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Internet address:
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USDL: 00-254
Technical information: (202) 691-5654
For Release: 10:00 A.M. EDT
Media contact: (202) 691-5902
Thursday, September 7, 2000
INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 1999
Average hourly compensation costs in U.S. dollars for manufacturing
production workers in 28 foreign economies remained at 79 percent of the U.S.
level in 1999, after declining in the previous three years, according to the
Bureau of Labor Statistics, U.S. Department of Labor. Although costs in Europe
and Canada continued to decline relative to the United States, compensation
costs in Mexico, Japan, and the Asian newly industrializing economies (NIEs) of
Hong Kong, Korea, Singapore, and Taiwan increased at a faster rate than in the
United States. (See chart 1.)
Despite four years of relative declines, 1999 hourly compensation costs in
Europe were still 6 percent higher than in the United States. And, despite a
slight increase in 1999, costs in the Asian NIEs were approximately only onethird of the U.S. level. After briefly dropping below the U.S. level in 1998,
Japanese compensation costs rose to a level 9 percent above the United States.
Canadian costs fell to 81 percent of the U.S. level. (See table 1.)
Chart 1. Hourly compensation costs in U.S. dollars for
production workers in manufacturing, 1975-99
PRINTED COPY CONTAINS CHART AT THIS POINT.
Comparative compensation costs in U.S. dollars
In the United States, hourly compensation costs for production workers
were $19.20 in 1999, a 2.9 percent increase from the 1998 level. Hourly
compensation costs increased 5.1 percent in the combined 28 foreign economies,
following cost declines in the three previous years. In Europe, costs declined
1.3 percent in 1999, whereas they increased 7.6 percent in the Asian NIEs.
Changes in compensation costs in U.S. dollars reflect both the movements
of costs in national currencies and changes in exchange rates. Costs in Canada
remained unchanged at their 1998 level, reflecting both the stability of the
Canadian dollar vis-à-vis the U.S. dollar during the year and of compensation
costs measured in national currency.
In Mexico, however, the 15.2 percent
increase in compensation costs was the second highest increase of the 28
countries studied. Despite the depreciation of the Mexican peso, the sharp
upward trend in Mexican compensation costs in pesos led to the increase. (See
tables A and 2.)
BOX: A NOTE ON THE MEASURES
The hourly compensation measures in this news release are based on statistics
available to BLS as of June 2000. The 1999 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 of 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.
See the Technical Notes for further information regarding definitions, sources,
and computation methods and a description of the trade-weighted measures for
economic groups.
END OF BOX (A NOTE ON THE MEASURES)
Table A. 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)
Percent change, 1998-99
Country
or area
National
Currency
Exchange
Rates
U.S.
dollar
North America
United States
Canada
Mexico
2.9
.1
20.2
-.1
-4.2
2.9
.0
15.2
Asia and Oceania
Australia
Hong Kong SAR 1
Israel
Japan
Korea
New Zealand
Singapore
Sri Lanka
Taiwan
3.7
-.4
7.9
-.9
5.9
2.7
-6.3
2.8
2.6
-.2
-8.2
15.2
17.6
-1.3
-1.4
3.8
6.5
-.5
-.9
14.2
24.5
1.4
-7.6
6.6
2.6
2.6
5.5
1.7
2.6
2.1
2.0
6.7
1.5
3.1
5.2
4.2
1.9
.2
3.3
-4.2
-4.1
-4.1
-4.2
-4.2
-4.1
-4.1
-5.1
-4.5
-4.1
-3.3
-4.4
-3.9
-3.6
-2.4
-1.7
-1.6
1.2
-2.6
-1.6
-2.1
-2.2
1.3
-3.0
-1.1
1.7
-.2
-2.0
-3.4
.8
Trade-weighted measures 2,3
All 28 foreign economies 2.9
OECD 4
3.2
less Mexico, Korea 5
.9
Europe
2.7
Asian NIEs
1.3
2.3
2.5
2.5
-3.8
6.0
5.1
5.7
3.4
-1.3
7.6
Europe
Austria
Belgium
Denmark
Finland
France
Germany, Former West
Germany, Unified
Greece
Ireland
Italy
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Dash means data not available.
1
2
3
4
5
Hong Kong Special Administrative Region of China.
The 1998-99 percent changes for the trade weighted measures are based upon
the changes for the countries or areas for which 1999 data are available.
German data included in the trade-weighted measures relate to the former West
Germany.
OECD refers to the Organization for Economic Cooperation and Development.
Mexico joined the OECD in 1994 and Korea joined in 1996.
The largest contribution to the overall increase in costs for the 28
economies came from the Asian economies. Costs in Japan, Korea, and Taiwan
increased by 14.2, 24.5, and 6.6 percent, respectively. The increases in Korea
and Japan were among the highest of any of the countries studied and reflected
the strong appreciation of the Korean won and the Japanese yen in 1999. The
changes in these countries did not appreciably affect the relative levels of the
NIEs, as a sharp decline in Singapore offset increases in Korea and Taiwan.
Average hourly compensation costs in Europe were $20.31, the lowest for
this region in three years. In relative terms, the gap in compensation costs
between Europe and the United States shrunk to its smallest size in 10 years
(European costs were 6 percentage points above U.S. costs.) Only four European
countries had rising costs in 1999--Denmark, Ireland, Norway, and the United
Kingdom. The largest declines in compensation costs were in Italy and
Switzerland, where costs decreased by approximately 3 percent.
The former West Germany continued to have the highest costs of the 28
foreign economies at $26.93, 40 percent higher than the United States, despite a
consistent decrease in relative costs in the last four years. (Data for Unified
Germany are also available in tables 1-7). Compensation costs in U.S. dollars
for nine European countries continued to be higher than U.S. costs in 1999.
However, costs have declined or increased at a low rate in most of these
countries in the past four years compared with U.S. costs, which continued to
increase. Because of these trends, some countries, such as France and Italy,
which had costs above those of the United States as recently as 1996, now have
costs well below U.S. costs. In 1999, Italy's costs fell to 86 percent of the
U.S. level, and costs in France dropped to 94 percent of the U.S. level. (See
chart 2.)
