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Internet address: http://stats.bls.gov
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USDL: 97-213
For Release: 10:00 A.M. EDT
Friday, June 27, 1997
INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 1996
Hourly compensation costs for production workers in manufacturing in the United States in 1996 were 10 percent higher than the
average cost level for 28 foreign economies studied by the Bureau of Labor Statistics, U.S. Department of Labor. Costs in Europe
and Japan remained above that in the United States (25 and 19 percent higher, respectively). Costs in Japan fell below the average
cost level in Europe for the first time since 1992. A gain in hourly compensation costs in Canada brought their cost level to 94
percent of the U.S. costs. (See charts 1 and 2 and tables 1, 2, and 3.) Costs for manufacturing production workers in the Asian
newly industrializing economies (NIEs) studied rose at a slower rate in 1996 than in the past two years, reaching about 40 percent
of the U.S. level. Labor costs in manufacturing in Mexico declined slightly in U.S. dollar terms in 1996, following a larger
decrease in 1995. Costs in Mexico are now less than 10 percent of the U.S. level. Overall, the trade-weighted average cost level
of all 28 foreign economies studied declined to 91 percent of the U.S. cost level, after reaching a record high of 95 percent in
1995.
Chart 1. Hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1975-96
PRINTED COPY CONTAINS CHART AT THIS POINT.
The Bureau of Labor Statistics (BLS) has developed comparative measures of hourly compensation costs to provide a basis for
assessing international differences in employer labor costs. The compensation measures are computed in national currency units and
are converted into U.S. dollars at prevailing commercial market currency exchange rates.
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.
The hourly compensation measures in this news release are based on statistics available to BLS as of May 1997. The 1996
compensation statistics are preliminary measures; for most of the foreign countries, they are based on less than full-year data.
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 Japan, hourly compensation costs of manufacturing production workers declined from 138 percent of the U.S. cost level in
1995 to 119 percent in 1996, while the trade-weighted average cost level in the European countries declined only 3 percentage points
to 125 percent of the U.S. cost level. Among individual European countries, relative costs remained highest in the former West
Germany and Switzerland.
Hourly compensation costs in Canada rose to 94 percent of the U.S. cost level in 1996, while the cost level in Mexico remained
below 10 percent of the U.S. costs. The trade-weighted average cost level in the Asian NIEs studied-Hong Kong, Korea, Singapore,
and Taiwan-continued to rise, reaching 39 percent of U.S. costs. Relative costs also rose in Australia and New Zealand.
The trade-weighted average cost level for manufacturing production workers in all 28 foreign economies studied declined 4
percentage points to 91 percent of U.S. costs.
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.
In the United States, hourly compensation costs for manufacturing production workers increased 3.2 percent in 1996. In
national-currency terms, hourly compensation costs rose at the same rate in Canada; in Japan, the increase was slightly less than in
the U.S. (See table A.)
The trade-weighted average of the wage and benefit increases in Europe was 3.8 percent in 1996; increases in individual
countries ranged from less than 1 1/2 percent in the Netherlands and Switzerland to about 6 1/2 percent in Spain and Sweden.
Chart 2. Indexes of hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1996
PRINTED COPY CONTAINS CHART AT THIS POINT.
Among the Asian NIEs, the trade-weighted average cost increase was 9.6 percent in 1996; increases in individual countries
ranged widely from about 4 1/2 percent in Taiwan to 16 percent in Korea.
The highest cost increase in national currency-terms was the 17.9 percent increase in Mexico.
increase for all 28 foreign economies was 5.8 percent.
The trade-weighted average
Cost trends in U.S. dollars
While compensation costs in national currency in Canada and Japan rose at about the same 3 percent rate as in the United
States, after adjustment for exchange rate changes, compensation costs rose slightly more (3.9 percent) in Canada and declined
(-11.1 percent) in Japan. The decline in Japan was the result of a sharp decline in the value of the yen versus the U.S. dollar.
(See tables A, 3, 5 and 7.)
In Europe, the trade-weighted average currency exchange rate declined 2.1 percent in 1996, and hourly compensation costs
measured in U.S. dollars rose 1.7 percent. Currency exchange rates rose relative to the U.S. dollar only in Italy and Sweden, and
their compensation costs in U.S. dollars showed the largest European cost increases. In contrast, after adjustment for currency
exchange rates, hourly compensation costs declined 3 percent or more in Belgium, the Netherlands, and Switzerland.
