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USDL: 98-376
For Release: 10:00 A.M. EST
Wednesday, September 16, 1998
INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 1997
The gap in hourly compensation costs for manufacturing production
workers between the United States and the average for 28 foreign economies
widened in 1997, reflecting the U.S. dollar's appreciation against many
foreign currencies. The average cost level for the 28 foreign economies
studied by the Bureau of Labor Statistics, U.S. Department of Labor, was
16 percent lower than U.S. costs, when weighted by their importance in
trade with the United States. The gap was only 5 percent in 1995 - the
smallest difference in the 1975-1997 period.
While hourly compensation costs in Europe and Japan remained above the
U.S. level in 1997 - 12 and 6 percent, respectively - these cost differences
narrowed significantly from the previous year. Costs in Canada declined
slightly, lowering their level to 91 percent of U.S. costs. (See charts 1 and
2.) Hourly compensation costs for manufacturing production workers in the
Asian newly industrializing economies (NIEs) declined for the first time since
the series began in 1975. Costs in the Asian NIEs declined to 36 percent
of the U.S. level. In contrast, manufacturing compensation costs in Mexico
posted a strong increase over the year, yet were still only one-tenth
of U.S. costs.
Chart 1. Hourly compensation costs in U.S. dollars for
Production workers in manufacturing, 1975-97
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 June 1998. The 1997 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.
END OF BOX (A NOTE ON THE MEASURES)
Comparative compensation costs in U.S. dollars
Hourly compensation costs for manufacturing production workers in the
United States increased 3.1 percent from their 1996 level to $18.24 in
1997. Among the 28 foreign economies studied, only four - Mexico, Hong
Kong (Special Administrative Region of China), Israel, and the United
Kingdom - had increases in 1997 in hourly compensation costs measured in
U.S. dollars.
Hourly compensation costs in Canada declined 0.7 percent in U.S. dollar
terms. Although Mexico's costs increased a sharp 13.6 percent, their
level, at $1.75, was only about 10 percent of U.S. costs. (See tables A
and 2.)
Differences between hourly compensation cost levels in
European countries and the cost level in the United States had
record highs in 1995. Measured in U.S. dollars, at that time,
Japan were 39 percent above U.S. costs, and the trade-weighted
level for the European countries studied was 29 percent higher
U.S. level. By 1997, these cost gaps had shrunk considerably.
Japan and many
reached
costs in
average cost
than the
Declines in hourly compensation costs measured in U.S. dollars in Japan
and Europe substantially reduced the gaps with U.S. costs, which have
grown. In Japan, hourly compensation costs declined 7.4 percent, following
a 12.2 percent drop in 1996. This left their cost level just 6 percent
above U.S. costs. The trade-weighted average cost level in U.S. dollar
terms for the European countries studied declined 6.1 percent in 1997,
leaving it 12 percent above U.S. costs.
The United Kingdom, where costs increased 9.5 percent, was the only
European country in which compensation costs increased in 1997 in U.S.
dollar terms. The pound was the only foreign currency that appreciated
against the dollar.
The largest cost reductions among the economies studied occurred in
several European countries. Hourly compensation costs in Switzerland
dropped 14.6 percent, and five other European economies had declines in
compensation costs of 10 percent or more. Hourly compensation costs in
Germany fell 11 percent. Thus, by 1997, German costs had declined to 55
percent above U.S. costs from 87 percent above U.S. costs in 1995.
Despite these declines, 1997 hourly compensation cost levels tended to
be higher in Europe than in the other economies studied. For example, at
more than 11/2 times the U.S. cost level, Germany's 1997 compensation costs
in U.S. dollars continued to exceed those of all the other economies
studied.
Among the Asian NIEs - Hong Kong SAR, Korea, Singapore, and Taiwan - the
trade-weighted average level of hourly compensation costs measured in U.S.
dollars declined between 1996 and 1997 for the first time in the history of
the comparative series. The decrease of 2.5 percent brought trade-weighted
average costs in the Asian NIEs to 36 percent of the U.S. cost level. A
major factor contributing to the decline of the trade-weighted average was
a 10.8 percent drop in U.S. dollar-based hourly compensation costs in
Korea. (Hong Kong became a Special Administrative Region (SAR) of China in
July 1997.)
Overall, the trade-weighted average cost level for the 28 foreign
economies studied decreased 2.4 percent in 1997. The foreign cost level of
84 percent of U.S. costs in 1997 was a sharp reduction from the record high
level of 95 percent reached in 1995.
BOX: (Data for Germany)
Data for Germany appearing in this news release relate to the former West
Germany. BLS has prepared preliminary estimates of hourly compensation
costs in the former East Germany and Unified Germany. These calculations
indicate that, in 1997, hourly compensation costs for production workers in
manufacturing in the former East Germany were 64 percent of costs in the
former West Germany. Hourly compensation costs in U.S. dollars were
$27.36 in Unified Germany as a whole in 1997, slightly below the level in
the former West Germany. 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.
