Full text of 1999 : Text File, USDL: 00-254
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Internet address: http://stats.bls.gov/flshome.htm 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 one-
third 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-�-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 National Exchange U.S.
or area Currency Rates dollar
North America
United States 2.9 - 2.9
Canada .1 -.1 .0
Mexico 20.2 -4.2 15.2
Asia and Oceania
Australia 3.7 2.6 6.5
Hong Kong SAR 1 -.4 -.2 -.5
Israel 7.9 -8.2 -.9
Japan -.9 15.2 14.2
Korea 5.9 17.6 24.5
New Zealand 2.7 -1.3 1.4
Singapore -6.3 -1.4 -7.6
Sri Lanka - - -
Taiwan 2.8 3.8 6.6
Europe
Austria 2.6 -4.2 -1.7
Belgium 2.6 -4.1 -1.6
Denmark 5.5 -4.1 1.2
Finland 1.7 -4.2 -2.6
France 2.6 -4.2 -1.6
Germany, Former West 2.1 -4.1 -2.1
Germany, Unified 2.0 -4.1 -2.2
Greece - - -
Ireland 6.7 -5.1 1.3
Italy 1.5 -4.5 -3.0
Luxembourg - - -
Netherlands 3.1 -4.1 -1.1
Norway 5.2 -3.3 1.7
Portugal - - -
Spain 4.2 -4.4 -.2
Sweden 1.9 -3.9 -2.0
Switzerland .2 -3.6 -3.4
United Kingdom 3.3 -2.4 .8
Trade-weighted measures 2,3
All 28 foreign economies 2.9 2.3 5.1
OECD 4 3.2 2.5 5.7
less Mexico, Korea 5 .9 2.5 3.4
Europe 2.7 -3.8 -1.3
Asian NIEs 1.3 6.0 7.6
Dash means data not available.
1 Hong Kong Special Administrative Region of China.
2 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.
3 German data included in the trade-weighted measures relate to the former West
Germany.
4 OECD refers to the Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.
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 Austrian Schillings
= 40.3399 Belgian Francs
= 5.94573 Finnish Markkas
= 6.55957 French Francs
= 1.95583 German Marks
= .787564 Irish Pounds
= 1936.27 Italian Lire
= 40.3399 Luxembourg Francs
= 2.20371 Netherlands Guilders
= 200.482 Portuguese Escudos
= 166.386 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 ...... 100 100 100 100 100 100 100 100 100
Canada ............. 94 88 84 107 94 94 90 84 81
Mexico ............. 23 22 12 11 9 9 10 10 11
Asia and Oceania
Australia .......... 88 86 63 88 89 95 91 80 83
Hong Kong SAR 1 .... 12 15 13 21 28 29 30 29 28
Israel ............. 35 38 31 57 61 64 66 64 62
Japan .............. 47 56 49 86 139 119 107 98 109
Korea .............. 5 10 9 25 42 46 43 29 35
New Zealand ........ 50 53 34 55 58 61 59 48 48
Singapore .......... 13 15 19 25 43 47 45 42 37
Sri Lanka .......... 4 2 2 2 3 3 3 3 -
Taiwan ............. 6 10 12 26 35 34 32 28 29
Europe
Austria ............ 71 90 58 119 147 140 120 119 114