In Mexico, hourly compensation costs in U.S. dollars were essentially unchanged from 1995 to 1996 because the decline in the
U.S. dollar value of the peso offset the national compensation cost increase.
Among the Asian NIEs, currency exchange rates declined in Korea and Taiwan and remained essentially unchanged from 1995 levels
in Hong Kong and Singapore. For Taiwan, the exchange rate decline offset most of the moderate cost increase in national currency,
and hourly compensation costs in U.S. dollars rose less than 1 percent. In the other NIE economies, hourly compensation costs in
U.S. dollars rose from 6 1/2 percent in Hong Kong to 13 1/2 percent in Singapore, and the trade-weighted average cost increase was
7.1 percent.
In the other Pacific Rim economies of Australia and New Zealand, while hourly compensation measured in national currency rose
at less than half the average rate for the Asian NIEs, their currency exchange rates rose in 1996 and their hourly compensation
costs measured in U.S. dollars increased about 10 percent-higher than the NIE average.
For all 28 foreign economies, the average exchange rate decline of 4.9 percent offset most of the average compensation cost
increase of 5.8 percent measured in national currency terms.
Table A.
Percent change, 1995-96
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
or area
National
currency
Exchange
rates
U.S.
dollar
United States
Canada
Mexico
3.2
3.2
17.9
.7
-15.6
3.2
3.9
-.7
Australia
Hong Kong
Israel
Japan
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
4.0
6.5
13.8
3.0
16.0
4.1
12.9
4.3
5.7
.0
-8.4
-13.6
-4.1
4.8
.5
-3.5
10.0
6.6
4.2
-11.1
11.2
9.1
13.5
.7
3.3
1.9
4.1
3.4
2.6
-4.8
-4.8
-3.5
-4.8
-2.5
-1.7
-3.0
.5
-1.5
.0
Austria
Belgium
Denmark
Finland
France
Germany 1
Greece
Ireland
5.2
2.3
-4.9
-.2
.1
2.1
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
3.7
1.4
4.4
6.4
6.6
1.2
4.5
5.6
-4.9
-1.9
-1.7
6.5
-4.4
-1.1
9.4
-3.5
2.3
4.6
13.5
-3.3
3.4
Trade-weighted measures 2
All 28 foreign economies
OECD 3
less Mexico, Korea 4
Europe
European Union
Asian NIEs
5.8
5.6
3.4
3.8
3.9
9.6
-4.9
-5.3
-4.0
-2.1
-2.0
-2.3
.5
-.2
-.8
1.7
1.9
7.1
Dash means data not available.
1 Germany refers to the former West Germany.
2 The 1995-96 percent changes for the trade weighted measures are based upon the changes for the 24 countries or areas for which
1996 data are available.
3 OECD refers to the Organization for Economic Cooperation and Development.
4 Mexico joined the OECD in 1994 and Korea joined in 1996.
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 1996.
BLS also computes comparative measures for 39 component manufacturing industries. Data are available through 1994. 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 Internet (http://
stats.bls.gov), 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 20212-0001 or call 202-606-5654.
Information in this report is available to sensory impaired individuals upon request.
Voice phone: 202-606-STAT; TDD phone:
202-606-5897; TDD message referral phone: 1-800-326-2577.
This material is in the public domain and, with appropriate credit, may be reproduced without permission.