Chart 2. Indexes of hourly compensation costs in U.S. dollars for
for production workers in manufacturing, 1999
PRINTED COPY CONTAINS CHART AT THIS POINT.
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 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).
For U.S. competitors, compensation costs in national currency experienced
a low rate of growth in 1999. The trade-weighted average cost increase for all
28 foreign economies fell to 2.9 percent, following a 3.8 percent increase in
1998. The 2.9 percent increase was the smallest in the history of the series,
which dates back to 1975. Excluding Mexico and Israel, which historically have
high rates of increase, the trade-weighted increase in compensation costs for
the foreign economies was only 1 percent in 1999.
Several Asian countries experienced declines in compensation costs in
national currency. Costs declined 0.4 percent in Hong Kong, 0.9 percent in
Japan, and 6.3 percent in Singapore. The large decline in costs which occurred
in Singapore stemmed from a reduction in employer contribution rates to the
national pension plan. This was the first time in the history of this series
that there were negative growth rates in these three Asian countries.
National currency compensation costs in Europe rose at a rate of 2.7
percent, similar to the increase the previous year. Switzerland and Italy had
the lowest rates of growth in Europe, at 0.2 and 1.5 percent, respectively.
Costs grew fastest in Denmark, Ireland, and Norway, at more than 5 percent.
National currency compensation costs increased by less than 2 percent or
actually declined in eight countries, as the rate of compensation growth
continued to slow in many countries. From 1975 to 1991, there was only one year
in which more than two countries had growth of 2 percent or less. Since 1992,
the number of countries exhibiting such low growth has steadily increased. In
1998 as well as in 1999, there were eight countries in which costs failed to
increase by at least 2 percent. Also reflecting slowing compensation cost
growth in 1999, only 7 countries had increases greater than 4 percent, the first
year in which fewer than 12 countries failed to exceed 4 percent growth.
Exchange rates
Appreciation of the dollar against the currencies of most foreign
countries continued in 1999, but to a lesser degree than in the previous three
years. Although the European currencies continued to depreciate against the
dollar in 1999, currencies in Australia, Japan, Korea, and Taiwan appreciated,
in some cases sharply. Primarily because of the strength of the Japanese yen,
the trade-weighted value of the currencies of the 28 foreign economies rose 2.3
percent against the dollar in 1999.
The currency values of the largest U.S. trading partners in the study (as
measured by trade weights) moved in different directions in 1999. The Canadian
dollar (the currency with the largest trade weight) remained approximately at
its 1998 level, while the Japanese yen (the currency with the second largest
weight) appreciated approximately 15 percent. The third largest trading partner
in the study, Mexico, saw the value of its currency fall about 4 percent against
the dollar.
The currencies of the Asian NIEs appreciated an average 6 percent against
the dollar in 1999. The Korean won appreciated 17.6 percent, and the New Taiwan
dollar appreciated nearly 4 percent. Currencies in Hong Kong and Singapore
declined, but only slightly. The appreciation of the currencies of the Asian
NIEs was the largest since 1989.
BOX: A NOTE ON EUROPEAN EXCHANGE RATES FOR 1999
On January 1, 1999, several European countries joined the European
Monetary Union (EMU): Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, and Spain. Currencies of EMU
members are established at fixed conversion rates to the euro, the official
currency of the EMU. Exchange rates between the national currencies of EMU
countries and the U.S. dollar are no longer reported; only the exchange rate
between the euro and the U.S. dollar is available.
In this news release, 1999 exchange rates in national currencies are
calculated for the EMU countries by taking the number of euros per U.S. dollar
and then converting euros into national currencies at fixed conversion rates.
The following are the fixed conversion rates between national currencies and the
euro for the EMU countries in this release:
1 euro
=
=
=
=
=
=
=
=
=
=
=
13.7603
40.3399
5.94573
6.55957
1.95583
.787564
1936.27
40.3399
2.20371
200.482
166.386
Austrian Schillings
Belgian Francs
Finnish Markkas
French Francs
German Marks
Irish Pounds
Italian Lire
Luxembourg Francs
Netherlands Guilders
Portuguese Escudos
Spanish Pesetas
In 1999, 1 U.S. dollar was equal to 1.0653 euros.
END OF BOX (A NOTE ON EUROPEAN EXCHANGE RATES FOR 1999)
The European currencies continued to depreciate against the U.S. dollar in
1999, falling a trade-weighted average of 3.8 percent against the U.S. dollar.
As in 1997 and 1998, the British pound remained the strongest European currency
in 1999, declining only 2.4 percent against the dollar. Most of the currencies
pegged to the euro beginning in 1999 declined a little more than 4 percent from
1998 to 1999, with the largest decline in Ireland, at 5.1 percent.
The movements of the foreign currencies relative to the U.S. dollar in
1999 had a significant influence on hourly compensation costs measured in U.S.
dollars. Hourly compensation costs on a national currency basis in the 28
foreign economies rose only 2.9 percent, but, when adjusted for a 2.3 percent
appreciation of the foreign currencies against the U.S. dollar, hourly
compensation costs rose 5.1 percent. The effect that exchange rate changes can
have on hourly compensation costs is particularly evident when comparing
European costs to costs in the Asian NIEs. On a national currency basis, the
increase in hourly compensation costs in 1999 was 1-1/2 percentage points higher
in Europe than in the Asian NIEs. When costs are adjusted for changes in
exchange rates in the two regions, however, costs in the Asian NIEs increased
7.6 percent while costs in Europe declined 1.3 percent.
Additional data available
In addition to the compensation cost measures covered in this news
release, data are available for comparative levels of hourly compensation costs,
hourly direct pay, pay for time worked, and the structure of compensation in
manufacturing for all years from 1975 through 1999.
BLS also computes comparative measures for 39 component manufacturing
industries. Data through 1996 are available upon request and via the Internet
(http://stats.bls.gov/flshome.htm). Data for the component industries are not
included in this release; in general, the data limitations for them are greater
than for total manufacturing.