END OF BOX (Data for Germany)
Chart 2. Indexes of hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1997 (U.S. = 100)
PRINTED COPY CONTAINS CHART AT THIS POINT.
Table A.
Percent change, 1996-97
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.
dollars
United States
Canada
Mexico
3.1
.8
18.7
-1.5
-4.0
3.1
-.7
13.6
Australia
Hong Kong SAR 1
Israel
Japan
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
2.0
5.7
15.0
3.0
5.5
3.6
4.4
4.1
-5.1
-.1
-4.7
-10.1
-15.4
-3.6
-5.1
-4.6
-3.1
5.4
9.6
-7.4
-10.8
-.1
-1.0
-.7
2.5
-13.3
-11.1
Austria
Belgium
Denmark
Finland
France
Germany 2
Greece
Ireland
1.9
4.1
2.9
3.0
2.5
3.3
-13.5
-12.2
-11.6
-12.4
-13.3
-5.2
-11.9
-8.7
-9.0
-9.8
-11.0
-2.0
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
4.3
3.5
3.9
7.8
4.0
4.0
.2
4.3
-9.4
-13.7
-8.8
-12.0
-13.5
-12.3
-14.8
4.9
-5.6
-10.7
-5.3
-5.2
-10.0
-8.7
-14.6
9.5
Trade-weighted measures 3
All 28 foreign economies
OECD 4
less Mexico, Korea 5
Europe
European Union
Asian NIEs
4.4
4.3
2.4
3.3
3.4
4.8
-6.5
-6.9
-6.8
-9.1
-8.8
-7.0
-2.4
-2.9
-4.6
-6.1
-5.7
-2.5
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Germany refers to the former West Germany.
3 The 1996-97 percent changes for the trade-weighted measures are based
upon the changes for the 25 countries or areas for which 1997 data
are available.
4 OECD refers to the Organization for Economic Cooperation and
Development.
5 Mexico joined the OECD in 1994, and Korea joined in 1996.
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).
Measured in national currency terms, only six of the 28 foreign
economies studied had 1997 increases in hourly compensation costs that were
moderately to significantly lower than the U.S. increase of 3.1 percent.
Among these were two countries - Canada and Switzerland - that had
increases of less than 1 percent.
Canada's 0.8 percent rise in hourly compensation costs represented a
substantial slowing from it's 3.2 percent increase the previous year.
While Mexico's 18.7 percent increase in 1997 was the largest of the year
among the economies studied, it was in line with that country's average
rate of hourly compensation cost growth throughout the 1990s.
Hourly compensation cost growth in Japan and the trade-weighted average
increase for the European countries were 3.0 percent and 3.3 percent,
respectively, between 1996 and 1997 when measured in national currencies,
about matching the U.S. rate of increase (3.1 percent). While most
European countries had growth in compensation costs in the range of 2 to 4
percent, compensation costs in Switzerland edged up a slight 0.2 percent,
and costs in Portugal continued to increase at a rapid rate (7.8 percent).
Between 1996 and 1997, the trade-weighted average increase in hourly
compensation costs measured in national currency terms in the Asian NIEs
was 4.8 percent, substantially below the 9.4 percent increase of the
previous year and the average rate of compensation growth for the region
from 1990 forward. The causes of this slowing were significant reductions
in hourly compensation growth in Korea and Singapore. Korean compensation
costs increased 5.5 percent in 1997, down from 15.8 percent the previous
year and well below Korea's average rate of increase of almost 15 percent
during the 1990s. Similarly, Singapore's cost increase of 4.4 percent in
1997 represented an abrupt deceleration from the 12.9 percent growth rate
of the previous year and also was below that country's average rate of
increase for the decade thus far.
The trade-weighted average increase in hourly compensation costs
measured in national currency terms for all 28 foreign economies was 4.4
percent in 1997, compared with 5.7 percent in 1996 and a 5.9 percent
average rate since 1990.
Exchange rates
For the second consecutive year, the currencies of most of the foreign
economies studied depreciated relative to the U.S. dollar. In fact, the
declines in currency values were more widespread and, in general, larger in
1997 than in the previous year.
Among the currencies of the foreign economies studied, only the British
pound appreciated against the dollar between 1996 and 1997, rising 4.9
percent. Excluding the Hong Kong dollar, the value of which is pegged to
the U.S. dollar, currency values for the other economies fell over the year
at rates ranging from 1.5 percent in Canada to more than 15 percent in
Korea.
