yen continued as well, dropping 7.6 percent
in 1998; the value of the yen has fallen nearly 30 percent in three
years.
Except for Hong Kong, where the local currency is pegged to the U.S.
dollar, the currencies of the Asian NIEs lost further ground against
the U.S. currency. The currencies of Korea, Singapore, and Taiwan
depreciated 32.1, 11.1, and 14.2 percent, respectively. These
declines were more than double the rates of 1997 and were the largest
depreciation against the U.S. dollar these countries have experienced
since the beginning of these measures in 1975.
In contrast to 1997 when the European currencies exhibited the
largest depreciation against the U.S. dollar among all currencies
studied, European countries in 1998 saw their currencies depreciate
against the dollar by a moderate 1.2 percent. The 1998 drop was
substantially less than the 1997 depreciation of 9.1 percent.
The weakness of the foreign currencies relative to the U.S. dollar
in 1998 offset increases in hourly compensation costs in national
currencies and led to declines or smaller increases in hourly
compensation costs measured in U.S. dollars. Thus, trade-weighted
hourly compensation costs for the 28 foreign economies studied
increased 3.9 percent from 1997 to 1998 in national currency terms,
but fell 4.1 percent when measured in U.S. dollars. The impact of
exchange rates on compensation costs was particularly evident in the
Asian NIEs: Hourly compensation costs on a national currency basis in
these countries rose 3.1 percent, but, when adjusted for sharp
declines in currency value relative to the U.S. dollar, costs declined
13.6 percent.
Additional data available
In addition to the compensation cost measures covered in this news
release, additional data are available showing comparative levels of
hourly compensation costs, hourly direct pay, and pay for time worked
and the structure of compensation in manufacturing for all years from
1975 through 1998.
BLS also computes comparative measures for 39 component
manufacturing industries. Data are available through 1996. These
data for the component industries are not included in this release
because, in general, the data limitations are greater than they are
for the total manufacturing measures. Nevertheless, these data are
made available upon request and via the World Wide Web
(http://stats.bls.gov/flshome.htm), and there are no restrictions on
their use.
For further information, contact the Office of Productivity and
Technology, Bureau of Labor Statistics, 2 Massachusetts Avenue, NE,
Room 2150, Washington, DC 20212 or call 202-691-5654.
Information in this report is available to sensory impaired
individuals upon request. Voice phone: 202-606-5886; TDD message
referral phone: 1-800-877-8339.
This material is in the public domain and, with appropriate credit,
may be reproduced without permission.
The hourly compensation costs series for Australia, Austria, Canada,
Germany, Japan, and Sweden were revised to incorporate new labor cost
surveys and to make other adjustments.
Data for West Germany were revised to incorporate 1996 labor cost
survey data. In addition, BLS constructed hourly compensation
measures for Unified Germany for 1993 to 1998. The Unified Germany
measures incorporate average hourly earnings data available from 1993
and data from the 1992 and 1996 labor cost surveys.
For Canada, data were revised back to 1975 to reflect revisions to
the Supplementary Labor Income series. One revision is that payroll
taxes paid into general revenues are no longer considered to be social
security taxes by Statistics Canada and are not included in the
Canadian national accounts. BLS made special estimates of additional
compensation by incorporating these taxes. The inclusion of these
taxes by BLS is consistent with methodology used in constructing the
Canadian compensation measures in the past.
For Australia, revisions were made to incorporate 1993-94 and 1996-
97 major labor cost survey data.
For Austria, the hourly compensation measures were revised to
incorporate the results of a 1996 labor cost survey.
For Japan, monthly labor survey benchmarks made every three years
were incorporated in the BLS calculations from 1996.
For Sweden, BLS methods of estimating holiday pay and sick leave
were adjusted for 1997 and 1998 to reflect changes in Statistics
Sweden data collection.
END OF BOX (REVISED MEASURES)
Table 1. Indexes of hourly compensation costs in U.S. dollars for production workers
in manufacturing, 29 countries or areas and selected economic groups, selected years, 1975-98
(Index, United States = 100)
Country or area 1975 1980 1985 1990 1994 1995 1996 1997 1998
United States ...... 100 100 100 100 100 100 100 100 100
Canada ............. 94 88 84 107 94 94 94 90 85
Mexico ............. 23 22 12 11 15 9 9 10 10
Australia .......... 88 86 63 88 84 89 95 91 80
Hong Kong SAR 1 .... 12 15 13 21 27 28 29 30 29
Israel ............. 35 38 31 57 54 61 64 66 65
Japan .............. 47 56 49 86 127 139 118 106 97
Korea .............. 5 10 9 25 38 42 46 40 27
New Zealand ........ 50 54 34 56 53 59 62 61 50
Singapore .......... 13 15 19 25 37 43 47 45 42
Sri Lanka .......... 4 2 2 2 3 3 3 3 3
Taiwan ............. 6 10 12 26 33 34 34 32 28
Austria ............ 71 90 58 119 128 147 140 120 119
Belgium ............ 101 133 69 129 137 155 146 125 125
Denmark ............ 99 110 62 121 120 140 136 121 122
Finland ............ 72 83 63 141 113 140 133 117 116
France ............. 71 91 58 104 105 116 113 99 98
Germany, Former West 99 124 73 147 159 185 176 152 151
Germany, Unified.... - - - - 154 179 171 148 147
Greece ............. 27 38 28 45 46 53 54 51 48
Ireland ............ 48 60 46 78 73 79 78 74 72
Italy .............. 73 83 59 117 94 94 100 96 92
Luxembourg ......... 102 122 60 112 121 136 127 - -
Netherlands ........ 103 122 67 121 123 140 130 113 111
Norway ............. 106 117 80 144 124 142 142 130 128
Portugal ........... 25 21 12 25 27 31 32 30 30
Spain .............. 40 60 36 76 68 75 76 67 65
Sweden ............. 113 127 74 140 110 125 138 122 119
Switzerland ........ 96 112 74 140 148 170 160 133 131
United Kingdom ..... 53 77 48 85 76 80 80 85 89
Trade-weighted measures 2,3
All 28 foreign econ. 60 67 52 83 89 95 91 84 79
OECD 4 ............. 67 74 57 90 96 103 98 90 85
less Mexico, Korea5 76 84 65 104 110 119 112 103 98
Europe ............. 80 100 61 116 114 128 125 112 111
European Union ..... 79 100 60 115 113 126 123 111 110
Asian NIEs ......... 8 12 13 25 34 37 39 37 31
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Data for Germany relate to the former West Germany only.