-1-
Table 1. Indexes of hourly compensation costs for production workers in manufacturing,
29 countries or areas and selected economic groups, selected years, 1975-96
(Index, United States = 100)
Country or area
1975
1980
1985
1990
1992
1993
1994
1995
1996
100
100
100
100
100
100
100
100
100
Canada
Mexico
94
23
88
22
84
12
106
11
106
13
100
15
94
15
93
9
94
8
Australia
Hong Kong
Israel
Japan
88
12
35
47
86
15
38
56
63
13
31
49
88
21
57
86
81
24
56
101
76
26
53
115
83
27
54
125
88
28
61
138
93
29
62
119
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
5
50
13
4
6
10
54
15
2
10
9
34
19
2
12
25
56
25
2
26
32
49
31
2
32
34
49
32
3
31
38
53
37
3
33
43
59
43
3
34
46
62
47
33
Austria
Belgium
Denmark
Finland
71
101
99
72
90
133
110
83
58
69
62
63
119
129
120
141
126
138
124
124
122
131
116
101
128
138
121
113
148
156
141
144
141
147
137
138
France
Germany 1
Greece
Ireland
71
100
27
48
91
125
38
60
58
74
28
46
102
147
45
79
105
158
46
83
98
154
43
73
101
159
45
75
113
185
52
80
109
180
80
Italy
Luxembourg
Netherlands
Norway
73
100
103
106
83
121
122
117
59
59
67
80
119
110
123
144
122
117
126
143
97
112
121
122
95
119
124
124
96
134
141
142
102
132
141
United States
Portugal
Spain
Sweden
Switzerland
United Kingdom
Trade-weighted measures 2
All 28 foreign economies
OECD 3
less Mexico, Korea 4
Europe
European Union
Asian NIEs
25
40
113
96
53
21
60
127
112
77
12
36
74
74
48
25
76
140
140
85
32
83
153
144
90
27
70
107
137
76
27
68
112
148
76
31
74
126
170
80
75
138
160
80
60
67
76
80
79
8
67
74
84
101
100
12
52
57
65
61
60
13
83
90
104
116
115
25
88
96
110
122
121
30
86
94
107
111
110
31
89
96
110
114
113
34
95
103
118
128
126
37
91
98
112
125
124
39
Dash means data not available.
1 Former West Germany.
2 For description of trade-weighted measures and economic groups,
see the Technical Notes.
3 Organization for Economic Cooperation and Development.
4 Mexico joined the OECD in 1994 and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
29 countries or areas and selected economic groups, selected years, 1975-96
Country or area
1975
1980
1985
1990
1992
1993
1994
1995
1996
$6.36
$9.87
$13.01
$14.91
$16.09
$16.51
$16.87
$17.19
$17.74
Canada
Mexico
5.96
1.47
8.67
2.21
10.94
1.59
15.84
1.58
17.03
2.17
16.44
2.40
15.85
2.47
16.04
1.51
16.66
1.50
Australia
Hong Kong
Israel
Japan
5.62
.76
2.25
3.00
8.47
1.51
3.79
5.52
8.20
1.73
4.06
6.34
13.07
3.20
8.55
12.80
13.02
3.92
9.09
16.28
12.49
4.29
8.82
19.01
14.02
4.61
9.19
21.07
15.05
4.82
10.54
23.66
16.55
5.14
10.98
21.04
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
.32
3.21
.84
.28
.40
.96
5.33
1.49
.22
1.00
1.23
4.47
2.47
.28
1.50
3.71
8.33
3.78
.35
3.93
5.22
7.91
4.95
.40
5.09
5.64
8.01
5.25
.42
5.19
6.40
8.93
6.29
.45
5.49
7.40
10.11
7.33
.48
5.82
8.23
11.03
8.32
5.86
United States
Austria
Belgium
Denmark
Finland
4.51
6.41
6.28
4.61
8.88
13.11
10.83
8.24
7.58
8.97
8.13
8.16
17.75
19.22
17.96
21.03
20.29
22.23
20.02
19.92
20.16
21.62
19.11
16.63
21.51
23.25
20.40
19.06
25.38
26.88
24.26
24.83
24.95
26.07
24.38
24.45
France
Germany 1
Greece
Ireland
4.52
6.35
1.69
3.03
8.94
12.33
3.73
5.95
7.52
9.60
3.66
5.92
15.23
21.96
6.71
11.76
16.89
25.40
7.46
13.37
16.23
25.36
7.02
12.12
17.04
26.90
7.51
12.63
19.34
31.85
8.90
13.83
19.34
31.87
14.12
Italy
Luxembourg
Netherlands
Norway
4.67
6.35
6.58
6.77
8.15
11.98
12.06
11.59
7.63
7.72
8.75
10.37
17.74
16.37
18.29
21.47
19.60
18.85
20.34
23.03
16.00
18.49
20.05
20.21
16.10
20.06
20.92
20.97
16.52
23.12
24.18
24.38
18.08
23.33
24.95
Portugal
Spain
Sweden
Switzerland
United Kingdom
1.58
2.53
7.18
6.09
3.37
2.06
5.89
12.51
11.09
7.56
1.53
4.66
9.66
9.66
6.27
3.77
11.33
20.93
20.86
12.71
5.17
13.37
24.59
23.23
14.44
4.50
11.50
17.70
22.63
12.47
4.60
11.39
18.86
24.91
12.86
5.37
12.70
21.64
29.30
13.73
13.29
24.56
28.34
14.19
Trade-weighted measures 2
All 28 foreign economies
OECD 3
less Mexico, Korea 4
Europe
European Union
Asian NIEs
3.83
4.25
4.83
5.10
5.04
.52
6.60
7.30
8.31
9.92
9.85
1.17
6.75
7.40
8.48
7.98
7.87
1.65
12.34
13.47
15.52
17.34
17.13
3.72
14.21
15.46
17.72
19.66
19.45
4.91
14.27
15.50
17.72
18.33
18.11
5.18
14.94
16.19
18.48
19.28
19.00
5.76
16.32
17.69
20.32
22.01
21.65
6.39
16.13
17.41
19.95
22.22
21.91
6.89
Dash means data not available.