The Japanese yen dropped 10.1 percent relative to the dollar in 1997
after falling 13.6 percent the previous year. Thus, the yen's value
declined 22 percent during the period from 1995 to 1997.
The trade-weighted average value for the European currencies decreased
9.1 percent in 1997. The trade-weighted average rate takes account of the
British pound's appreciation. In fact, most of the European currencies
declined between 11 and 13.5 percent over the year, with the Swiss Franc
falling a steep 14.8 percent.
Except for Korea, where the won fell 15.4 percent, currency values in
the Asian NIEs (omitting Hong Kong SAR) and the other Pacific Rim economies
of Australia and New Zealand declined moderately, in the range of 3.5 to 5
percent.
The weakness of the foreign currencies relative to the U.S. dollar in
1997 offset increases in hourly compensation costs measured 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 4.4 percent between
1996 and 1997 in national currency terms, but dropped 2.4 percent when
measured in U.S. dollars; and compensation costs in Japan and Europe
increased about 3 percent measured in national currencies, but fell 7.4
percent and 6.1 percent, respectively, in U.S. dollar terms.
Korean compensation costs increased 5.5 percent in national currency,
but fell 10.8 percent in U.S. dollars. The large decline in U.S. dollarbased compensation costs in Korea contributed substantially to the decrease
in trade-weighted average hourly compensation costs measured in U.S.
dollars for the Asian NIEs.
Recent exchange rates: The 1997 trends in exchange rates have, in general,
continued during 1998. As of late August 1998, the currencies of most of
the economies studied had continued to decline against the U.S. dollar from
their 1997 average levels. The declines were largest in Asia and the
Pacific Rim economies. The Korean won had dropped by 27 percent, the
Japanese yen was down 16 percent, and the other currencies of the region
(omitting Hong Kong SAR) had declined 16 percent or more from their 1997
average levels.
Similarly, the Canadian dollar (down 11 percent) and the Mexican peso
(down 19 percent) have also depreciated relative to the dollar more rapidly
in 1998 through late August than in 1997.
Currency values in most European countries declined less rapidly than
did those in the Asia-Pacific region and North America. The trade-weighted
average currency value for the European countries in late August was 3.5
percent below its 1997 level.
At August 1998 exchange rates, assuming underlying compensation trends
in all countries were similar to U.S. trends between 1997 and August 1998,
hourly compensation costs in Japan would have fallen from 106 percent of
U.S. costs to 89 percent of the U.S. level; costs in the Asian NIEs would
have fallen from 36 percent of U.S. costs to 30 percent ; the European
trade-weighted average would have declined from 112 percent of U.S. costs
to 108 percent; and the trade-weighted average for all 28 economies covered
would have decreased from 84 percent to 75 percent of the U.S. cost level.
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
1997.
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/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 20212-0001 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.
BOX: REVISED MEASURES
Revised underlying data on average hourly earnings or additional
compensation costs were incorporated for 16 of the countries covered in
this news release.
For 10 countries, revised data reflected changes in survey methodology
or BLS calculation methods. The resulting differences in hourly
compensation cost levels for 1996 were more than one percent for four
countries-Mexico, Taiwan, France, and Italy.
Data from the Canadian survey of employment, payrolls, and hours were
revised back to 1983 for selected industries, but, for total manufacturing,
the average hourly earnings were changed only for 1993. The revisions are
part of an ongoing re-engineering of the survey, and future revisions are
possible.
For Mexico, a new monthly industrial survey with expanded industry
coverage resulted in a higher earnings trend since 1994. For Japan,
monthly labor survey benchmarks made every three years were incorporated in
the BLS calculations.
Earnings survey data published on new industrial classification systems
were incorporated for four other countries. New series were linked to old
for Sweden and the United Kingdom, while old series were linked to new for
Germany. A link was not possible for Spain.
Labor cost surveys for 1989-96 were incorporated for Taiwan.
Compensation cost levels were revised back to 1993 for both Italy and
Sweden to incorporate new information on holiday and vacation pay and
employer social insurance expenditures for Italy, and a different
calculation for sick leave pay for Sweden.
For France, revised cost levels back to 1989 reflect an adjustment of
the bonus payments as reported in the 1992 European Union harmonized labor
cost survey. A change in collection procedures in the 1992 survey resulted
in a discontinuity in the data on irregular versus regular bonuses; BLS
held constant the bonus ratios from the previous 1988 labor cost survey.
END OF BOX (REVISED MEASURES)
Table 1. Indexes of hourly compensation costs for production workers in
manufacturing, 29 countries or areas and selected economic groups,
selected years, 1975-97
(Index, United States = 100)
______________________________________________________________________________
Country or area
1975 1980 1985 1990 1993 1994 1995 1996 1997
______________________________________________________________________________
United States ..........