3 For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
29 countries or areas and selected economic groups, selected years, 1975-98
Country or area 1975 1980 1985 1990 1994 1995 1996 1997 1998
United States ...... $6.36 $9.87 $13.01 $14.91 $16.87 $17.19 $17.70 $18.21 $18.56
Canada ............. 5.96 8.67 10.95 15.95 15.88 16.10 16.64 16.46 15.69
Mexico ............. 1.47 2.21 1.59 1.58 2.47 1.51 1.54 1.78 1.83
Australia .......... 5.62 8.47 8.20 13.07 14.12 15.27 16.88 16.58 14.92
Hong Kong SAR 1 .... .76 1.51 1.73 3.20 4.61 4.82 5.14 5.42 5.47
Israel ............. 2.25 3.79 4.06 8.55 9.19 10.54 11.32 12.04 12.02
Japan .............. 3.00 5.52 6.34 12.80 21.35 23.82 20.91 19.37 18.05
Korea .............. .32 .96 1.23 3.71 6.40 7.29 8.22 7.33 5.03
New Zealand ........ 3.21 5.33 4.47 8.33 8.93 10.11 11.03 11.02 9.19
Singapore .......... .84 1.49 2.47 3.78 6.29 7.33 8.32 8.24 7.77
Sri Lanka .......... .28 .22 .28 .35 .45 .48 .48 .46 .47
Taiwan ............. .40 1.00 1.50 3.93 5.55 5.92 5.93 5.87 5.24
Austria ............ 4.51 8.88 7.58 17.75 21.55 25.31 24.80 21.91 22.16
Belgium ............ 6.41 13.11 8.97 19.17 23.07 26.65 25.89 22.82 23.11
Denmark ............ 6.28 10.83 8.13 18.04 20.30 24.07 24.11 22.03 22.69
Finland ............ 4.61 8.24 8.16 21.03 19.06 24.14 23.56 21.37 21.57
France ............. 4.52 8.94 7.52 15.49 17.63 20.01 19.93 17.99 18.28
Germany, Former West 6.31 12.25 9.53 21.88 26.80 31.76 31.20 27.74 27.99
Germany, Unified - - - - 25.96 30.83 30.26 26.90 27.20
Greece ............. 1.69 3.73 3.66 6.76 7.73 9.17 9.59 9.20 8.91
Ireland ............ 3.03 5.95 5.92 11.66 12.39 13.57 13.85 13.55 13.33
Italy .............. 4.67 8.15 7.63 17.45 15.89 16.22 17.75 17.57 17.11
Luxembourg ......... 6.50 12.03 7.81 16.74 20.33 23.35 22.55 - -
Netherlands ........ 6.58 12.06 8.75 18.06 20.80 24.02 23.08 20.61 20.57
Norway ............. 6.77 11.59 10.37 21.47 20.97 24.38 25.05 23.72 23.70
Portugal ........... 1.58 2.06 1.53 3.77 4.60 5.37 5.58 5.38 5.48
Spain .............. 2.53 5.89 4.66 11.38 11.54 12.88 13.51 12.24 12.14
Sweden ............. 7.18 12.51 9.66 20.93 18.62 21.44 24.37 22.23 22.03
Switzerland ........ 6.09 11.09 9.66 20.86 24.91 29.30 28.34 24.19 24.38
United Kingdom ..... 3.37 7.56 6.27 12.70 12.80 13.67 14.09 15.47 16.43
Trade-weighted measures 2,3
All 28 foreign econ. 3.83 6.60 6.75 12.36 15.00 16.37 16.06 15.24 14.69
OECD 4 ............. 4.25 7.30 7.40 13.49 16.26 17.73 17.33 16.38 15.82
less Mexico, Korea5 4.82 8.30 8.48 15.55 18.56 20.38 19.85 18.74 18.20
Europe ............. 5.10 9.90 7.96 17.31 19.27 22.00 22.05 20.42 20.67
European Union ..... 5.03 9.83 7.85 17.09 18.99 21.64 21.72 20.20 20.47
Asian NIEs ......... .52 1.17 1.65 3.72 5.78 6.40 6.91 6.67 5.72
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Data for Germany relate to the former West Germany only.