For further information, contact the Office of Productivity and
Technology, Bureau of Labor Statistics, 2 Massachusetts Avenue, NE, Room 2150,
Washington, DC 20212, or call 202-691-5654.
Information in this release will be made available to sensory impaired
individuals upon request. Voice phone: 202-691-5200; TDD message referral
phone: 1-800-877-8339.
This material is in the public domain and, with appropriate credit, may be
reproduced without permission. It may be translated into foreign languages
without permission, with a separate credit for the translation.
BOX: REVISED MEASURES
The hourly compensation costs series for Ireland, Japan, and New Zealand were
revised to incorporate new labor cost surveys and to make other adjustments.
Data for Ireland were revised back to 1993 with the incorporation of 1996 labor
cost survey data.
For Japan, revisions were made back to 1996 with the incorporation of 1998 labor
cost survey data.
For New Zealand, data were revised to reflect changes in the Quarterly
Employment Survey. The new survey includes expanded coverage of small businesses
and other changes. Data from the previous series were linked to data from the
new series at August 1999.
Data for Korea were revised for 1997 and 1998, reflecting increases in
employers' severance pay costs in those years.
END OF BOX (REVISED MEASURES)
Table 1. Indexes of hourly compensation costs in U.S. dollars for production workers
in manufacturing, 29 countries or areas and selected economic groups, selected years, 1975-99
(Index, United States = 100)
Country or area
1975
1980
1985
1990
1995
1996
1997
1998
1999
North America
United States ......
Canada .............
Mexico .............
100
94
23
100
88
22
100
84
12
100
107
11
100
94
9
100
94
9
100
90
10
100
84
10
100
81
11
Asia and Oceania
Australia ..........
Hong Kong SAR 1 ....
Israel .............
Japan ..............
Korea ..............
New Zealand ........
Singapore ..........
Sri Lanka ..........
88
12
35
47
5
50
13
4
86
15
38
56
10
53
15
2
63
13
31
49
9
34
19
2
88
21
57
86
25
55
25
2
89
28
61
139
42
58
43
3
95
29
64
119
46
61
47
3
91
30
66
107
43
59
45
3
80
29
64
98
29
48
42
3
83
28
62
109
35
48
37
-
Taiwan .............
6
10
12
26
35
34
32
28
29
Europe
Austria ............
Belgium ............
Denmark ............
Finland ............
France .............
Germany, Former West
Germany, Unified ...
Greece .............
Ireland ............
Italy ..............
Luxembourg .........
Netherlands ........
Norway .............
Portugal ...........
Spain ..............
Sweden .............
Switzerland ........
United Kingdom .....
71
101
99
72
71
99
27
48
73
102
103
106
25
40
113
96
53
90
133
110
83
91
124
38
60
83
122
122
117
21
60
127
112
77
58
69
62
63
58
73
28
46
59
60
67
80
12
36
74
74
48
119
129
121
141
104
147
45
78
117
112
121
144
25
76
140
140
85
147
155
140
140
116
184
178
53
79
94
136
140
142
31
75
125
170
80
140
147
136
132
113
176
171
54
79
100
127
131
142
32
76
138
160
80
120
125
121
117
98
152
147
50
74
96
104
115
130
29
67
122
132
85
119
124
122
116
98
147
143
48
72
92
100
113
126
29
65
118
131
88
114
119
120
110
94
140
136
71
86
109
125
63
112
123
86
67
74
84
100
12
52
57
65
61
13
83
90
104
116
25
95
103
118
128
37
91
98
112
125
39
84
90
103
112
37
79
85
98
110
31
79
86
98
106
32
Trade-weighted measures
All 28 foreign econ.
OECD 4 .............
less Mexico, Korea5
Europe .............
Asian NIEs .........
2,3
60
67
76
80
8
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 Data for Germany relate to the former West Germany only.
3 For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source:
U.S. Department of Labor, Bureau of Labor Statistics, September 2000.
Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
29 countries or areas and selected economic groups, selected years, 1975-99
Country or area
1975
1980
1985
1990
1995
1996
1997
1998
1999
North America
United States ...... $6.36
Canada ............. 5.96
Mexico ............. 1.47
$9.87 $13.01 $14.91 $17.19 $17.70 $18.27 $18.66 $19.20
8.67 10.95 15.95 16.10 16.64 16.47 15.60 15.60
2.21
1.59
1.58
1.51
1.54
1.78
1.84
2.12
Asia and Oceania
Australia ..........
Hong Kong SAR 1 ....
Israel .............
Japan ..............
Korea ..............
New Zealand ........
Singapore ..........
Sri Lanka ..........
Taiwan .............
5.62
.76
2.25
3.00
.32
3.15
.84
.28
.40
8.47
1.51
3.79
5.52
.96
5.22
1.49
.22
1.00
8.20
1.73
4.06
6.34
1.23
4.38
2.47
.28
1.50
13.07
3.20
8.55
12.80
3.71
8.17
3.78
.35
3.93
15.27
4.82
10.54
23.82
7.29
9.91
7.33
.48
5.94
16.88
5.14
11.32
21.00
8.22
10.81
8.32
.48
5.95
16.58
5.42
12.04
19.54
7.86
10.81
8.24
.46
5.90
14.92
5.47
12.02
18.29
5.39
9.01
7.77
.47
5.27
15.89
5.44
11.91
20.89
6.71
9.14
7.18
5.62
Europe
Austria ............
Belgium ............
Denmark ............
Finland ............
France .............
Germany, Former West
Germany, Unified ...
Greece .............
Ireland ............
Italy ..............
Luxembourg .........
Netherlands ........
Norway .............
Portugal ...........
Spain ..............
Sweden .............
Switzerland ........
United Kingdom .....