100
100
100
100
100
100
100
100
100
Canada .................
Mexico .................
94
23
88
22
84
12
106
11
100
15
94
15
93
9
94
9
91
10
Australia ..............
Hong Kong SAR 1 ........
Israel .................
Japan ..................
88
12
35
47
86
15
38
56
63
13
31
49
88
21
57
86
76
26
53
116
83
27
54
127
88
28
61
139
93
29
62
118
88
30
66
106
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
34
49
32
3
32
38
53
37
3
33
42
59
43
3
34
46
62
47
3
34
40
60
45
32
................
................
................
................
71
101
99
72
90
133
110
83
58
69
62
63
119
129
121
141
122
130
116
101
128
137
120
113
147
155
140
140
139
146
136
133
120
125
121
118
France .................
Germany 2 ..............
Greece .................
Ireland ................
71
99
27
48
91
124
38
60
58
73
28
46
104
147
45
78
102
153
44
72
105
160
46
73
116
187
53
79
113
180
54
78
99
155
74
Italy ..................
Luxembourg .............
Netherlands ............
Norway .................
73
102
103
106
83
122
122
117
59
60
67
80
117
112
121
144
96
114
122
122
94
121
123
124
94
136
140
142
100
127
130
142
92
113
130
Portugal ...............
Spain ..................
Sweden .................
Switzerland ............
United Kingdom .........
25
40
113
96
53
21
60
127
112
77
12
36
74
74
48
25
76
140
140
85
27
70
107
137
75
27
68
110
148
76
31
75
125
170
80
32
76
138
160
80
29
67
122
133
85
Austria
Belgium
Denmark
Finland
Trade-weighted measures 3
All 28 foreign economies .. 60
67
52
83
87
89
95
91
84
OECD 4 .................... 67
74
57
90
94
96
103
98
90
less Mexico, Korea 5 .... 76
84
65
104
108
110
119
112
103
Europe .................... 80
100
61
116
111
115
129
125
112
European Union ............ 79
100
60
115
110
113
127
124
111
Asian NIEs ................ 8
12
13
25
31
34
37
39
36
______________________________________________________________________________
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
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, September 1998.
Table 2. Hourly compensation costs in U.S. dollars for production workers in
manufacturing, 29 countries or areas and selected economic groups,
selected years, 1975-97
_________________________________________________________________________________________
Country or area
1975
1980
1985
1990
1993
1994
1995
1996
1997
_________________________________________________________________________________________
United States ..........
$6.36
Canada .................
Mexico .................
5.96
1.47
8.67
2.21
10.94
1.59
15.84
1.58
16.43
2.40
15.85
2.47
16.04
1.51
16.66
1.54
16.55
1.75
Australia ..............
Hong Kong SAR 1 ........
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
12.49
4.29
8.82
19.21
14.02
4.61
9.19
21.35
15.05
4.82
10.54
23.82
16.52
5.14
10.99
20.91
16.00
5.42
12.05
19.37
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
5.64
8.01
5.25
.42
5.23
6.40
8.93
6.29
.45
5.55
7.29
10.11
7.33
.48
5.92
8.09
11.03
8.32
.48
5.93
7.22
11.02
8.24
5.89
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
19.17
18.04
21.03
20.16
21.44
19.11
16.63
21.51
23.07
20.30
19.06
25.21
26.65
24.07
24.14
24.66
25.89
24.11
23.56
21.92
22.82
22.02
21.44
................
................
................
................
$9.87 $13.01 $14.91 $16.51 $16.87 $17.19 $17.70 $18.24
France .................
Germany 2 ..............
Greece .................
Ireland ................
4.52
6.31
1.69
3.03
8.94
12.25
3.73
5.95
7.52
9.53
3.66
5.92
15.49
21.88
6.76
11.66
16.79
25.32
7.23
11.89
17.63
27.03
7.73
12.39
20.01
32.22
9.17
13.57
19.92
31.79
9.59
13.85
17.97
28.28
13.57
Italy ..................
Luxembourg .............
Netherlands ............
Norway .................
4.67
6.50
6.58
6.77
8.15
12.03
12.06
11.59
7.63
7.81
8.75
10.37
17.45
16.74
18.06
21.47
15.80
18.74
20.08
20.21
15.89
20.33
20.80
20.97
16.21
23.35
24.02
24.38
17.73
22.55
23.08
25.05
16.74
20.61
23.72
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
11.38
20.93
20.86
12.70
4.50
11.62
17.59
22.63
12.41
4.60
11.54
18.62
24.91
12.80
5.37
12.88
21.44
29.30
13.67
5.58
13.51
24.37
28.34
14.13
5.29
12.16
22.24
24.19
15.47
Trade-weighted measures 3
All 28 foreign economies .. 3.83
6.60
6.74 12.33 14.32 15.01 16.38 16.09 15.25
OECD 4 .................... 4.25
7.30
7.39 13.46 15.55 16.27 17.75 17.37 16.40
less Mexico, Korea 5 .... 4.82
8.30
8.48 15.51 17.78 18.57 20.39 19.90 18.77
Europe .................... 5.10
9.90
7.96 17.31 18.36 19.33 22.10 22.19 20.46
European Union ............ 5.03
9.83
7.85 17.09 18.14 19.05 21.75 21.87 20.24
Asian NIEs ................