3 For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production workers
in manufacturing, 29 countries or areas and selected economic groups, selected periods, 1975-98
Country or area 1975-98 1975-80 1980-85 1985-90 1990-95 1995-98 1996 1997 1998
United States ...... 4.8 9.2 5.7 2.8 2.9 2.6 3.0 2.9 1.9
Canada ............. 4.3 7.8 4.8 7.8 .2 -.9 3.4 -1.1 -4.7
Mexico ............. 1.0 8.5 -6.4 -.1 -.9 6.6 2.0 15.6 2.8
Australia .......... 4.3 8.5 -.6 9.8 3.2 -.8 10.5 -1.8 -10.0
Hong Kong SAR 1 .... 9.0 14.7 2.8 13.1 8.5 4.3 6.6 5.4 .9
Israel ............. 7.6 11.0 1.4 16.1 4.3 4.5 7.4 6.4 -.2
Japan .............. 8.1 13.0 2.8 15.1 13.2 -8.8 -12.2 -7.4 -6.8
Korea .............. 12.7 24.6 5.1 24.7 14.5 -11.6 12.8 -10.8 -31.4
New Zealand ........ 4.7 10.7 -3.5 13.3 3.9 -3.1 9.1 -.1 -16.6
Singapore .......... 10.2 12.1 10.6 8.9 14.2 2.0 13.5 -1.0 -5.7
Sri Lanka .......... 2.3 -4.7 4.9 4.6 6.5 -.7 .0 -4.2 2.2
Taiwan ............. 11.8 20.1 8.4 21.2 8.5 -4.0 .2 -1.0 -10.7
Austria ............ 7.2 14.5 -3.1 18.6 7.4 -4.3 -2.0 -11.7 1.1
Belgium ............ 5.7 15.4 -7.3 16.4 6.8 -4.6 -2.9 -11.9 1.3
Denmark ............ 5.7 11.5 -5.6 17.3 5.9 -1.9 .2 -8.6 3.0
Finland ............ 6.9 12.3 -.2 20.8 2.8 -3.7 -2.4 -9.3 .9
France ............. 6.3 14.6 -3.4 15.5 5.3 -3.0 -.4 -9.7 1.6
Germany, Former West 6.7 14.2 -4.9 18.1 7.7 -4.1 -1.8 -11.1 .9
Germany, Unified.... - - - - - -4.1 -1.8 -11.1 1.1
Greece ............. 7.5 17.2 -.4 13.1 6.3 -1.0 4.6 -4.1 -3.2
Ireland ............ 6.7 14.4 -.1 14.5 3.1 -.6 2.1 -2.2 -1.6
Italy .............. 5.8 11.8 -1.3 18.0 -1.5 1.8 9.4 -1.0 -2.6
Luxembourg ......... (2)6.1 13.1 -8.3 16.5 6.9 - -3.4 - -
Netherlands ........ 5.1 12.9 -6.2 15.6 5.9 -5.0 -3.9 -10.7 -.2
Norway ............. 5.6 11.4 -2.2 15.7 2.6 -.9 2.7 -5.3 -.1
Portugal ........... 5.6 5.4 -5.8 19.8 7.3 .7 3.9 -3.6 1.9
Spain .............. 7.1 18.4 -4.6 19.6 2.5 -2.0 4.9 -9.4 -.8
Sweden ............. 5.0 11.7 -5.0 16.7 .5 .9 13.7 -8.8 -.9
Switzerland ........ 6.2 12.7 -2.7 16.6 7.0 -5.9 -3.3 -14.6 .8
United Kingdom ..... 7.1 17.5 -3.7 15.2 1.5 6.3 3.1 9.8 6.2
Trade-weighted measures 3,4
All 28 foreign econ. 6.4 12.5 1.0 12.8 5.6 -2.2 .3 -2.2 -4.1
less Mexico, Israel 7.0 13.0 1.7 14.1 6.3 -3.2 .1 -4.2 -4.8
OECD 5 ............. 5.9 12.0 .1 12.4 5.1 -2.4 -.4 -2.6 -3.8
less Mexico, Korea6 6.1 11.8 .7 13.3 5.3 -3.1 -1.4 -4.5 -3.1
Europe ............. 6.3 14.5 -4.1 16.7 4.4 -1.1 1.1 -5.6 1.4
European Union ..... 6.4 14.6 -4.1 16.7 4.3 -.9 1.3 -5.2 1.5
Asian NIEs ......... 11.3 18.9 7.0 18.4 11.3 -3.6 7.4 -2.7 -13.6
Rates of change based on compound rate method.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 1975-96.
3 Data for Germany relate to the former West Germany only.
4 Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas.
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5 Organization for Economic Cooperation and Development.