1 Former West Germany.
2 For description of trade-weighted measures and economic groups,
see the Technical Notes.
3 Organization for Economic Cooperation and Development.
4 Mexico joined the OECD in 1994 and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
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, 1975-96
Country or area
1975-96
1975-80
1980-85
1985-90
1990-96
1993
1994
1995
1996
United States
5.0
9.2
5.7
2.8
2.9
2.6
2.2
1.9
3.2
Canada
Mexico
5.0
.1
7.8
8.5
4.8
-6.4
7.7
-.1
.8
-.9
-3.5
10.6
-3.6
2.9
1.2
-38.9
3.9
-.7
Australia
Hong Kong
Israel
Japan
5.3
9.5
7.8
9.7
8.5
14.7
11.0
13.0
-.6
2.8
1.4
2.8
9.8
13.1
16.1
15.1
4.0
8.2
4.3
8.6
-4.1
9.4
-3.0
16.8
12.2
7.5
4.2
10.8
7.3
4.6
14.7
12.3
10.0
6.6
4.2
-11.1
16.7
6.1
11.5
1/ 2.7
13.6
24.6
10.7
12.1
-4.7
20.1
5.1
-3.5
10.6
4.9
8.4
24.7
13.3
8.9
4.6
21.2
14.2
4.8
14.1
6.9
8.0
1.3
6.1
5.0
2.0
13.5
11.5
19.8
7.1
5.8
15.6
13.2
16.5
6.7
6.0
11.2
9.1
13.5
.7
8.5
6.9
6.7
8.3
14.5
15.4
11.5
12.3
-3.1
-7.3
-5.6
-.2
18.6
16.5
17.2
20.8
5.8
5.2
5.2
2.5
-.6
-2.7
-4.5
-16.5
6.7
7.5
6.8
14.6
18.0
15.6
18.9
30.3
-1.7
-3.0
.5
-1.5
France
Germany 2
Greece
Ireland
7.2
8.0
1/ 8.7
7.6
14.6
14.2
17.2
14.4
-3.4
-4.9
-.4
-.1
15.2
18.0
12.9
14.7
4.1
6.4
3.1
-3.9
-.2
-5.9
-9.3
5.0
6.1
7.0
4.2
13.5
18.4
18.5
9.5
.0
.1
2.1
Italy
Luxembourg
Netherlands
Norway
6.7
1/ 6.7
6.2
6.4
11.8
13.5
12.9
11.4
-1.3
-8.4
-6.2
-2.2
18.4
16.2
15.9
15.7
.3
4.1
2.5
-18.4
-1.9
-1.4
-12.2
.6
8.5
4.3
3.8
2.6
15.3
15.6
16.3
9.4
-3.5
2.3
Portugal
Spain
Sweden
Switzerland
United Kingdom
1/ 6.3
8.2
6.0
7.6
7.1
5.4
18.4
11.7
12.7
17.5
-5.8
-4.6
-5.0
-2.7
-3.7
19.8
19.4
16.7
16.6
15.2
2.7
2.7
5.2
1.9
-13.0
-14.0
-28.0
-2.6
-13.6
2.2
-1.0
6.6
10.1
3.1
16.7
11.5
14.7
17.6
6.8
4.6
13.5
-3.3
3.4
7.4
8.2
6.8
7.1
7.2
7.2
13.4
12.5
13.0
12.0
11.8
14.5
14.6
18.9
1.0
1.7
.1
.6
-4.1
-4.1
7.0
12.8
14.1
12.3
13.2
16.7
16.7
18.4
4.7
5.2
4.1
4.2
3.9
3.8
10.6
2.0
1.2
1.8
.3
-7.5
-7.7
5.7
4.9
5.1
4.2
3.9
4.7
4.5
11.0
4.7
9.2
4.1
8.9
13.0
12.8
10.5
.5
.6
-.2
-.8
1.7
1.9
7.1
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
Austria
Belgium
Denmark
Finland
Trade-weighted measures 3
All 28 foreign economies
less Mexico, Israel
OECD 4
less Mexico, Korea 5
Europe
European Union
Asian NIEs
Rates of change based on compound rate method.