.52
1.17
1.65
3.72
5.19
5.78
6.40
6.87
6.65
_________________________________________________________________________________________
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
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, September 1998.
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, 1975-97
________________________________________________________________________________________________
Country or area
1975-97 1975-80 1980-85 1985-90 1990-97
1994
1995
1996
1997
________________________________________________________________________________________________
United States ..........
4.9
9.2
5.7
2.8
2.9
2.2
1.9
3.0
3.1
Canada .................
Mexico .................
4.8
.8
7.8
8.5
4.8
-6.4
7.7
-.1
.6
1.5
-3.5
2.9
1.2
-38.9
3.9
2.0
-.7
13.6
Australia ..............
Hong Kong SAR 1 ........
Israel .................
Japan ..................
4.9
9.3
7.9
8.8
8.5
14.7
11.0
13.0
-.6
2.8
1.4
2.8
9.8
13.1
16.1
15.1
2.9
7.8
5.0
6.1
12.2
7.5
4.2
11.1
7.3
4.6
14.7
11.6
9.8
6.6
4.3
-12.2
-3.1
5.4
9.6
-7.4
Korea ..................
New Zealand ............
Singapore ..............
Sri Lanka ..............
Taiwan .................
15.2
5.8
10.9
2 2.6
13.0
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
10.0
4.1
11.8
6.0
13.5
11.5
19.8
7.1
6.1
13.9
13.2
16.5
6.7
6.7
11.0
9.1
13.5
.0
.2
-10.8
-.1
-1.0
-.7
................
................
................
................
7.5
5.9
5.9
7.2
14.5
15.4
11.5
12.3
-3.1
-7.3
-5.6
-.2
18.6
16.4
17.3
20.8
3.1
2.5
2.9
.3
6.7
7.6
6.2
14.6
17.2
15.5
18.6
26.7
-2.2
-2.9
.2
-2.4
-11.1
-11.9
-8.7
-9.0
France .................
Germany 3 ..............
Greece .................
Ireland ................
6.5
7.1
8.6
7.1
14.6
14.2
17.2
14.4
-3.4
-4.9
-.4
-.1
15.5
18.1
13.1
14.5
2.1
3.7
2.2
5.0
6.8
6.9
4.2
13.5
19.2
18.6
9.5
-.4
-1.3
4.6
2.1
-9.8
-11.0
-2.0
6.0
6.1
5.3
5.9
11.8
13.1
12.9
11.4
-1.3
-8.3
-6.2
-2.2
18.0
16.5
15.6
15.7
-.6
1.9
1.4
.6
8.5
3.6
3.8
2.0
14.9
15.5
16.3
9.4
-3.4
-3.9
2.7
-5.6
-10.7
-5.3
5.6
7.4
5.3
6.5
7.2
5.4
18.4
11.7
12.7
17.5
-5.8
-4.6
-5.0
-2.7
-3.7
19.8
19.6
16.7
16.6
15.2
5.0
1.0
.9
2.1
2.9
2.2
-.7
5.9
10.1
3.1
16.7
11.6
15.1
17.6
6.8
3.9
4.9
13.7
-3.3
3.4
-5.2
-10.0
-8.7
-14.6
9.5
Austria
Belgium
Denmark
Finland
Italy ..................
Luxembourg .............
Netherlands ............
Norway .................
Portugal ...............
Spain ..................
Sweden .................
Switzerland ............
United Kingdom .........
2
2
Trade-weighted measures 4
All 28 foreign economies .. 6.9
12.5
1.0
12.8
3.6
5.0
4.6
.4
-2.4
less Mexico, Israel ... 7.6
13.0
1.7
14.1
3.8
5.2
9.0
.1
-4.2
OECD 5 .................... 6.3
12.0
.1
12.3
3.0
4.4
3.9
-.3
-2.9
less Mexico, Korea 6 .... 6.5
11.8
.6
13.2
2.8
4.0
8.8
-1.2
-4.6
Europe .................... 6.6
14.5
-4.1
16.7
2.3
4.8
13.1
1.3
-6.1
European Union ............ 6.6
14.6
-4.1
16.7
2.4
4.6
12.9
1.4
-5.7
Asian NIEs ................ 12.6
18.9
7.0
18.4
8.5
11.1
10.3
6.9
-2.5
________________________________________________________________________________________________
Rates of change based on compound rate method.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2
3
4
5
6
1975-96.