6 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
Table 4. Hourly compensation costs in national currency for production workers in manufacturing,
29 countries or areas, selected years, 1975-98
Country or area 1975 1980 1985 1990 1994 1995 1996 1997 1998
United States ...... 6.36 9.87 13.01 14.91 16.87 17.19 17.70 18.21 18.56
Canada ............. 6.06 10.13 14.95 18.62 21.69 22.10 22.69 22.80 23.29
Mexico ............. 18 51 409 4440 8.34 9.69 11.68 14.12 16.78
Australia .......... 4.30 7.43 11.70 16.74 19.30 20.62 21.56 22.30 23.73
Hong Kong SAR 1 .... 3.73 7.50 13.46 24.91 35.65 37.30 39.74 41.99 42.39
Israel ............. 1.44 19.42 4.79 17.24 27.66 31.73 36.14 41.52 45.67
Japan .............. 889 1245 1512 1856 2182 2238 2275 2345 2364
Korea .............. 157 583 1074 2623 5141 5620 6611 6973 7042
New Zealand ........ 2.65 5.48 8.98 13.98 15.06 15.41 16.04 16.62 17.14
Singapore .......... 2.00 3.20 5.43 6.85 9.61 10.39 11.73 12.25 12.99
Sri Lanka .......... 1.97 3.58 7.58 14.05 22.32 24.45 26.49 26.86 30.10
Taiwan ............. 15.17 36.13 59.60 105.69 146.88 156.86 162.90 169.04 175.81
Austria ............ 78.46 114.78 156.75 201.07 245.88 255.11 262.64 267.50 274.39
Belgium ............235.10 382.88 532.39 640.60 771.23 785.47 801.77 817.19 839.25
Denmark ............ 36.00 60.98 86.18 111.65 129.00 134.77 139.86 145.60 152.11
Finland ............ 16.88 30.64 50.56 80.56 99.76 105.65 108.24 111.04 115.34
France ............. 19.34 37.73 67.49 84.38 97.76 99.77 101.97 105.05 107.88
Germany, Former West 15.48 22.23 28.04 35.37 43.48 45.47 46.95 48.12 49.26
Germany, Unified.... - - - - 42.11 44.14 45.54 46.67 47.87
Greece ............. 55 159 506 1071 1876 2124 2309 2514 2632
Ireland ............ 1.36 2.89 5.55 7.03 8.28 8.46 8.66 8.94 9.36
Italy .............. 3048 6966 14563 20900 25591 26425 27394 29945 29714
Luxembourg ......... 239 352 464 559 680 688 698 - -
Netherlands ........ 16.59 23.93 29.04 32.90 37.84 38.52 38.91 40.26 40.81
Norway ............. 35.29 57.20 89.11 134.26 147.92 154.44 161.78 168.10 178.98
Portugal ........... 40.26 103.28 263.37 538.11 763.09 804.35 860.39 943.62 988.13
Spain .............. 145 422 792 1161 1545 1604 1712 1793 1814
Sweden ............. 29.73 52.91 83.12 123.98 143.64 153.14 163.46 169.97 175.22
Switzerland ........ 15.72 18.57 23.71 29.00 34.06 34.61 35.03 35.10 35.37
United Kingdom ..... 1.52 3.25 4.84 7.12 8.36 8.66 9.03 9.44 9.91
For currency units, see note to table 6.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
Table 5. Annual percent change in hourly compensation costs in national currency for
production workers in manufacturing, 29 countries or areas and selected economic
groups, selected periods, 1975-98
Country or area 1975-98 1975-80 1980-85 1985-90 1990-95 1995-98 1996 1997 1998
United States ...... 4.8 9.2 5.7 2.8 2.9 2.6 3.0 2.9 1.9
Canada ............. 6.0 10.8 8.1 4.5 3.5 1.8 2.7 .5 2.1
Mexico ............. 34.6 23.2 51.6 61.1 16.9 20.1 20.5 20.9 18.8
Australia .......... 7.7 11.6 9.5 7.4 4.3 4.8 4.6 3.4 6.4
Hong Kong SAR 1 .... 11.1 15.0 12.4 13.1 8.4 4.4 6.5 5.7 1.0
Israel ............. 56.9 68.3 200.9 29.2 13.0 12.9 13.9 14.9 10.0
Japan .............. 4.3 7.0 4.0 4.2 3.8 1.8 1.7 3.1 .8
Korea .............. 18.0 30.0 13.0 19.6 16.5 7.8 17.6 5.5 1.0
New Zealand ........ 8.5 15.6 10.4 9.3 2.0 3.6 4.1 3.6 3.1
Singapore .......... 8.5 9.9 11.2 4.8 8.7 7.7 12.9 4.4 6.0
Sri Lanka .......... 12.6 12.7 16.2 13.1 11.7 7.2 8.3 1.4 12.1
Taiwan ............. 11.2 19.0 10.5 12.1 8.2 3.9 3.9 3.8 4.0
Austria ............ 5.6 7.9 6.4 5.1 4.9 2.5 3.0 1.9 2.6
Belgium ............ 5.7 10.2 6.8 3.8 4.2 2.2 2.1 1.9 2.7
Denmark ............ 6.5 11.1 7.2 5.3 3.8 4.1 3.8 4.1 4.5
Finland ............ 8.7 12.7 10.5 9.8 5.6 3.0 2.5 2.6 3.9
France ............. 7.8 14.3 12.3 4.6 3.4 2.6 2.2 3.0 2.7
Germany, Former West 5.2 7.5 4.8 4.8 5.2 2.7 3.3 2.5 2.4
Germany, Unified.... - - - - - 2.7 3.2 2.5 2.6
Greece ............. 18.3 23.7 26.1 16.2 14.7 7.4 8.7 8.9 4.7
Ireland ............ 8.7 16.3 13.9 4.8 3.8 3.4 2.4 3.2 4.7
Italy .............. 10.4 18.0 15.9 7.5 4.8 4.0 3.7 9.3 -.8
Luxembourg ......... (2) 5.2 8.1 5.7 3.8 4.2 - 1.5 - -
Netherlands ........ 4.0 7.6 3.9 2.5 3.2 1.9 1.0 3.5 1.4
Norway ............. 7.3 10.1 9.3 8.5 2.8 5.0 4.8 3.9 6.5
Portugal ........... 14.9 20.7 20.6 15.4 8.4 7.1 7.0 9.7 4.7
Spain .............. 11.6 23.8 13.4 7.9 6.7 4.2 6.7 4.7 1.2
Sweden ............. 8.0 12.2 9.5 8.3 4.3 4.6 6.7 4.0 3.1
Switzerland ........ 3.6 3.4 5.0 4.1 3.6 .7 1.2 .2 .8
United Kingdom ..... 8.5 16.4 8.3 8.0 4.0 4.6 4.3 4.5 5.0
Trade-weighted measures 3,4
All 28 foreign econ. 10.3 13.6 14.0 11.7 6.3 4.7 5.6 4.7 3.9
less Mexico, Israel 7.2 12.0 8.0 6.4 5.1 3.0 3.9 2.9 2.3
OECD 5 ............. 9.7 12.8 12.3 11.7 5.9 4.6 5.3 4.7 3.8
less Mexico, Korea6 6.1 10.5 7.3 5.0 3.9 2.4 2.7 2.6 2.1
Europe ............. 7.2 12.4 8.7 5.8 4.4 3.2 3.3 3.8 2.6
European Union ..... 7.3 12.8 8.9 5.9 4.4 3.3 3.3 4.0 2.7
Asian NIEs ......... 12.6 19.6 11.6 12.9 10.6 5.8 9.9 4.7 3.1
Rates of change based on compound rate method.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 1975-96.
3 Data for Germany relate to the former West Germany only.
4 Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5 Organization for Economic Cooperation and Development.
6 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
Exchange rates, 29 countries or areas, selected years, 1975-98
(National currency units per U.S. dollar)
Country or area 1975 1980 1985 1990 1994 1995 1996 1997 1998
United States ....... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Canada .............. 1.017 1.169 1.366 1.167 1.366 1.373 1.364 1.385 1.484