Dash means data not available.
1 1975-95.
2 Former West Germany.
3 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.
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, June 1997.
Table 4. Hourly compensation costs in national currency for production workers in manufacturing,
29 countries or areas, selected years, 1975-96
Country or area
1975
1980
1985
1990
1992
1993
1994
1995
1996
United States
6.36
9.87
13.01
14.91
16.09
16.51
16.87
17.19
17.74
Canada
Mexico
6.07
18
10.13
51
14.94
409
18.49
4440
20.59
6716
21.21
7.48
21.66
8.34
22.02
9.66
22.73
11.39
Australia
Hong Kong
Israel
Japan
4.30
3.73
1.44
889
7.43
7.50
19.42
1245
11.70
13.46
4.79
1512
16.74
24.91
17.24
1856
17.71
30.31
22.36
2065
18.37
33.19
24.97
2112
19.16
35.65
27.66
2154
20.32
37.30
31.73
2223
21.13
39.74
36.10
2289
157
2.65
2.00
1.97
15.17
583
5.48
3.20
3.58
36.13
1074
8.98
5.43
7.58
59.60
2623
13.98
6.85
14.05
105.68
4075
14.70
8.07
17.51
128.02
4531
14.79
8.49
20.20
137.00
5141
15.06
9.61
22.32
145.44
5710
15.41
10.39
24.45
154.26
6624
16.04
11.73
160.87
78.46
235.10
36.00
16.88
114.78
382.88
60.98
30.64
156.75
532.39
86.18
50.56
201.07
642.30
111.18
80.56
222.93
714.70
120.84
89.40
234.70
747.53
123.96
95.19
245.38
777.32
129.64
99.76
255.87
792.10
135.86
108.64
264.22
807.26
141.40
112.35
19.34
15.59
55
1.36
37.73
22.39
159
2.89
67.49
28.23
506
5.55
82.97
35.50
1064
7.10
89.41
39.67
1422
7.85
91.98
41.96
1610
8.27
94.48
43.63
1821
8.43
96.45
45.61
2062
8.62
98.96
47.96
8.82
3048
6966
14563
21258
24146
25175
25943
26911
27894
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
Austria
Belgium
Denmark
Finland
France
Germany 1
Greece
Ireland
Italy
Luxembourg
Netherlands
Norway
233
16.59
35.29
350
23.93
57.20
458
29.04
89.11
547
33.32
134.26
606
35.78
143.13
640
37.25
143.47
671
38.06
147.92
682
38.79
154.46
39.33
161.18
Portugal
Spain
Sweden
Switzerland
United Kingdom
40.26
145
29.73
15.72
1.52
103.28
422
52.91
18.57
3.25
263.37
792
83.12
23.71
4.84
538.11
1156
123.98
29.00
7.13
697.80
1369
143.26
32.66
8.17
724.15
1466
137.99
33.45
8.31
763.09
1525
145.55
34.06
8.40
804.35
1582
154.51
34.61
8.70
1684
164.73
35.03
9.09
Dash means data not available.
For currency units, see note to table 6.