Former West Germany.
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.
Organization for Economic Cooperation and Development.
Mexico joined the OECD in 1994, and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, September 1998.
Table 4. Hourly compensation costs in national currency for production workers in
manufacturing, 29 countries or areas, selected years, 1975-97
_____________________________________________________________________________________________
Country or area
1975
1980
1985
1990
1993
1994
1995
1996
1997
_____________________________________________________________________________________________
United States ........
6.36
9.87
13.01
14.91
16.51
16.87
17.19
17.70
18.24
Canada ...............
Mexico ...............
6.07
18
10.13
51
14.94
409
18.49
4440
21.20
7.48
21.66
8.34
22.02
9.69
22.73
11.68
22.92
13.86
Australia ............
Hong Kong SAR 1 ......
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
18.37
33.19
24.97
2134
19.16
35.65
27.66
2182
20.32
37.30
31.73
2238
21.09
39.74
36.14
2275
21.52
41.99
41.55
2344
Korea ................
New Zealand ..........
Singapore ............
Sri Lanka ............
Taiwan ...............
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
4531
14.79
8.49
20.20
138.27
5141
15.06
9.61
22.32
146.79
5620
15.41
10.39
24.45
156.83
6506
16.04
11.73
26.49
162.87
6862
16.62
12.25
169.48
.............. 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
640.60
111.65
80.56
234.70
741.27
123.96
95.19
245.38
771.23
129.00
99.76
254.07
785.47
134.77
105.65
261.18
801.77
139.86
108.24
267.62
817.19
145.54
111.40
Austria
Belgium
Denmark
Finland
France ...............
Germany 2 ............
Greece ...............
Ireland ..............
19.34
15.48
55
1.36
37.73
22.23
159
2.89
67.49
28.04
506
5.55
84.38
35.37
1071
7.03
95.14
41.90
1659
8.12
97.76
43.84
1876
8.28
99.76
46.14
2124
8.46
101.91
47.85
2309
8.66
104.94
49.06
8.95
Italy ................
Luxembourg ...........
Netherlands ..........
3048
239
16.59
6966
352
23.93
14563
464
29.04
20900
559
32.90
24858
648
37.32
25591
680
37.84
26398
688
38.52
27352
698
38.91
28528
40.26
Norway ...............
35.29
57.20
89.11
134.26
143.47
147.92
154.44
161.78
168.10
Portugal ............. 40.26 103.28 263.37 538.11 724.15 763.09 804.35 860.39 927.61
Spain ................
145
422
792
1161
1481
1545
1604
1712
1781
Sweden ............... 29.73
52.91
83.12 123.98 137.16 143.64 153.14 163.46 169.99
Switzerland .......... 15.72
18.57
23.71
29.00
33.45
34.06
34.61
35.03
35.10
United Kingdom .......
1.52
3.25
4.84
7.12
8.27
8.36
8.66
9.05
9.44
_____________________________________________________________________________________________
For currency units, see note to table 6.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
Source: U.S. Department of Labor, Bureau of Labor Statistics, September 1998.
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, 1975-97
________________________________________________________________________________________________
Country or area
1975-97 1975-80 1980-85 1985-90 1990-97
1994
1995
1996
1997
________________________________________________________________________________________________
United States ..........
4.9
9.2
5.7
2.8
2.9
2.2
1.9
3.0
3.1
Canada .................
Mexico .................
6.2
35.3
10.8
23.2
8.1
51.6
4.4
61.1
3.1
17.7
2.2
11.5
1.7
16.2
3.2
20.5
.8
18.7
Australia ..............
Hong Kong SAR 1 ........
Israel .................
Japan ..................
7.6
11.6
59.5
4.5
11.6
15.0
68.3
7.0
9.5
12.4
200.9
4.0
7.4
13.1
29.2
4.2
3.7
7.7
13.4
3.4
4.3
7.4
10.8
2.2
6.1
4.6
14.7
2.6
3.8
6.5
13.9
1.7
2.0
5.7
15.0
3.0
Korea ..................
New Zealand ............
Singapore ..............
Sri Lanka ..............
Taiwan .................
18.7
8.7
8.6
2 13.2
11.6
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
14.7
2.5
8.7
7.0
13.5
1.8
13.2
10.5
6.2
9.3
2.3
8.1
9.5
6.8
15.8
4.1
12.9
8.3
3.9
5.5
3.6
4.4
4.1
................
................
................
................