Belgium ............ 101 133 69 129 155 147 125 124 119
Denmark ............ 99 110 62 121 140 136 121 122 120
Finland ............ 72 83 63 141 140 132 117 116 110
France ............. 71 91 58 104 116 113 98 98 94
Germany, Former West 99 124 73 147 184 176 152 147 140
Germany, Unified ... - - - - 178 171 147 143 136
Greece ............. 27 38 28 45 53 54 50 48 -
Ireland ............ 48 60 46 78 79 79 74 72 71
Italy .............. 73 83 59 117 94 100 96 92 86
Luxembourg ......... 102 122 60 112 136 127 104 100 -
Netherlands ........ 103 122 67 121 140 131 115 113 109
Norway ............. 106 117 80 144 142 142 130 126 125
Portugal ........... 25 21 12 25 31 32 29 29 -
Spain .............. 40 60 36 76 75 76 67 65 63
Sweden ............. 113 127 74 140 125 138 122 118 112
Switzerland ........ 96 112 74 140 170 160 132 131 123
United Kingdom ..... 53 77 48 85 80 80 85 88 86
Trade-weighted measures 2,3
All 28 foreign econ. 60 67 52 83 95 91 84 79 79
OECD 4 ............. 67 74 57 90 103 98 90 85 86
less Mexico, Korea5 76 84 65 104 118 112 103 98 98
Europe ............. 80 100 61 116 128 125 112 110 106
Asian NIEs ......... 8 12 13 25 37 39 37 31 32
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 $9.87 $13.01 $14.91 $17.19 $17.70 $18.27 $18.66 $19.20
Canada ............. 5.96 8.67 10.95 15.95 16.10 16.64 16.47 15.60 15.60
Mexico ............. 1.47 2.21 1.59 1.58 1.51 1.54 1.78 1.84 2.12
Asia and Oceania
Australia .......... 5.62 8.47 8.20 13.07 15.27 16.88 16.58 14.92 15.89
Hong Kong SAR 1 .... .76 1.51 1.73 3.20 4.82 5.14 5.42 5.47 5.44
Israel ............. 2.25 3.79 4.06 8.55 10.54 11.32 12.04 12.02 11.91
Japan .............. 3.00 5.52 6.34 12.80 23.82 21.00 19.54 18.29 20.89
Korea .............. .32 .96 1.23 3.71 7.29 8.22 7.86 5.39 6.71
New Zealand ........ 3.15 5.22 4.38 8.17 9.91 10.81 10.81 9.01 9.14
Singapore .......... .84 1.49 2.47 3.78 7.33 8.32 8.24 7.77 7.18
Sri Lanka .......... .28 .22 .28 .35 .48 .48 .46 .47 -
Taiwan ............. .40 1.00 1.50 3.93 5.94 5.95 5.90 5.27 5.62
Europe
Austria ............ 4.51 8.88 7.58 17.75 25.32 24.80 21.97 22.21 21.83
Belgium ............ 6.41 13.11 8.97 19.17 26.65 25.97 22.88 23.20 22.82
Denmark ............ 6.28 10.83 8.13 18.04 24.07 24.11 22.03 22.69 22.96
Finland ............ 4.61 8.24 8.16 21.03 24.10 23.41 21.32 21.66 21.10
France ............. 4.52 8.94 7.52 15.49 20.01 19.93 17.99 18.28 17.98
Germany, Former West 6.31 12.25 9.53 21.88 31.58 31.20 27.68 27.52 26.93
Germany, Unified ... - - - - 30.65 30.26 26.84 26.76 26.18
Greece ............. 1.69 3.73 3.66 6.76 9.17 9.59 9.20 8.91 -