4.51
6.41
6.28
4.61
4.52
6.31
1.69
3.03
4.67
6.50
6.58
6.77
1.58
2.53
7.18
6.09
3.37
8.88
13.11
10.83
8.24
8.94
12.25
3.73
5.95
8.15
12.03
12.06
11.59
2.06
5.89
12.51
11.09
7.56
7.58
8.97
8.13
8.16
7.52
9.53
3.66
5.92
7.63
7.81
8.75
10.37
1.53
4.66
9.66
9.66
6.27
17.75
19.17
18.04
21.03
15.49
21.88
6.76
11.66
17.45
16.74
18.06
21.47
3.77
11.38
20.93
20.86
12.70
25.32
26.65
24.07
24.10
20.01
31.58
30.65
9.17
13.61
16.22
23.35
24.12
24.38
5.37
12.88
21.44
29.30
13.67
24.80
25.97
24.11
23.41
19.93
31.20
30.26
9.59
13.91
17.75
22.55
23.22
25.05
5.58
13.51
24.37
28.34
14.09
21.97
22.88
22.03
21.32
17.99
27.68
26.84
9.20
13.61
17.57
19.02
20.98
23.72
5.38
12.24
22.22
24.19
15.47
22.21
23.20
22.69
21.66
18.28
27.52
26.76
8.91
13.39
17.11
18.74
21.17
23.50
5.48
12.14
22.02
24.38
16.43
21.83
22.82
22.96
21.10
17.98
26.93
26.18
13.57
16.60
20.94
23.91
12.11
21.58
23.56
16.56
6.60
7.30
8.30
9.90
1.17
6.75
7.40
8.48
7.96
1.65
12.36
13.49
15.54
17.31
3.72
16.36
17.72
20.36
21.97
6.41
16.09
17.36
19.88
22.07
6.92
15.30
16.45
18.79
20.43
6.83
14.72
15.85
18.21
20.61
5.83
15.24
16.44
18.80
20.31
6.20
Trade-weighted measures 2,3
All 28 foreign econ. 3.83
OECD 4 ............. 4.25
less Mexico, Korea5 4.82
Europe ............. 5.10
Asian NIEs .........
.52
Dash means data not available.
1
2
3
4
5
Hong Kong Special Administrative Region of China.
Data for Germany relate to the former West Germany only.
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 2000.
Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production workers
in manufacturing, 29 countries or areas and selected economic groups, selected periods, 1975-99
Country or area
North America
United States ......
Canada .............
Mexico .............
1975-99 1975-80
1980-85
1985-90 1990-95 1995-99 1997
1998
1999
4.7
4.1
1.5
9.2
7.8
8.5
5.7
4.8
-6.4
2.8
7.8
-.1
2.9
.2
-.9
2.8
-.8
8.9
3.2
-1.0
15.6
2.1
-5.3
3.4
2.9
.0
15.2
Asia and Oceania
Australia ..........
4.4
Hong Kong SAR 1 ....
8.5
Israel .............
7.2
Japan ..............
8.4
Korea ..............
13.5
New Zealand ........
4.5
Singapore ..........
9.4
Sri Lanka .......... (2)2.3
Taiwan .............
11.6
8.5
14.7
11.0
13.0
24.6
10.6
12.1
-4.7
20.1
-.6
2.8
1.4
2.8
5.1
-3.4
10.6
4.9
8.4
9.8
13.1
16.1
15.1
24.7
13.3
8.9
4.6
21.2
3.2
8.5
4.3
13.2
14.5
3.9
14.2
6.5
8.6
1.0
3.1
3.1
-3.2
-2.1
-2.0
-.5
-1.4
-1.8
5.4
6.4
-7.0
-4.4
.0
-1.0
-4.2
-.8
-10.0
.9
-.2
-6.4
-31.4
-16.7
-5.7
2.2
-10.7
6.5
-.5
-.9
14.2
24.5
1.4
-7.6
6.6
Europe
Austria ............
6.8
Belgium ............
5.4
Denmark ............
5.6
Finland ............
6.5
France .............
5.9
Germany, Former West
6.2
Germany, Unified ...
Greece ............. (2)7.5
Ireland ............
6.4
Italy ..............
5.4
Luxembourg ......... (2)4.7
Netherlands ........
4.9
Norway .............
5.4
14.5
15.4
11.5
12.3
14.6
14.2
17.2
14.4
11.8
13.1
12.9
11.4
-3.1
-7.3
-5.6
-.2
-3.4
-4.9
-.4
-.1
-1.3
-8.3
-6.2
-2.2
18.6
16.4
17.3
20.8
15.5
18.1
13.1
14.5
18.0
16.5
15.6
15.7
7.4
6.8
5.9
2.8
5.3
7.6
6.3
3.1
-1.5
6.9
6.0
2.6
-3.6
-3.8
-1.2
-3.3
-2.6
-3.9
-3.9
-.1
.6
-3.5
-.5
-11.4
-11.9
-8.6
-8.9
-9.7
-11.3
-11.3
-4.1
-2.2
-1.0
-15.7
-9.6
-5.3
1.1
1.4
3.0
1.6
1.6
-.6
-.3
-3.2
-1.6
-2.6
-1.5
.9
-.9
-1.7
-1.6
1.2
-2.6
-1.6
-2.1
-2.2
1.3
-3.0
-1.1
1.7
Portugal ........... (2)5.6
Spain ..............
6.7
Sweden .............
4.7
Switzerland ........
5.8
United Kingdom .....
6.9
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
7.3
2.5
.5
7.0
1.5
-1.5
.2
-5.3
4.9
-3.6
-9.4
-8.8
-14.6
9.8
1.9
-.8
-.9
.8
6.2
-.2
-2.0
-3.4
.8
Trade-weighted measures 3,4
All 28 foreign econ.
6.4
less Mexico, Israel
6.9
OECD 5 .............
5.9
less Mexico, Korea6
6.0
Europe .............
6.0
Asian NIEs .........
11.2
12.5
13.0
12.0
11.8
14.5
18.9
1.0
1.7
.1
.7
-4.1
7.0
12.8
14.1
12.4
13.3
16.7
18.4
5.6
6.3
5.1
5.3
4.4
11.3
-.4
-1.4
-.5
-1.6
-1.2
-.7
-1.8
-3.8
-2.2
-4.4
-5.6
-.8
-4.1
-5.0
-3.9
-3.2
1.1
-13.6
5.1
4.1
5.7
3.4
-1.3
7.6
Rates of change based on compound rate method.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 1975-98.