1 Former West Germany.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
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, 1975-96
Country or area
1975-96
1975-80
1980-85
1985-90
1990-96
1993
1994
1995
1996
5.0
9.2
5.7
2.8
2.9
2.6
2.2
1.9
3.2
Canada
Mexico
6.5
36.0
10.8
23.2
8.1
51.6
4.4
61.1
3.5
17.0
3.0
11.4
2.1
11.5
1.7
15.8
3.2
17.9
Australia
Hong Kong
Israel
Japan
7.9
11.9
62.0
4.6
11.6
15.0
68.3
7.0
9.5
12.4
200.9
4.0
7.4
13.1
29.2
4.2
4.0
8.1
13.1
3.6
3.7
9.5
11.7
2.3
4.3
7.4
10.8
2.0
6.1
4.6
14.7
3.2
4.0
6.5
13.8
3.0
19.5
9.0
8.8
1/ 13.4
11.9
30.0
15.6
9.9
12.7
19.0
13.0
10.4
11.2
16.2
10.5
19.6
9.3
4.8
13.1
12.1
16.7
2.3
9.4
7.3
11.2
.6
5.2
15.4
7.0
13.5
1.8
13.2
10.5
6.2
11.1
2.3
8.1
9.5
6.1
16.0
4.1
12.9
4.3
Austria
Belgium
Denmark
Finland
6.0
6.1
6.7
9.4
7.9
10.2
11.1
12.7
6.4
6.8
7.2
10.5
5.1
3.8
5.2
9.8
4.7
3.9
4.1
5.7
5.3
4.6
2.6
6.5
4.6
4.0
4.6
4.8
4.3
1.9
4.8
8.9
3.3
1.9
4.1
3.4
France
8.1
14.3
12.3
4.2
3.0
2.9
2.7
2.1
2.6
United States
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
Germany 2
Greece
Ireland
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Trade-weighted measures 3
All 28 foreign economies
less Mexico, Israel
OECD 4
less Mexico, Korea 5
Europe
European Union
Asian NIEs
5.5
1/ 19.9
9.3
7.5
23.9
16.3
4.7
26.0
13.9
4.7
16.1
5.0
5.1
3.7
5.8
13.2
5.4
4.0
13.1
1.9
4.5
13.2
2.3
5.2
2.3
11.1
5.5
4.2
7.5
18.0
8.5
7.6
10.1
15.9
5.5
3.9
9.3
7.9
3.6
2.8
8.5
4.6
2.8
3.1
4.3
5.6
4.1
.2
3.1
4.8
2.2
3.1
3.7
1.6
1.9
4.4
3.7
1.4
4.4
1/ 16.2
12.4
8.5
3.9
8.9
20.7
23.8
12.2
3.4
16.4
20.6
13.4
9.5
5.0
8.3
15.4
7.9
8.3
4.1
8.1
6.5
4.9
3.2
4.1
3.8
7.1
-3.7
2.4
1.7
5.4
4.0
5.5
1.8
1.1
5.4
3.7
6.2
1.6
3.6
6.4
6.6
1.2
4.5
10.8
7.6
10.2
6.5
7.6
7.7
13.4
13.6
12.0
12.7
10.5
12.4
12.8
19.6
14.0
8.0
12.3
7.3
8.7
8.9
11.6
11.7
6.3
11.7
5.0
5.8
5.9
12.9
6.2
4.9
5.8
3.8
4.3
4.3
10.4
4.8
4.0
4.4
3.1
3.7
3.8
8.2
4.5
3.7
4.0
2.5
3.0
3.1
9.8
4.9
3.7
4.7
2.9
3.5
3.5
7.6
5.8
4.4
5.6
3.4
3.8
3.9
9.6
1/
Rates of change based on compound rate method.
Dash means data not available.
1 1975-95.
2 Former West Germany.
3 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.
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, June 1997.