Ireland ............ 3.03 5.95 5.92 11.66 13.61 13.91 13.61 13.39 13.57
Italy .............. 4.67 8.15 7.63 17.45 16.22 17.75 17.57 17.11 16.60
Luxembourg ......... 6.50 12.03 7.81 16.74 23.35 22.55 19.02 18.74 -
Netherlands ........ 6.58 12.06 8.75 18.06 24.12 23.22 20.98 21.17 20.94
Norway ............. 6.77 11.59 10.37 21.47 24.38 25.05 23.72 23.50 23.91
Portugal ........... 1.58 2.06 1.53 3.77 5.37 5.58 5.38 5.48 -
Spain .............. 2.53 5.89 4.66 11.38 12.88 13.51 12.24 12.14 12.11
Sweden ............. 7.18 12.51 9.66 20.93 21.44 24.37 22.22 22.02 21.58
Switzerland ........ 6.09 11.09 9.66 20.86 29.30 28.34 24.19 24.38 23.56
United Kingdom ..... 3.37 7.56 6.27 12.70 13.67 14.09 15.47 16.43 16.56
Trade-weighted measures 2,3
All 28 foreign econ. 3.83 6.60 6.75 12.36 16.36 16.09 15.30 14.72 15.24
OECD 4 ............. 4.25 7.30 7.40 13.49 17.72 17.36 16.45 15.85 16.44
less Mexico, Korea5 4.82 8.30 8.48 15.54 20.36 19.88 18.79 18.21 18.80
Europe ............. 5.10 9.90 7.96 17.31 21.97 22.07 20.43 20.61 20.31
Asian NIEs ......... .52 1.17 1.65 3.72 6.41 6.92 6.83 5.83 6.20
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 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 1975-99 1975-80 1980-85 1985-90 1990-95 1995-99 1997 1998 1999
North America
United States ...... 4.7 9.2 5.7 2.8 2.9 2.8 3.2 2.1 2.9
Canada ............. 4.1 7.8 4.8 7.8 .2 -.8 -1.0 -5.3 .0
Mexico ............. 1.5 8.5 -6.4 -.1 -.9 8.9 15.6 3.4 15.2
Asia and Oceania
Australia .......... 4.4 8.5 -.6 9.8 3.2 1.0 -1.8 -10.0 6.5
Hong Kong SAR 1 .... 8.5 14.7 2.8 13.1 8.5 3.1 5.4 .9 -.5
Israel ............. 7.2 11.0 1.4 16.1 4.3 3.1 6.4 -.2 -.9
Japan .............. 8.4 13.0 2.8 15.1 13.2 -3.2 -7.0 -6.4 14.2
Korea .............. 13.5 24.6 5.1 24.7 14.5 -2.1 -4.4 -31.4 24.5
New Zealand ........ 4.5 10.6 -3.4 13.3 3.9 -2.0 .0 -16.7 1.4
Singapore .......... 9.4 12.1 10.6 8.9 14.2 -.5 -1.0 -5.7 -7.6
Sri Lanka .......... (2)2.3 -4.7 4.9 4.6 6.5 - -4.2 2.2 -
Taiwan ............. 11.6 20.1 8.4 21.2 8.6 -1.4 -.8 -10.7 6.6
Europe
Austria ............ 6.8 14.5 -3.1 18.6 7.4 -3.6 -11.4 1.1 -1.7
Belgium ............ 5.4 15.4 -7.3 16.4 6.8 -3.8 -11.9 1.4 -1.6
Denmark ............ 5.6 11.5 -5.6 17.3 5.9 -1.2 -8.6 3.0 1.2
Finland ............ 6.5 12.3 -.2 20.8 2.8 -3.3 -8.9 1.6 -2.6
France ............. 5.9 14.6 -3.4 15.5 5.3 -2.6 -9.7 1.6 -1.6
Germany, Former West 6.2 14.2 -4.9 18.1 7.6 -3.9 -11.3 -.6 -2.1
Germany, Unified ... - - - - - -3.9 -11.3 -.3 -2.2
Greece ............. (2)7.5 17.2 -.4 13.1 6.3 - -4.1 -3.2 -