3 Data for Germany relate to the former West Germany only.
4 Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas.
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5 Organization for Economic Cooperation and Development.
6 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source:
U.S. Department of Labor, Bureau of Labor Statistics, September 2000.
Table 4. Hourly compensation costs in national currency for production workers in manufacturing,
29 countries or areas, selected years, 1975-99
Country or area
1975
1980
1985
1990
1995
1996
1997
1998
1999
North America
United States ..
Canada .........
Mexico .........
6.36
6.06
18
9.87
10.13
51
13.01
14.95
409
14.91
18.62
4440
17.19
22.10
9.69
17.70
22.69
11.68
18.27
22.81
14.12
18.66
23.15
16.84
19.20
23.17
20.24
Asia and Oceania
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
20.62
37.30
31.73
2238
21.56
39.74
36.14
2285
22.30
41.99
41.52
2367
23.73
42.39
45.67
2396
24.61
42.20
49.29
2375
Korea ..........
New Zealand ....
Singapore ......
Sri Lanka ......
Taiwan .........
157
2.60
2.00
1.97
15.17
583
5.37
3.20
3.58
36.13
1074
8.81
5.43
7.58
59.60
2623
13.71
6.85
14.05
105.69
5620
15.10
10.39
24.45
157.30
6611
15.72
11.73
26.49
163.48
7471
16.30
12.25
26.86
169.86
7545
16.81
12.99
30.10
176.81
7987
17.27
12.17
181.69
Europe
Austria ........ 78.46 114.78
Belgium ........ 235.10 382.88
Denmark ........ 36.00 60.98
Finland ........ 16.88 30.64
France ......... 19.34 37.73
Germany, F. West 15.48 22.23
Germany, Unified
Greece .........
55
159
Ireland ........
1.36
2.89
Italy ..........
3048
6966
Luxembourg .....
239
352
Netherlands .... 16.59 23.93
Norway ......... 35.29 57.20
Portugal ....... 40.26 103.28
Spain ..........
145
422
Sweden ......... 29.73 52.91
Switzerland .... 15.72 18.57
United Kingdom .
1.52
3.25
156.75
532.39
86.18
50.56
67.49
28.04
506
5.55
14563
464
29.04
89.11
263.37
792
83.12
23.71
4.84
201.07
640.60
111.65
80.56
84.38
35.37
1071
7.03
20900
559
32.90
134.26
538.11
1161
123.98
29.00
7.12
255.24
785.47
134.77
105.47
99.77
45.22
43.89
2124
8.49
26425
688
38.69
154.44
804.35
1604
153.14
34.61
8.66
262.64
804.27
139.86
107.55
101.97
46.95
45.54
2309
8.70
27394
698
39.15
161.78
860.39
1712
163.46
35.03
9.03
268.20
819.51
145.60
110.78
105.05
48.02
46.57
2514
8.98
29945
680
40.98
168.10
943.62
1793
169.87
35.10
9.44
274.97
842.42
152.11
115.81
107.88
48.44
47.09
2632
9.40
29714
680
42.01
177.46
988.13
1814
175.11
35.37
9.91
281.99
864.11
160.49
117.75
110.71
49.44
48.06
10.03
30170
43.32
186.67
1891
178.52
35.45
10.24
For currency units, see note to table 6.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
Source:
U.S. Department of Labor, Bureau of Labor Statistics, September 2000.
Table 5. Annual percent change in hourly compensation costs in national currency for
production workers in manufacturing, 29 countries or areas and selected economic
groups, selected periods, 1975-99
Country or area
North America
United States ......
Canada .............
Mexico .............
1975-99 1975-80 1980-85 1985-90 1990-95 1995-99
4.7
5.7
34.0
9.2
10.8
23.2
5.7
8.1
51.6
2.8
4.5
61.1
2.9
3.5
16.9
2.8
1.2
20.2
1997
1998
1999
3.2
.5
20.9
2.1
1.5
19.3
2.9
.1
20.2
Asia and Oceania
Australia ..........
7.5
Hong Kong SAR 1 ....
10.6
Israel .............
54.5
Japan ..............
4.2
Korea ..............
17.8
New Zealand ........
8.2
Singapore ..........
7.8
Sri Lanka ..........(2)12.6
Taiwan .............
10.9
11.6
15.0
68.3
7.0
30.0
15.6
9.9
12.7
19.0
9.5
12.4
200.9
4.0
13.0
10.4
11.2
16.2
10.5
7.4
13.1
29.2
4.2
19.6
9.2
4.8
13.1
12.1
4.3
8.4
13.0
3.8
16.5
2.0
8.7
11.7
8.3
4.5
3.1
11.6
1.5
9.2
3.4
4.0
3.7
3.4
5.7
14.9
3.6
13.0
3.7
4.4
1.4
3.9
6.4
1.0
10.0
1.2
1.0
3.1
6.0
12.1
4.1
3.7
-.4
7.9
-.9
5.9
2.7
-6.3
2.8
Europe
Austria ............
5.5
Belgium ............
5.6
Denmark ............
6.4
Finland ............
8.4
France .............
7.5
Germany, Former West
5.0
Germany, Unified ...
Greece .............(2)18.3
Ireland ............
8.7
Italy ..............
10.0
Luxembourg ......... (2)4.7
Netherlands ........
4.1
Norway .............
7.2
Portugal ...........(2)14.9
Spain ..............
11.3
Sweden .............
7.8
Switzerland ........
3.4
United Kingdom .....