Mexico .............. 12.50 22.97 256.9 2813 3.375 6.419 7.600 7.918 9.152
Australia ........... .7647 .8772 1.428 1.281 1.367 1.350 1.277 1.345 1.590
Hong Kong SAR 1 ..... 4.939 4.976 7.791 7.790 7.729 7.736 7.735 7.743 7.747
Israel .............. .6390 5.124 1.179 2.016 3.011 3.011 3.192 3.449 3.800
Japan ............... 296.7 225.7 238.5 145.0 102.2 93.96 108.8 121.1 131.0
Korea ............... 484.0 607.4 870.0 707.8 803.5 771.3 804.5 950.8 1400
New Zealand ......... .8254 1.027 2.010 1.677 1.685 1.524 1.454 1.509 1.865
Singapore ........... 2.371 2.141 2.200 1.813 1.527 1.417 1.410 1.486 1.672
Sri Lanka ........... 7.050 16.53 27.16 40.06 49.42 51.25 55.27 59.00 64.59
Taiwan .............. 38.00 36.02 39.85 26.92 26.47 26.50 27.47 28.78 33.55
Austria ............. 17.40 12.93 20.68 11.33 11.41 10.08 10.59 12.21 12.38
Belgium ............. 36.69 29.20 59.34 33.42 33.43 29.47 30.97 35.81 36.31
Denmark ............. 5.735 5.629 10.60 6.190 6.356 5.600 5.800 6.609 6.703
Finland ............. 3.665 3.719 6.197 3.830 5.234 4.376 4.595 5.196 5.347
France .............. 4.282 4.220 8.980 5.447 5.546 4.986 5.116 5.839 5.900
Germany, Former West 2.455 1.815 2.942 1.617 1.622 1.432 1.505 1.735 1.760
Germany, Unified ..... - - - - 1.622 1.432 1.505 1.735 1.760
Greece .............. 32.29 42.62 138.1 158.5 242.6 231.7 240.7 273.1 295.5
Ireland ............. .4500 .4860 .9379 .6033 .6680 .6236 .6252 .6595 .7019
Italy ............... 652.4 855.1 1909 1198 1611 1629 1543 1704 1737
Luxembourg .......... 36.78 29.24 59.38 33.42 33.46 29.48 30.96 - -
Netherlands ......... 2.523 1.985 3.318 1.822 1.819 1.604 1.686 1.953 1.984
Norway .............. 5.214 4.936 8.593 6.254 7.055 6.336 6.459 7.086 7.552
Portugal ............ 25.45 50.05 172.1 142.7 165.9 149.9 154.3 175.4 180.3
Spain ............... 57.39 71.64 170.0 102.0 133.9 124.6 126.7 146.5 149.4
Sweden .............. 4.142 4.229 8.603 5.923 7.716 7.141 6.708 7.645 7.952
Switzerland ......... 2.581 1.675 2.455 1.390 1.367 1.181 1.236 1.451 1.451
United Kingdom ...... .4501 .4300 .7708 .5605 .6528 .6335 .6407 .6106 .6034
1 Hong Kong Special Administrative Region of China.
Note: National currency units are: United States, dollar; Canada, dollar;
Mexico, old peso (1975-92), new peso (1993-98); Australia, dollar; Hong
Kong, dollar; Israel, shekel (1975-84), new shekel (1985-98); Japan, yen;
Korea, won; New Zealand, dollar; Singapore, dollar; Sri Lanka, rupee;
Taiwan, dollar; Austria, schilling; Belgium, franc; Denmark, krone;
Finland, markka; France, franc; Germany, mark; Greece, drachma;
Ireland, pound; Italy, lira; Luxembourg, franc; Netherlands, guilder;
Norway, krone; Portugal, escudo; Spain, peseta; Sweden, krona;
Switzerland, franc; United Kingdom, pound.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
Table 7. Annual percent change in exchange rates (U.S. dollars per national currency unit),