Table 6. Exchange rates, 29 countries or areas, selected years, 1975-96
(National currency units per U.S. dollar)
Country or area
1975
1980
1985
1990
1992
1993
1994
1995
1996
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
1.209
1.290
1.366
1.373
1.364
Mexico
12.50
22.97
256.9
2813
3095
3.116
3.375
6.419
7.601
Australia
Hong Kong
Israel
Japan
.7647
4.939
.6390
296.7
.8772
4.976
5.124
225.7
1.428
7.791
1.179
238.5
1.281
7.790
2.016
145.0
1.360
7.740
2.459
126.8
1.471
7.736
2.830
111.1
1.367
7.729
3.011
102.2
1.350
7.736
3.011
93.96
1.277
7.735
3.288
108.8
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
484.0
.8254
2.371
7.050
38.00
607.4
1.027
2.141
16.53
36.02
870.0
2.010
2.200
27.16
39.85
707.8
1.677
1.813
40.06
26.92
780.6
1.859
1.629
43.83
25.16
802.7
1.847
1.616
48.32
26.42
803.5
1.685
1.527
49.42
26.47
771.3
1.524
1.417
51.25
26.50
804.5
1.454
1.410
27.47
Austria
Belgium
Denmark
Finland
17.40
36.69
5.735
3.665
12.93
29.20
5.629
3.719
20.68
59.34
10.60
6.197
11.33
33.42
6.190
3.830
10.99
32.15
6.037
4.487
11.64
34.58
6.486
5.725
11.41
33.43
6.356
5.234
10.08
29.47
5.600
4.376
10.59
30.97
5.801
4.595
France
Germany 1
Greece
Ireland
4.282
2.455
32.29
.4500
4.220
1.815
42.62
.4860
8.980
2.942
138.1
.9379
5.447
1.617
158.5
.6033
5.294
1.562
190.6
.5868
5.667
1.655
229.3
.6827
5.546
1.622
242.6
.6680
4.986
1.432
231.7
.6236
5.116
1.505
.6250
Italy
Luxembourg
Netherlands
Norway
652.4
36.78
2.523
5.214
855.1
29.24
1.985
4.936
1909
59.38
3.318
8.593
1198
33.42
1.822
6.254
1232
32.15
1.759
6.214
1573
34.60
1.858
7.098
1611
33.46
1.819
7.055
1629
29.48
1.604
6.336
1543
1.686
6.459
Portugal
Spain
Sweden
Switzerland
United Kingdom
25.45
57.39
4.142
2.581
.4501
50.05
71.64
4.229
1.675
.4300
172.1
170.0
8.603
2.455
.7708
142.7
102.0
5.923
1.390
.5605
135.1
102.4
5.826
1.406
.5662
161.1
127.5
7.796
1.478
.6660
165.9
133.9
7.716
1.367
.6528
149.9
124.6
7.141
1.181
.6335
126.7
6.708
1.236
.6407
1 Former West Germany.
Note: National currency units are United States, dollar; Canada, dollar; Mexico, old peso (1975-92),
new peso (1993-95); Australia, dollar; Hong Kong, dollar; Israel, shekel (1975-84), new shekel (1985-95);
Japan, yen; Korea, won; New Zealand, dollar; Singapore, dollar; Sri Lanka, rupee; Taiwan, dollar;
Austria, shilling; Belgium, franc; Denmark, krone; Finland, markkaa; France,
franc; Germany, mark;
Greece, drachma; Ireland, pound, Italy, lira; Luxembourg, franc; Netherlands, guilder; Norway, krone;
Portugal, escuado; Spain, peseta; Sweden, krona; Switzerland, franc; United Kingdom, pound.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
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, 1975-96
Country or area
1975-96
1975-80
1980-85
1985-90
1990-96
1993
1994
1995
1996
-
-
-
-
-
-
-
-
-
Canada
Mexico
-1.4
-26.3
-2.7
-11.5
-3.1
-38.3
3.2
-38.0
-2.6
-15.3
-6.3
-.7
-5.6
-7.7
-.5
-47.4
.7
-15.6
Australia
Hong Kong
Israel
Japan
-2.4
-2.1
-29.3
4.9
-2.7
-.1
-34.1
5.6
-9.3
-8.6
-66.3
-1.1
2.2
.0
-10.2
10.5
.1
.1
-7.8
4.9
-7.5
.1
-13.1
14.1
7.6
.1
-6.0
8.7
1.3
-.1
.0
8.8
5.7
.0
-8.4
-13.6
-2.4
-2.7
2.5
1/ -9.4
1.6
-4.4
-4.3
2.1
-15.7
1.1
-6.9
-12.6
-.5
-9.5
-2.0
4.2
3.7
3.9
-7.5
8.2
-2.1
2.4
4.3
-.3
-2.8
.6
.8
-9.3
-4.8
-.1
9.6
5.8
-2.2
-.2
4.2
10.6
7.8
-3.6
-.1
-4.1