8.3
7.9
10.2
11.1
12.7
14.3
7.5
23.7
16.3
18.0
8.1
7.6
10.1
20.7
23.8
12.2
3.4
16.4
6.4
6.8
7.2
10.5
12.3
4.8
26.1
13.9
15.9
5.7
3.9
9.3
20.6
13.4
9.5
5.0
8.3
5.1
3.8
5.3
9.8
4.6
4.8
16.2
4.8
7.5
3.8
2.5
8.5
15.4
7.9
8.3
4.1
8.0
4.9
4.2
3.8
5.5
3.4
5.0
14.7
3.8
4.8
4.2
3.3
2.8
8.4
6.7
4.3
3.6
4.0
2.5
2.4
4.5
2.8
2.6
2.3
2.3
4.3
3.4
2.9
4.9
4.2
3.9
.6
4.3
2.1
1.9
4.1
3.0
3.0
2.3
2.3
8.9
3.2
9.3
-2.6
4.7
3.9
9.7
4.7
3.9
.2
4.5
2.5
2.8
4.5
4.5
2.7
.9
1.1
4.7
4.7
-.8
.0
2.5
5.6
4.7
1.2
3.1
.8
5.0
2.6
2.6
5.5
1.7
2.6
2.1
2.0
6.7
1.5
3.1
5.2
4.2
1.9
.2
3.3
Trade-weighted measures 3,4
All 28 foreign econ.
10.0
less Mexico, Israel
6.9
OECD 5 .............
9.4
less Mexico, Korea6
5.9
Europe .............
7.0
Asian NIEs .........
12.2
13.6
12.0
12.8
10.5
12.4
19.6
14.0
8.0
12.3
7.3
8.7
11.6
11.7
6.4
11.7
5.0
5.8
12.9
6.3
5.1
5.9
3.9
4.4
10.7
4.4
2.6
4.4
2.1
3.1
5.2
5.2
3.4
5.1
2.7
3.9
6.8
3.8
2.1
3.7
1.9
2.4
3.1
2.9
1.0
3.2
.9
2.7
1.3
Rates of change based on compound rate method.
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 1975-98.
3 Data for Germany relate to the former West Germany only.
4 Trade-weighted percent changes computed as the trade-weighted
5
6
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 2000.
Table 6. Exchange rates, 29 countries or areas, selected years, 1975-99
(National currency units per U.S. dollar)
Country or area
1975
1980
1985
1990
1995
1996
1997
1998
1999
North America
United States ....
Canada ...........
Mexico ...........
1.000
1.017
12.50
1.000
1.169
22.97
1.000
1.366
256.9
1.000
1.167
2813
1.000
1.373
6.419
1.000
1.364
7.600
1.000
1.385
7.918
1.000
1.484
9.152
1.000
1.486
9.553
Asia and Oceania
Australia ........
Hong Kong SAR 1 ..
Israel ...........
Japan ............
Korea ............
New Zealand ......
Singapore ........
Sri Lanka ........
Taiwan ...........
.7647
4.939
.6390
296.7
484.0
.8254
2.371
7.050
38.00
.8772
4.976
5.124
225.7
607.4
1.027
2.141
16.53
36.02
1.428
7.791
1.179
238.5
870.0
2.010
2.200
27.16
39.85
1.281
7.790
2.016
145.0
707.8
1.677
1.813
40.06
26.92
1.350
7.736
3.011
93.96
771.3
1.524
1.417
51.25
26.50
1.277
7.735
3.192
108.8
804.5
1.454
1.410
55.27
27.47
1.345
7.743
3.449
121.1
950.8
1.509
1.486
59.00
28.78
1.590
7.747
3.800
131.0
1400
1.865
1.672
64.59
33.55
1.549
7.759
4.140
113.7
1190
1.889
1.695
32.32
Europe
Austria ..........
Belgium ..........
Denmark ..........
Finland ..........
France ...........
Germany, F. West
Germany, Unified
Greece ...........
Ireland ..........
Italy ............
Luxembourg .......
Netherlands ......
Norway ...........
Portugal .........
17.40
36.69
5.735
3.665
4.282
2.455
32.29
.4500
652.4
36.78
2.523
5.214
25.45
12.93
29.20
5.629
3.719
4.220
1.815
42.62
.4860
855.1
29.24
1.985
4.936
50.05
20.68
59.34
10.60
6.197
8.980
2.942
138.1
.9379
1909
59.38
3.318
8.593
172.1
11.33
33.42
6.190
3.830
5.447
1.617
158.5
.6033
1198
33.42
1.822
6.254
142.7
10.08
29.47
5.600
4.376
4.986
1.432
1.432
231.7
.6236
1629
29.48
1.604
6.336
149.9
10.59
30.97
5.800
4.595
5.116
1.505
1.505
240.7
.6252
1543
30.96
1.686
6.459
154.3
12.21
35.81
6.609
5.196
5.839
1.735
1.735
273.1
.6595
1704
35.77
1.953
7.086
175.4
12.38
36.31
6.703
5.347
5.900
1.760
1.760
295.5
.7019
1737
36.30
1.984
7.552
180.3
12.92
37.87
6.990
5.581
6.157
1.836
1.836
.7393
1818
2.069
7.807
-
Spain ............
Sweden ...........
Switzerland ......
United Kingdom ...
57.39
4.142
2.581
.4501
71.64
4.229
1.675
.4300
170.0
8.603
2.455
.7708
102.0
5.923
1.390
.5605
124.6
7.141
1.181
.6335
126.7
6.708
1.236
.6407
146.5
7.645
1.451
.6106
149.4
7.952
1.451
.6034
156.2
8.274
1.505
.6184
1 Hong Kong Special Administrative Region of China.
Note: National currency units are: United States, dollar; Canada, dollar;
Mexico, peso; Australia, dollar; Hong Kong, dollar; Israel, shekel (1975-84),
new shekel (1985-99); 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 2000.
Table 7. Annual percent change in exchange rates (U.S. dollars per national currency unit),
29 countries or areas and selected economic groups, selected years, 1975-99
Country or area
North America
United States ......
Canada .............
Mexico .............
1975-99 1975-80 1980-85 1985-90 1990-95 1995-99
1997
1998
1999
-1.6
-24.2
-2.7
-11.5
-3.1
-38.3
3.2
-38.0
-3.2
-15.2
-2.0
-9.5
-1.5
-4.0
-6.7
-13.5
-.1
-4.2
Asia and Oceania
Australia ..........