29 countries or areas and selected economic groups, selected years, 1975-98
Country or area 1975-98 1975-80 1980-85 1985-90 1990-95 1995-98 1996 1997 1998
United States ........ - - - - - - - - -
Canada ............... -1.6 -2.7 -3.1 3.2 -3.2 -2.6 .7 -1.5 -6.7
Mexico ............... -24.9 -11.5 -38.3 -38.0 -15.2 -11.2 -15.5 -4.0 -13.5
Australia ............ -3.1 -2.7 -9.3 2.2 -1.0 -5.3 5.7 -5.1 -15.4
Hong Kong SAR 1 ...... -1.9 -.1 -8.6 .0 .1 .0 .0 -.1 -.1
Israel ............... -31.5 -34.1 -66.3 -10.2 -7.7 -7.5 -5.7 -7.5 -9.2
Japan ................ 3.6 5.6 -1.1 10.5 9.1 -10.5 -13.6 -10.2 -7.6
Korea ................ -4.5 -4.4 -6.9 4.2 -1.7 -18.0 -4.1 -15.4 -32.1
New Zealand .......... -3.5 -4.3 -12.6 3.7 1.9 -6.5 4.8 -3.6 -19.1
Singapore ............ 1.5 2.1 -.5 3.9 5.1 -5.4 .5 -5.1 -11.1
Sri Lanka ............ -9.2 -15.7 -9.5 -7.5 -4.8 -7.4 -7.3 -6.3 -8.7
Taiwan ............... .5 1.1 -2.0 8.2 .3 -7.6 -3.5 -4.6 -14.2
Austria .............. 1.5 6.1 -9.0 12.8 2.4 -6.6 -4.8 -13.3 -1.4
Belgium .............. .0 4.7 -13.2 12.2 2.5 -6.7 -4.8 -13.5 -1.4
Denmark .............. -.7 .4 -11.9 11.4 2.0 -5.8 -3.4 -12.2 -1.4
Finland .............. -1.6 -.3 -9.7 10.1 -2.6 -6.5 -4.8 -11.6 -2.8
France ............... -1.4 .3 -14.0 10.5 1.8 -5.5 -2.5 -12.4 -1.0
Germany, Former West . 1.5 6.2 -9.2 12.7 2.5 -6.6 -4.9 -13.3 -1.4
Germany, Unified...... - - - - - -6.6 -4.9 -13.3 -1.4
Greece ............... -9.2 -5.4 -21.0 -2.7 -7.3 -7.8 -3.7 -11.9 -7.6
Ireland .............. -1.9 -1.5 -12.3 9.2 -.7 -3.9 -.3 -5.2 -6.0
Italy ................ -4.2 -5.3 -14.8 9.8 -6.0 -2.1 5.6 -9.4 -1.9
Luxembourg ........... (2) .8 4.7 -13.2 12.2 2.5 - -4.8 - -
Netherlands .......... 1.1 4.9 -9.8 12.7 2.6 -6.8 -4.9 -13.7 -1.6
Norway ............... -1.6 1.1 -10.5 6.6 -.3 -5.7 -1.9 -8.8 -6.2
Portugal ............. -8.2 -12.7 -21.9 3.8 -1.0 -6.0 -2.9 -12.0 -2.7
Spain ................ -4.1 -4.3 -15.9 10.8 -3.9 -5.9 -1.7 -13.5 -1.9
Sweden ............... -2.8 -.4 -13.2 7.8 -3.7 -3.5 6.5 -12.3 -3.9
Switzerland .......... 2.5 9.0 -7.4 12.0 3.3 -6.6 -4.4 -14.8 .0
United Kingdom ....... -1.3 .9 -11.0 6.6 -2.4 1.6 -1.1 4.9 1.2
Trade-weighted measures 3,4
All 28 foreign econ. -2.8 -.5 -9.4 2.9 -.4 -6.5 -4.9 -6.6 -7.6
less Mexico, Israel... -.1 1.0 -5.8 7.3 1.2 -6.0 -3.8 -6.9 -6.9
OECD 5 ............... -2.8 -.3 -9.6 2.8 -.6 -6.6 -5.3 -6.9 -7.2
less Mexico, Korea 6 .1 1.3 -6.1 7.9 1.4 -5.4 -4.0 -6.8 -5.0
Europe ............... -.7 2.0 -11.7 10.3 .0 -4.3 -2.1 -9.1 -1.2
European Union ....... -.9 1.7 -11.9 10.3 -.1 -4.1 -2.0 -8.9 -1.2
Asian NIEs ........... -1.1 -.5 -4.2 4.9 .7 -8.8 -2.3 -7.0 -16.3
Rates of change based on compound rate method.
1 Hong Kong Special Administrative Region of China.
2 1975-96.
3 Data for Germany relate to the former West Germany only.
4 Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas.