5.7
5.8
6.6
9.0
7.9
10.2
11.1
12.7
6.4
6.8
7.2
10.5
5.1
3.8
5.3
9.8
4.2
3.5
3.9
4.7
4.6
4.0
4.1
4.8
3.5
1.8
4.5
5.9
2.8
2.1
3.8
2.5
2.5
1.9
4.1
2.9
France .................
Germany 3 ..............
8.0
5.4
14.3
7.5
12.3
4.8
4.6
4.8
3.2
4.8
2.8
4.6
2.0
5.2
2.2
3.7
3.0
2.5
Austria
Belgium
Denmark
Finland
Greece .................
Ireland ................
Italy ..................
Luxembourg .............
Netherlands ............
Norway .................
2 19.5
8.9
23.7
16.3
26.1
13.9
16.2
4.8
3.5
13.1
2.0
13.2
2.2
8.7
2.4
3.3
10.7
5.2
4.1
7.4
18.0
8.1
7.6
10.1
15.9
5.7
3.9
9.3
7.5
3.8
2.5
8.5
4.5
2.9
3.3
2.9
4.9
1.4
3.1
3.2
1.2
1.8
4.4
3.6
1.5
1.0
4.8
4.3
3.5
3.9
15.3
12.1
8.2
3.7
8.7
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
8.0
8.1
6.3
4.6
2.8
4.1
5.4
4.3
4.7
1.8
1.1
5.4
3.8
6.6
1.6
3.6
7.0
6.7
6.7
1.2
4.5
7.8
4.0
4.0
.2
4.3
2
Portugal ...............
Spain ..................
Sweden .................
Switzerland ............
United Kingdom .........
Trade-weighted measures 4
All 28 foreign economies .. 10.5
13.6
14.0
11.7
5.9
4.6
4.8
5.7
4.4
less Mexico, Israel ... 7.4
12.0
8.0
6.3
4.6
3.8
3.5
4.0
2.8
OECD 5 .................... 10.0
12.7
12.3
11.7
5.6
4.1
4.5
5.4
4.3
less Mexico, Korea 6 .... 6.3
10.5
7.3
5.0
3.6
2.6
2.7
2.9
2.4
Europe .................... 7.4
12.4
8.7
5.8
4.1
3.1
3.5
3.4
3.3
European Union ............ 7.5
12.8
8.9
5.9
4.2
3.1
3.6
3.5
3.4
Asian NIEs ................ 13.0
19.6
11.6
12.9
9.6
9.8
7.4
9.4
4.8
________________________________________________________________________________________________
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 Former West Germany.
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, September 1998.
Table 6. Exchange rates, 29 countries or areas, selected years, 1975-97
(National currency units per U.S. dollar)
____________________________________________________________________________________
Country or area
1975
1980
1985
1990
1993
1994
1995
1996
1997
____________________________________________________________________________________
United States ........ 1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
Canada ............... 1.017
Mexico ............... 12.50
1.169
22.97
1.366
256.9
1.167
2813
1.290
3.116
1.366
3.375
1.373
6.419
1.364
7.601
1.385
7.918
Australia ............
Hong Kong SAR 1 ......
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
1.471
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
1.345
7.743
3.449
121.0
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
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
55.27
27.47
950.8
1.509
1.486
28.78
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
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
5.800
4.595
12.21
35.81
6.609
5.196
France ...............
Germany 2 ............
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
5.667
1.655
229.3
.6827
5.546
1.622
242.6
.6680
4.986
1.432
231.7
.6236
5.116
1.505
240.7
.6250
5.839
1.735
.6595
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
1573
34.60
1.858
7.098
1611
33.46
1.819
7.055
1629
29.48
1.604
6.336
1543
30.96
1.686
6.459
1704
1.953
7.086
Portugal ............. 25.45 50.05 172.1 142.7 161.1 165.9 149.9 154.3 175.4
Spain ................ 57.39 71.64 170.0 102.0 127.5 133.9 124.6 126.7 146.5
Sweden ............... 4.142 4.229 8.603 5.923 7.796 7.716 7.141 6.708 7.645
Switzerland .......... 2.581 1.675 2.455 1.390 1.478 1.367 1.181 1.236 1.451
United Kingdom ....... .4501 .4300 .7708 .5605 .6660 .6528 .6335 .6407 .6106
____________________________________________________________________________________
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
Note: National currency units are: United States, dollar; Canada, dollar;
Mexico, old peso (1975-92), new peso (1993-97); Australia, dollar; Hong
Kong, dollar; Israel, shekel (1975-84), new shekel (1985-97); 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, September 1998.
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, 1975-97
________________________________________________________________________________________________
Country or area
1975-97 1975-80 1980-85 1985-90 1990-97
1994
1995
1996
1997
________________________________________________________________________________________________
United States ..........
-
-
-
-
-
-
-
-
-
Canada .................
Mexico .................