-2.9
Hong Kong SAR 1 ....
-1.9
Israel ............. -30.6
Japan ..............
4.1
Korea ..............
-3.7
New Zealand ........
-3.4
Singapore ..........
1.4
Sri Lanka ..........(2)-9.2
Taiwan .............
.7
-2.7
-.1
-34.1
5.6
-4.4
-4.3
2.1
-15.7
1.1
-9.3
-8.6
-66.3
-1.1
-6.9
-12.6
-.5
-9.5
-2.0
2.2
.0
-10.2
10.5
4.2
3.7
3.9
-7.5
8.2
-1.0
.1
-7.7
9.1
-1.7
1.9
5.1
-4.8
.3
-3.4
-.1
-7.7
-4.7
-10.3
-5.2
-4.4
-4.8
-5.1
-.1
-7.5
-10.2
-15.4
-3.6
-5.1
-6.3
-4.6
-15.4
-.1
-9.2
-7.6
-32.1
-19.1
-11.1
-8.7
-14.2
2.6
-.2
-8.2
15.2
17.6
-1.3
-1.4
3.8
6.1
4.7
.4
-9.0
-13.2
-11.9
12.8
12.2
11.4
2.4
2.5
2.0
-6.0
-6.1
-5.4
-13.3
-13.5
-12.2
-1.4
-1.4
-1.4
-4.2
-4.1
-4.1
Europe
Austria ............
Belgium ............
Denmark ............
1.2
-.1
-.8
Finland ............
-1.7
France .............
-1.5
Germany, Former West
1.2
Germany, Unified ...
Greece .............(2)-9.2
Ireland ............
-2.0
Italy ..............
-4.2
Luxembourg ......... (2).1
Netherlands ........
.8
Norway .............
-1.7
Portugal ...........(2)-8.2
Spain ..............
-4.1
Sweden .............
-2.8
Switzerland ........
2.3
United Kingdom .....
-1.3
-.3
.3
6.2
-5.4
-1.5
-5.3
4.7
4.9
1.1
-12.7
-4.3
-.4
9.0
.9
-9.7
-14.0
-9.2
-21.0
-12.3
-14.8
-13.2
-9.8
-10.5
-21.9
-15.9
-13.2
-7.4
-11.0
10.1
10.5
12.7
-2.7
9.2
9.8
12.2
12.7
6.6
3.8
10.8
7.8
12.0
6.6
-2.6
1.8
2.5
-7.3
-.7
-6.0
2.5
2.6
-.3
-1.0
-3.9
-3.7
3.3
-2.4
-5.9
-5.1
-6.0
-6.0
-4.2
-2.7
-6.2
-5.1
-5.5
-3.6
-5.9
.6
-11.6
-12.4
-13.3
-13.3
-11.9
-5.2
-9.4
-13.4
-13.7
-8.8
-12.0
-13.5
-12.3
-14.8
4.9
-2.8
-1.0
-1.4
-1.4
-7.6
-6.0
-1.9
-1.5
-1.6
-6.2
-2.7
-1.9
-3.9
.0
1.2
-4.2
-4.2
-4.1
-4.1
-5.1
-4.5
-4.1
-3.3
-4.4
-3.9
-3.6
-2.4
Trade-weighted measures 3,4
All 28 foreign econ.
-2.6
less Mexico, Israel
.0
OECD 5 .............
-2.6
less Mexico, Korea6
.2
Europe .............
-.9
Asian NIEs .........
-.8
-.5
1.0
-.3
1.3
2.0
-.5
-9.4
-5.8
-9.6
-6.1
-11.7
-4.2
2.9
7.3
2.8
7.9
10.3
4.9
-.4
1.2
-.6
1.4
.0
.7
-4.4
-3.8
-4.5
-3.5
-4.0
-5.5
-6.6
-6.9
-7.0
-6.8
-9.1
-7.0
-7.6
-6.9
-7.2
-5.0
-1.2
-16.3
2.3
3.1
2.5
2.5
-3.8
6.0
Rates of change based on compound rate method.
1 Hong Kong Special Administrative Region of China.
2 1975-98.
3 Data for Germany relate to the former West Germany only.
4 Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas.
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5 Organization for Economic Cooperation and Development.
6 Mexico joined the OECD in 1994, and Korea joined in 1996.
Source:
U.S. Department of Labor, Bureau of Labor Statistics, September 2000.
TECHNICAL NOTES
The tables in this news release present international comparisons of hourly
compensation costs for production workers in manufacturing in selected countries
or areas. The total compensation measures are prepared by the Bureau of Labor
Statistics in order to assess international differences in employer labor costs.
Comparisons based on the more readily available average earnings statistics
published by many countries can be very misleading. National definitions of
average earnings differ considerably; average earnings do not include all items
of labor compensation; and the omitted items of compensation frequently
represent a large proportion of total compensation.
The compensation measures are computed in national currency units and are
converted into U.S. dollars at prevailing commercial market currency exchange
rates. The foreign currency exchange rates used in the calculations are the
average daily exchange rates for the reference period. They are appropriate
measures for comparing levels of employer labor costs. They do not indicate
relative living standards of workers or the purchasing power of their income.
Prices of goods and services vary greatly among countries, and commercial market
exchange rates are not reliable indicators of relative differences in prices.
Definitions
Hourly compensation costs include (1) hourly direct pay and (2) employer social
insurance expenditures and other labor taxes. Hourly direct pay includes all
payments made directly to the worker, before payroll deductions of any kind,
consisting of (a) pay for time worked (basic time and piece rates plus overtime
premiums, shift differentials, other premiums and bonuses paid regularly each
pay period, and cost-of-living adjustments) and (b) other direct pay (pay for
time not worked (vacations, holidays, and other leave, except sick leave),
seasonal or irregular bonuses and other special payments, selected social
allowances, and the cost of payments in kind). Social insurance expenditures
and other labor taxes include (c) employer expenditures for legally required
insurance programs and contractual and private benefit plans (retirement and
disability pensions, health insurance, income guarantee insurance and sick
leave, life and accident insurance, occupational injury and illness
compensation, unemployment insurance, and family allowances) and, for some
countries, (d) other labor taxes (other taxes on payrolls or employment (or
reductions to reflect subsidies), even if they do not finance programs that
directly benefit workers, because such taxes are regarded as labor costs). For
consistency, compensation is measured on an hours-worked basis for every
country.