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5 Organization for Economic Cooperation and Development.
6 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, January 2000.
TECHNICAL NOTES
The tables in this news release present international comparisons of hourly
compensation costs for production workers in manufacturing in selected countries
or areas. The total compensation measures are prepared by the Bureau of Labor
Statistics in order to assess international differences in employer labor costs.
Comparisons based on the more readily available average earnings statistics
published by many countries can be very misleading. National definitions of
average earnings differ considerably; average earnings do not include all items
of labor compensation; and the omitted items of compensation frequently
represent a large proportion of total compensation.
The compensation measures are computed in national currency units and are
converted into U.S. dollars at prevailing commercial market currency exchange
rates. The foreign currency exchange rates used in the calculations are the
average daily exchange rates for the reference period. They are appropriate
measures for comparing levels of employer labor costs. They do not indicate
relative living standards of workers or the purchasing power of their income.
Prices of goods and services vary greatly among countries, and commercial market
exchange rates are not reliable indicators of relative differences in prices.
Definitions
Hourly compensation costs include (1) hourly direct pay and (2) employer social
insurance expenditures and other labor taxes. Hourly direct pay includes all
payments made directly to the worker, before payroll deductions of any kind,
consisting of (a) pay for time worked (basic time and piece rates plus overtime
premiums, shift differentials, other premiums and bonuses paid regularly each
pay period, and cost-of-living adjustments) and (b) other direct pay (pay for
time not worked (vacations, holidays, and other leave, except sick leave),
seasonal or irregular bonuses and other special payments, selected social
allowances, and the cost of payments in kind). Social insurance expenditures
and other labor taxes include (c) employer expenditures for legally required
insurance programs and contractual and private benefit plans (retirement and
disability pensions, health insurance, income guarantee insurance and sick
leave, life and accident insurance, occupational injury and illness
compensation, unemployment insurance, and family allowances) and, for some
countries, (d) other labor taxes (other taxes on payrolls or employment (or
reductions to reflect subsidies), even if they do not finance programs that
directly benefit workers, because such taxes are regarded as labor costs). For
consistency, compensation is measured on an hours-worked basis for every
country.
The BLS definition of hourly compensation costs is not the same as the
International Labour Office (ILO) definition of total labor costs. Hourly
compensation costs do not include all items of labor costs. The costs of
recruitment, employee training, and plant facilities and services(such as
cafeterias and medical clinics(are not included because data are not available
for most countries. The labor costs not included account for no more than 4
percent of total labor costs in any country for which the data are available.
Production workers generally include those employees who are engaged in
fabricating, assembly, and related activities; material handling, warehousing,
and shipping; maintenance and repair; janitorial and guard services; auxiliary
production (for example, powerplants); and other services closely related to the
above activities. Working supervisors are generally included; apprentices and
other trainees are generally excluded.
Methods
Total compensation is computed by adjusting each country's average earnings
series for items of direct pay not included in earnings and for employer
expenditures for legally required insurance, contractual and private benefit
plans, and other labor taxes. For the United States and other countries that
measure earnings on an hours-paid basis, the figures are also adjusted in order
to approximate compensation per hour worked.
Earnings statistics are obtained from surveys of employment, hours, and earnings
or from surveys or censuses of manufactures.
Adjustment factors are obtained from periodic labor cost surveys and
interpolated or projected to nonsurvey years on the basis of other information
for most countries. The information used includes annual tabulations of
employer social security contribution rates provided by the International
Studies Staff of the U.S. Social Security Administration, information on
contractual and legislated fringe benefit changes from ILO and national labor
bulletins, and statistical series on indirect labor costs. For other countries,
adjustment factors are obtained from surveys or censuses of manufactures or from
reports on fringe-benefit systems and social security. For the United States,
the adjustment factors are special calculations for international comparisons
based on data from several surveys.
The statistics are also adjusted, where necessary, to account for major
differences in worker coverage; differences in industrial classification
systems; and changes over time in survey coverage, sample benchmarks, or
frequency of surveys. Nevertheless, some differences in industrial coverage
remain and, with the exception of the United States, Canada, and several other
countries, the data exclude very small establishments (less than 5 employees in
Japan and less than 10 employees in most European and some other countries).
For the United States, the methods used, as well as the results, differ somewhat
from those for other BLS series on U.S. compensation costs.
Hourly compensation costs are converted to U.S. dollars using the average daily
exchange rate for the reference period. The exchange rates used are prevailing
commercial market exchange rates as published by either the U.S. Federal Reserve
Board or the International Monetary Fund.
For further details on survey sources and on special estimation procedures for
some countries because of incomplete data, see International Comparisons of
Hourly Compensation Costs for Production Workers in Manufacturing, 1995 (Report
909, Bureau of Labor Statistics, September 1996).
Country notes
The following are exceptions to the standard coverage and definitions explained
above:
Australia. Compensation relates to production workers and nonproduction workers
other than those in managerial, executive, professional, and higher supervisory
positions.
Hong Kong SAR. Average of selected manufacturing industries. The industries
covered accounted for about 70 percent of all persons employed in manufacturing
in 1988. Compensation excludes overtime pay. Hong Kong became a Special
Administrative Region (SAR) of China in July 1997.
Austria. Excludes workers in establishments considered handicraft
manufacturers. (All printing and publishing and miscel-laneous manufacturing
establishments are classified in handi-crafts.) In 1986, handicraft employment
was about 35 percent of all manufacturing employment. Average compensation per
employee was about 10 percent lower in manufacturing including handicrafts than
in manufacturing excluding handicrafts.