Ireland ............ 6.4 14.4 -.1 14.5 3.1 -.1 -2.2 -1.6 1.3
Italy .............. 5.4 11.8 -1.3 18.0 -1.5 .6 -1.0 -2.6 -3.0
Luxembourg ......... (2)4.7 13.1 -8.3 16.5 6.9 - -15.7 -1.5 -
Netherlands ........ 4.9 12.9 -6.2 15.6 6.0 -3.5 -9.6 .9 -1.1
Norway ............. 5.4 11.4 -2.2 15.7 2.6 -.5 -5.3 -.9 1.7
Portugal ........... (2)5.6 5.4 -5.8 19.8 7.3 - -3.6 1.9 -
Spain .............. 6.7 18.4 -4.6 19.6 2.5 -1.5 -9.4 -.8 -.2
Sweden ............. 4.7 11.7 -5.0 16.7 .5 .2 -8.8 -.9 -2.0
Switzerland ........ 5.8 12.7 -2.7 16.6 7.0 -5.3 -14.6 .8 -3.4
United Kingdom ..... 6.9 17.5 -3.7 15.2 1.5 4.9 9.8 6.2 .8
Trade-weighted measures 3,4
All 28 foreign econ. 6.4 12.5 1.0 12.8 5.6 -.4 -1.8 -4.1 5.1
less Mexico, Israel 6.9 13.0 1.7 14.1 6.3 -1.4 -3.8 -5.0 4.1
OECD 5 ............. 5.9 12.0 .1 12.4 5.1 -.5 -2.2 -3.9 5.7
less Mexico, Korea6 6.0 11.8 .7 13.3 5.3 -1.6 -4.4 -3.2 3.4
Europe ............. 6.0 14.5 -4.1 16.7 4.4 -1.2 -5.6 1.1 -1.3
Asian NIEs ......... 11.2 18.9 7.0 18.4 11.3 -.7 -.8 -13.6 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 .. 6.36 9.87 13.01 14.91 17.19 17.70 18.27 18.66 19.20
Canada ......... 6.06 10.13 14.95 18.62 22.10 22.69 22.81 23.15 23.17
Mexico ......... 18 51 409 4440 9.69 11.68 14.12 16.84 20.24
Asia and Oceania
Australia ...... 4.30 7.43 11.70 16.74 20.62 21.56 22.30 23.73 24.61
Hong Kong SAR 1 3.73 7.50 13.46 24.91 37.30 39.74 41.99 42.39 42.20
Israel ......... 1.44 19.42 4.79 17.24 31.73 36.14 41.52 45.67 49.29
Japan .......... 889 1245 1512 1856 2238 2285 2367 2396 2375
Korea .......... 157 583 1074 2623 5620 6611 7471 7545 7987
New Zealand .... 2.60 5.37 8.81 13.71 15.10 15.72 16.30 16.81 17.27
Singapore ...... 2.00 3.20 5.43 6.85 10.39 11.73 12.25 12.99 12.17
Sri Lanka ...... 1.97 3.58 7.58 14.05 24.45 26.49 26.86 30.10 -
Taiwan ......... 15.17 36.13 59.60 105.69 157.30 163.48 169.86 176.81 181.69
Europe
Austria ........ 78.46 114.78 156.75 201.07 255.24 262.64 268.20 274.97 281.99
Belgium ........ 235.10 382.88 532.39 640.60 785.47 804.27 819.51 842.42 864.11
Denmark ........ 36.00 60.98 86.18 111.65 134.77 139.86 145.60 152.11 160.49
Finland ........ 16.88 30.64 50.56 80.56 105.47 107.55 110.78 115.81 117.75
France ......... 19.34 37.73 67.49 84.38 99.77 101.97 105.05 107.88 110.71
Germany, F. West 15.48 22.23 28.04 35.37 45.22 46.95 48.02 48.44 49.44
Germany, Unified - - - - 43.89 45.54 46.57 47.09 48.06
Greece ......... 55 159 506 1071 2124 2309 2514 2632 -
Ireland ........ 1.36 2.89 5.55 7.03 8.49 8.70 8.98 9.40 10.03
Italy .......... 3048 6966 14563 20900 26425 27394 29945 29714 30170