The BLS definition of hourly compensation costs is not the same as the
International Labour Office (ILO) definition of total labor costs. Hourly
compensation costs do not include all items of labor costs. The costs of
recruitment, employee training, and plant facilities and services(such as
cafeterias and medical clinics(are not included because data are not available
for most countries. The labor costs not included account for no more than 4
percent of total labor costs in any country for which the data are available.
Production workers generally include those employees who are engaged in
fabricating, assembly, and related activities; material handling, warehousing,
and shipping; maintenance and repair; janitorial and guard services; auxiliary
production (for example, powerplants); and other services closely related to the
above activities. Working supervisors are generally included; apprentices and
other trainees are generally excluded.
Methods
Total compensation is computed by adjusting each country's average earnings
series for items of direct pay not included in earnings and for employer
expenditures for legally required insurance, contractual and private benefit
plans, and other labor taxes. For the United States and other countries that
measure earnings on an hours-paid basis, the figures are also adjusted in order
to approximate compensation per hour worked.
Earnings statistics are obtained from surveys of employment, hours, and earnings
or from surveys or censuses of manufactures.
Adjustment factors are obtained from periodic labor cost surveys and
interpolated or projected to nonsurvey years on the basis of other information
for most countries. The information used includes annual tabulations of
employer social security contribution rates provided by the International
Studies Staff of the U.S. Social Security Administration, information on
contractual and legislated fringe benefit changes from ILO and national labor
bulletins, and statistical series on indirect labor costs. For other countries,
adjustment factors are obtained from surveys or censuses of manufactures or from
reports on fringe-benefit systems and social security. For the United States,
the adjustment factors are special calculations for international comparisons
based on data from several surveys.
The statistics are also adjusted, where necessary, to account for major
differences in worker coverage; differences in industrial classification
systems; and changes over time in survey coverage, sample benchmarks, or
frequency of surveys. Nevertheless, some differences in industrial coverage
remain and, with the exception of the United States, Canada, and several other
countries, the data exclude very small establishments (less than 5 employees in
Japan and less than 10 employees in most European and some other countries).
For the United States, the methods used, as well as the results, differ somewhat
from those for other BLS series on U.S. compensation costs.
Hourly compensation costs are converted to U.S. dollars using the average daily
exchange rate for the reference period. The exchange rates used are prevailing
commercial market exchange rates as published by either the U.S. Federal Reserve
Board or the International Monetary Fund.
For further details on survey sources and on special estimation procedures for
some countries because of incomplete data, see International Comparisons of
Hourly Compensation Costs for Production Workers in Manufacturing, 1995 (Report
909, Bureau of Labor Statistics, September 1996).
Country notes
The following are exceptions to the standard coverage and definitions explained
above:
Australia. Compensation relates to production workers and nonproduction workers
other than those in managerial, executive, professional, and higher supervisory
positions.
Hong Kong SAR. Average of selected manufacturing industries. The industries
covered accounted for about 70 percent of all persons employed in manufacturing
in 1988. Compensation excludes overtime pay. Hong Kong became a Special
Administrative Region (SAR) of China in July 1997.
Austria. Excludes workers in establishments considered handicraft
manufacturers. (All printing and publishing and 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. Excludes workers in establishments considered handicraft
manufacturers. In 1990, handicraft employment in the former West Germany was
about 25 percent of all manufacturing employment. Average hourly earnings of
production workers were about 3 percent lower in manufacturing including
handicrafts than in manufacturing excluding handicrafts.
Ireland.
Data refer to September for 1975.
Norway. For comparability with other countries, 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 economic groups are relative importances derived from 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 below.
Table A. Share of total U.S. imports and exports
of manufactured products in 1992(in percent)
Country or area
1992
Country or area
1992
and
trade
and
trade
economic group
share
economic group
share
Canada
19.2
Greece
.1
Mexico
7.6
Ireland
.6
Italy
2.3
Australia
1.4
Luxembourg
.1
Hong Kong SAR 1
2.0
Netherlands
1.9
Israel
.8
Norway
.3
Japan
15.8
Portugal
.2
Korea
3.4
Spain
.8
New Zealand
.3
Sweden
.8
Singapore
2.4
Switzerland
1.0
Sri Lanka
.1
United Kingdom
4.4
Taiwan
4.4
Economic groups:
Austria
.3
28 foreign
Belgium
1.5
economies
80.8
Denmark
.3
OECD 3
71.1
Finland
.2
Europe
23.4
France
3.2
European Union
22.1
Germany 2
5.4
Asian NIEs
12.2
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
3 Organization for Economic Cooperation and Development.
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. Europe consists of Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, and the United Kingdom. The group labeled "Asian
NIEs" consists of the four newly industrializing economies of Hong Kong SAR,
Korea, Singapore, and Taiwan.
The trade weighted measures relate to all the countries or areas covered in the
series. Data for Germany relate to the former West Germany. Estimates are
computed for missing country data using the average trend in other economies to
estimate the missing data. Trade weighted average percent changes for the 28
foreign economies are computed both including and excluding Mexico and Israel
because their rapid rates of inflation and currency changes in several years
distort the trade-weighted averages.
The trade-weighted average rates of change are computed as the trade-weighted
arithmetic average of the rates of change for the individual countries or areas;
the trade-weighted average hourly compensation costs are computed as the tradeweighted arithmetic average of cost levels for the individual countries or
areas. Rates of change derived from the trade-weighted average hourly
compensation cost levels need not be the same as the trade-weighted average
rates of change.
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 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.