4.8
.5
-3.5
2.4
.8
-.1
-1.1
6.1
4.7
.4
-.3
-9.0
-13.2
-11.9
-9.7
12.8
12.2
11.4
10.1
1.1
1.3
1.1
-3.0
-5.6
-7.0
-6.9
-21.6
2.0
3.4
2.0
9.4
13.2
13.4
13.5
19.6
-4.8
-4.8
-3.5
-4.8
-.8
2.4
1/ -9.4
-1.6
.3
6.2
-5.4
-1.5
-14.0
-9.2
-21.0
-12.3
10.5
12.7
-2.7
9.2
1.1
1.2
-.6
-6.6
-5.6
-16.9
-14.0
2.2
2.0
-5.5
2.2
11.2
13.3
4.7
7.1
-2.5
-4.9
-.2
-4.0
1.1
1.9
-1.0
-5.3
4.7
4.9
1.1
-14.8
-13.2
-9.8
-10.5
9.8
12.2
12.7
6.6
-4.1
1.3
-.5
-21.7
-7.1
-5.3
-12.5
-2.4
3.4
2.1
.6
-1.1
13.5
13.4
11.3
5.6
-4.9
-1.9
1/ -8.5
-3.7
-2.3
3.6
-1.7
-12.7
-4.3
-.4
9.0
.9
-21.9
-15.9
-13.2
-7.4
-11.0
3.8
10.8
7.8
12.0
6.6
-3.5
-2.1
2.0
-2.2
-16.1
-19.7
-25.3
-4.9
-15.0
-2.9
-4.8
1.0
8.1
2.0
10.7
7.5
8.1
15.7
3.0
-1.7
6.5
-4.4
-1.1
-2.3
.6
-2.4
-.5
1.0
-.3
-9.4
-5.8
-9.6
2.9
7.3
2.8
-1.2
.3
-1.4
-2.6
-2.6
-2.5
.4
1.3
.4
.3
5.3
.0
-4.9
-3.7
-5.3
United States
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
Austria
Belgium
Denmark
Finland
France
Germany 2
Greece
Ireland
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Trade-weighted measures 3
All 28 foreign economies
less Mexico, Israel
OECD 4
1/
less Mexico, Korea 5
Europe
European Union
Asian NIEs
.7
-.3
-.4
.0
1.3
2.0
1.7
-.5
-6.1
-11.7
-11.9
-4.2
7.9
10.3
10.3
4.9
.3
-.4
-.5
.2
-2.7
-10.9
-11.1
-2.3
1.4
1.7
1.4
1.1
5.8
9.2
8.9
2.6
-4.0
-2.1
-2.0
-2.3
Rates of change based on compound rate method.
1 1975-95.
2 Former West Germany.
3 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.
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, June 1997.
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 on 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. 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.
Austria. Excludes workers in establishments considered handicraft manufacturers. (All printing and publishing and miscellaneous
manufacturing establishments are classified in handicrafts.) 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. Refers to former West Germany. Excludes workers in establishments considered handicraft manufacturers. In 1990,
handicraft employment 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, compensation 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, Korea,
Singapore, and Taiwan.
The trade weighted measures relate to all the countries or areas covered in the series. 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
and
economic group
1992
trade
share
Canada
Mexico
19.2
7.6
Australia
Hong Kong
Israel
Japan
1.4
2.0
.8
15.8
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
3.4
.3
2.4
.1
4.4
Austria
Belgium
Denmark
Finland
France
Germany 1/
.3
1.5
.3
.2
3.2
5.4
1/
2/
Country or area
and
economic group
1992
trade
share
Greece
Ireland
Italy
Luxembourg
Netherlands
Norway
.1
.6
2.3
.1
1.9
.3
Portugal
Spain
Sweden
Switzerland
United Kingdom
.2
.8
.8
1.0
4.4
Economic groups
28 foreign
economies
OECD 2/
Europe
European Union
Asian NIEs
80.8
71.1
23.4
22.1
12.2
Former West Germany.
Organization for Economic Cooperation and Development.
Data limitations
Because compensation is partly estimated, the statistics should not be considered as precise measures of comparative
compensation 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 Germany and 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.