Luxembourg ..... 239 352 464 559 688 698 680 680 -
Netherlands .... 16.59 23.93 29.04 32.90 38.69 39.15 40.98 42.01 43.32
Norway ......... 35.29 57.20 89.11 134.26 154.44 161.78 168.10 177.46 186.67
Portugal ....... 40.26 103.28 263.37 538.11 804.35 860.39 943.62 988.13 -
Spain .......... 145 422 792 1161 1604 1712 1793 1814 1891
Sweden ......... 29.73 52.91 83.12 123.98 153.14 163.46 169.87 175.11 178.52
Switzerland .... 15.72 18.57 23.71 29.00 34.61 35.03 35.10 35.37 35.45
United Kingdom . 1.52 3.25 4.84 7.12 8.66 9.03 9.44 9.91 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 1975-99 1975-80 1980-85 1985-90 1990-95 1995-99 1997 1998 1999
North America
United States ...... 4.7 9.2 5.7 2.8 2.9 2.8 3.2 2.1 2.9
Canada ............. 5.7 10.8 8.1 4.5 3.5 1.2 .5 1.5 .1
Mexico ............. 34.0 23.2 51.6 61.1 16.9 20.2 20.9 19.3 20.2
Asia and Oceania
Australia .......... 7.5 11.6 9.5 7.4 4.3 4.5 3.4 6.4 3.7
Hong Kong SAR 1 .... 10.6 15.0 12.4 13.1 8.4 3.1 5.7 1.0 -.4
Israel ............. 54.5 68.3 200.9 29.2 13.0 11.6 14.9 10.0 7.9
Japan .............. 4.2 7.0 4.0 4.2 3.8 1.5 3.6 1.2 -.9
Korea .............. 17.8 30.0 13.0 19.6 16.5 9.2 13.0 1.0 5.9
New Zealand ........ 8.2 15.6 10.4 9.2 2.0 3.4 3.7 3.1 2.7
Singapore .......... 7.8 9.9 11.2 4.8 8.7 4.0 4.4 6.0 -6.3
Sri Lanka ..........(2)12.6 12.7 16.2 13.1 11.7 - 1.4 12.1 -
Taiwan ............. 10.9 19.0 10.5 12.1 8.3 3.7 3.9 4.1 2.8
Europe
Austria ............ 5.5 7.9 6.4 5.1 4.9 2.5 2.1 2.5 2.6
Belgium ............ 5.6 10.2 6.8 3.8 4.2 2.4 1.9 2.8 2.6
Denmark ............ 6.4 11.1 7.2 5.3 3.8 4.5 4.1 4.5 5.5
Finland ............ 8.4 12.7 10.5 9.8 5.5 2.8 3.0 4.5 1.7
France ............. 7.5 14.3 12.3 4.6 3.4 2.6 3.0 2.7 2.6
Germany, Former West 5.0 7.5 4.8 4.8 5.0 2.3 2.3 .9 2.1
Germany, Unified ... - - - - - 2.3 2.3 1.1 2.0
Greece .............(2)18.3 23.7 26.1 16.2 14.7 - 8.9 4.7 -
Ireland ............ 8.7 16.3 13.9 4.8 3.8 4.3 3.2 4.7 6.7
Italy .............. 10.0 18.0 15.9 7.5 4.8 3.4 9.3 -.8 1.5
Luxembourg ......... (2)4.7 8.1 5.7 3.8 4.2 - -2.6 .0 -
Netherlands ........ 4.1 7.6 3.9 2.5 3.3 2.9 4.7 2.5 3.1
Norway ............. 7.2 10.1 9.3 8.5 2.8 4.9 3.9 5.6 5.2
Portugal ...........(2)14.9 20.7 20.6 15.4 8.4 - 9.7 4.7 -
Spain .............. 11.3 23.8 13.4 7.9 6.7 4.2 4.7 1.2 4.2
Sweden ............. 7.8 12.2 9.5 8.3 4.3 3.9 3.9 3.1 1.9
Switzerland ........ 3.4 3.4 5.0 4.1 3.6 .6 .2 .8 .2
United Kingdom ..... 8.3 16.4 8.3 8.0 4.0 4.3 4.5 5.0 3.3
Trade-weighted measures 3,4
All 28 foreign econ. 10.0 13.6 14.0 11.7 6.3 4.4 5.2 3.8 2.9
less Mexico, Israel 6.9 12.0 8.0 6.4 5.1 2.6 3.4 2.1 1.0