Finland. Includes workers in mining and electrical power plants. For
comparability with other countries, compensation excludes some obligatory
training and plant facilities costs; these costs would add 1.6 percent to
average hourly compensation costs in 1994.
Germany. Excludes workers in establishments considered handicraft
manufacturers. In 1990, handicraft employment in the former West Germany was
about 25 percent of all manufacturing employment. Average hourly earnings of
production workers were about 3 percent lower in manufacturing including
handicrafts than in manufacturing excluding handicrafts.
Ireland. Data refer to September for 1975.
Norway. For comparability with other countries, compen-sation excludes some
obligatory training and plant facilities costs; these costs would add 2.2
percent to average hourly compensation costs in 1994.
Trade-weighted measures
The trade weights used to compute the average compensation cost measures for
selected country or economic groups are the sum of U.S. imports of manufactured
products for consumption (customs value) and U.S. exports of domestic
manufactured products (free along side {f.a.s.} value) in 1992 for each country
or area and each economic group. See table A.
The trade data used to compute the weights are U.S. Bureau of the Census
statistics of U.S. imports and exports converted to an industrial classification
basis from data initially collected under the Harmonized Tariff Schedule
commodity classification system.
The Organization for Economic Cooperation and Development (OECD) includes
Canada, Mexico, Australia, Japan, Korea, New Zealand, and all European
countries. The European Union (EU) consists of Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, Spain, Sweden, and the United Kingdom. Europe includes the EU
countries plus Norway and Switzerland. The group labeled "Asian NIEs" consists
of the four newly industrializing economies of Hong Kong SAR, Korea, Singapore,
and Taiwan.
The trade weighted measures relate to all the countries or areas covered in the
series. Data for Germany relate to the former West Germany. Estimates are
computed for missing country data using the average trend in other economies to
estimate the missing data. Trade weighted average percent changes for the 28
foreign economies are computed both including and excluding Mexico and Israel
because their rapid rates of inflation and currency changes in several years
distort the trade-weighted averages.
Table A. Share of total U.S. imports and exports
of manufactured products in 1992(in percent)
Country or area 1992 Country or area 1992
and trade and trade
economic group share economic group share
Canada 19.2 Greece .1
Mexico 7.6 Ireland .6
Italy 2.3
Australia 1.4 Luxembourg .1
Hong Kong SAR 1 2.0 Netherlands 1.9
Israel .8 Norway .3
Japan 15.8
Portugal .2
Korea 3.4 Spain .8
New Zealand .3 Sweden .8
Singapore 2.4 Switzerland 1.0
Sri Lanka .1 United Kingdom 4.4
Taiwan 4.4 Economic groups:
Austria .3 28 foreign
Belgium 1.5 economies 80.8
Denmark .3 OECD 3 71.1
Finland .2 Europe 23.4
France 3.2 European Union 22.1
Germany 2 5.4 Asian NIEs 12.2
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
3 Organization for Economic Cooperation and Development.
Data limitations
Because compensation is partly estimated, the statistics should not be
considered as precise measures of comparative compen-sation costs. In addition,
the figures are subject to revision as the results of new labor cost surveys or
other data used to estimate compensation costs become available.
The comparative level figures in this report are averages for all manufacturing
industries and are not necessarily representative of all component industries.
In the United States and some other countries, such as Japan, differentials in
hourly compensation cost levels by industry are quite wide. In contrast, other
countries, such as Sweden, have narrow differentials.
Labor costs versus labor income
The hourly compensation figures in U.S. dollars shown in the tables provide
comparative measures of employer labor costs; they
do not provide intercountry comparisons of the purchasing power
of worker incomes. Prices of goods and services vary greatly
among countries, and the commercial market exchange rates used
to compare employer labor costs do not reliably indicate relative
differences in prices. Purchasing power parities(that is, the
number of foreign currency units required to buy goods and
services equivalent to what can be purchased with one unit of
U.S. or other base-country currency(must be used for meaningful
international comparisons of the relative purchasing power of
worker incomes.
Total compensation converted to U.S. dollars at purchasing
power parities would provide one measure for comparing relative
real levels of labor income. It should be noted, however, that total
compensation includes employer payments to funds for the benefit
of workers in addition to payments made directly to workers. (For
a few countries, the compensation measures also include taxes or
subsidies on payrolls or employment even if they do not finance
programs which directly benefit workers.) Payments into these
funds provide either deferred income (for example, payments to
retirement funds), a type of insurance (for example, payments to
unemployment or health benefit funds), or current social benefits
(for example, family allowances), and the relationship between
employer payments and current or future worker benefits is
indirect. On the other hand, excluding these payments would
understate the total value of income derived from work because
they substitute for worker savings or self-insurance to cover
retirement, medical costs, etc.
Total compensation, because it takes account of employer
payments into funds for the benefit of workers, is a broader income
concept than either total direct earnings or direct spendable
earnings. An even broader concept would take account of all
social benefits available to workers, including those financed out
of general revenues as well as those financed through employment
or payroll taxes.
Internet address:
http://stats.bls.gov/flshome.htm USDL: 00-07
Technical information: (202) 691-5654 For Release: 10:00 A.M. EST
Media contact: (202) 691-5902 Tuesday, January 11, 2000