-1.4
-25.4
-2.7
-11.5
-3.1
-38.3
3.2
-38.0
-2.4
-13.7
-5.6
-7.7
-.5
-47.4
.7
-15.6
-1.5
-4.0
Australia ..............
Hong Kong SAR 1 ........
Israel .................
Japan ..................
-2.5
-2.0
-32.3
4.2
-2.7
-.1
-34.1
5.6
-9.3
-8.6
-66.3
-1.1
2.2
.0
-10.2
10.5
-.7
.1
-7.4
2.6
7.6
.1
-6.0
8.7
1.3
-.1
.0
8.8
5.7
.0
-8.4
-13.6
-5.1
-.1
-4.7
-10.1
Korea ..................
New Zealand ............
Singapore ..............
Sri Lanka ..............
Taiwan .................
-3.0
-2.7
2.1
2 -9.3
1.3
-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
-4.1
1.5
2.9
-.9
-.1
9.6
5.8
-2.2
-.2
4.2
10.6
7.8
-3.6
-.1
-4.1
4.8
.5
-7.3
-3.5
-15.4
-3.6
-5.1
-4.6
................
................
................
................
1.6
.1
-.6
-1.6
6.1
4.7
.4
-.3
-9.0
-13.2
-11.9
-9.7
12.8
12.2
11.4
10.1
-1.1
-1.0
-.9
-4.3
2.0
3.4
2.0
9.4
13.2
13.4
13.5
19.6
-4.8
-4.8
-3.4
-4.8
-13.3
-13.5
-12.2
-11.6
France .................
Germany 3 ..............
Greece .................
Ireland ................
-1.4
1.6
2 -9.1
-1.7
.3
6.2
-5.4
-1.5
-14.0
-9.2
-21.0
-12.3
10.5
12.7
-2.7
9.2
-1.0
-1.0
-1.3
2.2
2.0
-5.5
2.2
11.2
13.3
4.7
7.1
-2.5
-4.9
-3.7
-.2
-12.4
-13.3
-5.2
-4.3
.8
1.2
-1.4
-5.3
4.7
4.9
1.1
-14.8
-13.2
-9.8
-10.5
9.8
12.2
12.7
6.6
-4.9
-1.0
-1.8
-2.4
3.4
2.1
.6
-1.1
13.5
13.4
11.3
5.6
-4.8
-4.9
-1.9
-9.4
-13.7
-8.8
-8.4
-4.2
-2.7
2.7
-12.7
-4.3
-.4
9.0
-21.9
-15.9
-13.2
-7.4
3.8
10.8
7.8
12.0
-2.9
-5.0
-3.6
-.6
-2.9
-4.8
1.0
8.1
10.7
7.5
8.1
15.7
-2.9
-1.7
6.5
-4.4
-12.0
-13.5
-12.3
-14.8
Austria
Belgium
Denmark
Finland
Italy ..................
Luxembourg .............
Netherlands ............
Norway .................
Portugal ...............
Spain ..................
Sweden .................
Switzerland ............
2
United Kingdom .........
-1.4
.9
-11.0
6.6
-1.2
2.0
3.0
-1.1
4.9
Trade-weighted measures 4
All 28 foreign economies .. -2.5
-.5
-9.4
2.9
-2.1
.4
.3
-4.9
-6.5
less Mexico, Israel ...
.2
1.0
-5.8
7.3
-.8
1.3
5.3
-3.8
-6.8
OECD 5 .................... -2.6
-.3
-9.6
2.8
-2.3
.4
.0
-5.3
-6.9
less Mexico, Korea 6 ....
.3
1.3
-6.1
7.9
-.8
1.4
5.8
-4.0
-6.8
Europe .................... -.7
2.0
-11.7
10.3
-1.7
1.7
9.2
-2.1
-9.1
European Union ............ -.8
1.7
-11.9
10.3
-1.8
1.4
8.9
-2.0
-8.8
Asian NIEs ................ -.3
-.5
-4.2
4.9
-.9
1.1
2.6
-2.3
-7.0
________________________________________________________________________________________________
Rates of change based on compound rate method.
1 Hong Kong Special Administrative Region of China.
2 1975-96.
3 Former West Germany.
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, September 1998.
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 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 SAR, 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
Country or area
and
economic group
Canada
Mexico
19.2
7.6
Australia
Hong Kong SAR 1
Israel
Japan
1.4
2.0
.8
15.8
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
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
3.4
.3
2.4
.1
4.4
Austria
Belgium
Denmark
Finland
France
Germany 2
.3
1.5
.3
.2
3.2
5.4
Economic groups:
28 foreign
economies
OECD 3
Europe
European Union
Asian NIEs
1992
trade
share
80.8
71.1
23.4
22.1
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 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.