OECD 5 ............. 9.4 12.8 12.3 11.7 5.9 4.4 5.1 3.7 3.2
less Mexico, Korea6 5.9 10.5 7.3 5.0 3.9 2.1 2.7 1.9 .9
Europe ............. 7.0 12.4 8.7 5.8 4.4 3.1 3.9 2.4 2.7
Asian NIEs ......... 12.2 19.6 11.6 12.9 10.7 5.2 6.8 3.1 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
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 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 .... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Canada ........... 1.017 1.169 1.366 1.167 1.373 1.364 1.385 1.484 1.486
Mexico ........... 12.50 22.97 256.9 2813 6.419 7.600 7.918 9.152 9.553
Asia and Oceania
Australia ........ .7647 .8772 1.428 1.281 1.350 1.277 1.345 1.590 1.549
Hong Kong SAR 1 .. 4.939 4.976 7.791 7.790 7.736 7.735 7.743 7.747 7.759
Israel ........... .6390 5.124 1.179 2.016 3.011 3.192 3.449 3.800 4.140
Japan ............ 296.7 225.7 238.5 145.0 93.96 108.8 121.1 131.0 113.7
Korea ............ 484.0 607.4 870.0 707.8 771.3 804.5 950.8 1400 1190
New Zealand ...... .8254 1.027 2.010 1.677 1.524 1.454 1.509 1.865 1.889
Singapore ........ 2.371 2.141 2.200 1.813 1.417 1.410 1.486 1.672 1.695
Sri Lanka ........ 7.050 16.53 27.16 40.06 51.25 55.27 59.00 64.59 -
Taiwan ........... 38.00 36.02 39.85 26.92 26.50 27.47 28.78 33.55 32.32
Europe
Austria .......... 17.40 12.93 20.68 11.33 10.08 10.59 12.21 12.38 12.92
Belgium .......... 36.69 29.20 59.34 33.42 29.47 30.97 35.81 36.31 37.87
Denmark .......... 5.735 5.629 10.60 6.190 5.600 5.800 6.609 6.703 6.990
Finland .......... 3.665 3.719 6.197 3.830 4.376 4.595 5.196 5.347 5.581
France ........... 4.282 4.220 8.980 5.447 4.986 5.116 5.839 5.900 6.157
Germany, F. West 2.455 1.815 2.942 1.617 1.432 1.505 1.735 1.760 1.836
Germany, Unified - - - - 1.432 1.505 1.735 1.760 1.836
Greece ........... 32.29 42.62 138.1 158.5 231.7 240.7 273.1 295.5 -
Ireland .......... .4500 .4860 .9379 .6033 .6236 .6252 .6595 .7019 .7393
Italy ............ 652.4 855.1 1909 1198 1629 1543 1704 1737 1818
Luxembourg ....... 36.78 29.24 59.38 33.42 29.48 30.96 35.77 36.30 -
Netherlands ...... 2.523 1.985 3.318 1.822 1.604 1.686 1.953 1.984 2.069
Norway ........... 5.214 4.936 8.593 6.254 6.336 6.459 7.086 7.552 7.807
Portugal ......... 25.45 50.05 172.1 142.7 149.9 154.3 175.4 180.3 -
Spain ............ 57.39 71.64 170.0 102.0 124.6 126.7 146.5 149.4 156.2
Sweden ........... 4.142 4.229 8.603 5.923 7.141 6.708 7.645 7.952 8.274
Switzerland ...... 2.581 1.675 2.455 1.390 1.181 1.236 1.451 1.451 1.505
United Kingdom ... .4501 .4300 .7708 .5605 .6335 .6407 .6106 .6034 .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 1975-99 1975-80 1980-85 1985-90 1990-95 1995-99 1997 1998 1999
North America
United States ...... - - - - - - - - -
Canada ............. -1.6 -2.7 -3.1 3.2 -3.2 -2.0 -1.5 -6.7 -.1
Mexico ............. -24.2 -11.5 -38.3 -38.0 -15.2 -9.5 -4.0 -13.5 -4.2
Asia and Oceania
Australia .......... -2.9 -2.7 -9.3 2.2 -1.0 -3.4 -5.1 -15.4 2.6
Hong Kong SAR 1 .... -1.9 -.1 -8.6 .0 .1 -.1 -.1 -.1 -.2
Israel ............. -30.6 -34.1 -66.3 -10.2 -7.7 -7.7 -7.5 -9.2 -8.2
Japan .............. 4.1 5.6 -1.1 10.5 9.1 -4.7 -10.2 -7.6 15.2
Korea .............. -3.7 -4.4 -6.9 4.2 -1.7 -10.3 -15.4 -32.1 17.6
New Zealand ........ -3.4 -4.3 -12.6 3.7 1.9 -5.2 -3.6 -19.1 -1.3
Singapore .......... 1.4 2.1 -.5 3.9 5.1 -4.4 -5.1 -11.1 -1.4
Sri Lanka ..........(2)-9.2 -15.7 -9.5 -7.5 -4.8 - -6.3 -8.7 -
Taiwan ............. .7 1.1 -2.0 8.2 .3 -4.8 -4.6 -14.2 3.8
Europe
Austria ............ 1.2 6.1 -9.0 12.8 2.4 -6.0 -13.3 -1.4 -4.2
Belgium ............ -.1 4.7 -13.2 12.2 2.5 -6.1 -13.5 -1.4 -4.1
Denmark ............ -.8 .4 -11.9 11.4 2.0 -5.4 -12.2 -1.4 -4.1
Finland ............ -1.7 -.3 -9.7 10.1 -2.6 -5.9 -11.6 -2.8 -4.2
France ............. -1.5 .3 -14.0 10.5 1.8 -5.1 -12.4 -1.0 -4.2
Germany, Former West 1.2 6.2 -9.2 12.7 2.5 -6.0 -13.3 -1.4 -4.1
Germany, Unified ... - - - - - -6.0 -13.3 -1.4 -4.1
Greece .............(2)-9.2 -5.4 -21.0 -2.7 -7.3 - -11.9 -7.6 -
Ireland ............ -2.0 -1.5 -12.3 9.2 -.7 -4.2 -5.2 -6.0 -5.1
Italy .............. -4.2 -5.3 -14.8 9.8 -6.0 -2.7 -9.4 -1.9 -4.5
Luxembourg ......... (2).1 4.7 -13.2 12.2 2.5 - -13.4 -1.5 -
Netherlands ........ .8 4.9 -9.8 12.7 2.6 -6.2 -13.7 -1.6 -4.1
Norway ............. -1.7 1.1 -10.5 6.6 -.3 -5.1 -8.8 -6.2 -3.3
Portugal ...........(2)-8.2 -12.7 -21.9 3.8 -1.0 - -12.0 -2.7 -
Spain .............. -4.1 -4.3 -15.9 10.8 -3.9 -5.5 -13.5 -1.9 -4.4
Sweden ............. -2.8 -.4 -13.2 7.8 -3.7 -3.6 -12.3 -3.9 -3.9
Switzerland ........ 2.3 9.0 -7.4 12.0 3.3 -5.9 -14.8 .0 -3.6
United Kingdom ..... -1.3 .9 -11.0 6.6 -2.4 .6 4.9 1.2 -2.4
Trade-weighted measures 3,4
All 28 foreign econ. -2.6 -.5 -9.4 2.9 -.4 -4.4 -6.6 -7.6 2.3
less Mexico, Israel .0 1.0 -5.8 7.3 1.2 -3.8 -6.9 -6.9 3.1
OECD 5 ............. -2.6 -.3 -9.6 2.8 -.6 -4.5 -7.0 -7.2 2.5
less Mexico, Korea6 .2 1.3 -6.1 7.9 1.4 -3.5 -6.8 -5.0 2.5
Europe ............. -.9 2.0 -11.7 10.3 .0 -4.0 -9.1 -1.2 -3.8
Asian NIEs ......... -.8 -.5 -4.2 4.9 .7 -5.5 -7.0 -16.3 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 trade-
weighted 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.