Full text of 2004 : Text File, USDL: 05-2197
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Internet address: http://www.bls.gov/fls USDL:05-2197
Technical information: (202) 691-5654 For Release: 10:00 A.M. EST
Media contact: (202) 691-5902 Friday, November 18, 2005
INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 2004*
Average hourly compensation costs in U.S. dollars for production workers in
manufacturing in 31 foreign economies climbed to 78 percent of the U.S. level in
2004, up from 73 percent in 2003, according to data issued by the Bureau of Labor
Statistics, U.S. Department of Labor. Compensation costs relative to the United
States rose in nearly all the economies covered in 2004, with Europe showing a
relatively large increase. (See table 1.) Data for Hungary, a relatively low
labor cost country, are included in this release for the first time.
In the United States, hourly compensation costs for production workers in
manufacturing increased 4.0 percent in 2004, to $23.17. Although average costs
in the United States were higher than those in all the economies covered outside
of Europe, 12 of the European countries had higher hourly compensation costs than
the United States, in a few cases more than 40 percent higher. Trade-weighted
average costs increased 3.0 percent in the combined 31 foreign economies in 2004,
when measured in national currency terms. This was less than the increase in the
United States, but the value of foreign currencies rose 5.8 percent against the
U.S. dollar, resulting in a rise in hourly compensation costs in the foreign
economies of 8.9 percent on a U.S. dollar basis. (See chart 1 and table A.)
Chart 1. Hourly compensation costs in U.S. dollars for
production workers in manufacturing, 1975-2004
PRINTED COPY CONTAINS CHART AT THIS POINT.
* Data for some countries have been revised to reflect revisions provided to BLS
subsequent to this news release. See Hourly Compensation Costs for Production
Workers in Manufacturing, 32 Countries or Areas, 22 Manufacturing Industries,
1992-2004 at http://www.bls.gov/fls/flshcindnaics.htm for the most recent data
Compensation costs expressed in U.S. dollars
This release provides manufacturing compensation data in terms of both
national currencies and U.S. dollars. While data on a national currency basis
show underlying wage and benefit trends within each country, frequent and sometimes
sharp changes in currency exchange rates can have a large impact on compensation
costs on a U.S. dollar basis. Data on a U.S. dollar basis are calculated by
dividing compensation costs in the national currency by the exchange rate
(expressed as national currency units per U.S. dollar). Compensation costs on a
U.S. dollar basis are often used as indicators of competitiveness of manufactured
goods in world trade and are the focus of the following discussion.
Compensation costs for production workers in manufacturing, measured in U.S.
dollars, continued to rise strongly in 2004 in most of the foreign economies, with
most countries showing double-digit increases. Only three economies--
Hong Kong SAR, Mexico, and Singapore--recorded slower rates of growth than the
United States. As a result, the rate of compensation increase in a trade-weighted
average of the foreign economies was 8.9 percent in 2004, well above the 5.7 percent
historical average for the series. (See table A and table 3.)
Chart 2. Indexes of hourly compensation costs in U.S. dollars
for production workers in manufacturing, 2004
PRINTED COPY CONTAINS CHART AT THIS POINT.
The continued strength of European currencies in 2004 drove manufacturing
compensation costs in Europe up at more than three times the rate of U.S. costs
when measured in U.S. dollars (12.7 versus 4.0 percent), even though European
compensation costs on a national currency basis increased at a slower pace than
those in the U.S. (2.4 versus 4.0 percent). Costs in Europe, on average, are
now almost $4 higher on a per hour basis than in the United States. However,
there is great variation in compensation costs among the European countries covered.
For example, hourly compensation costs in Europe ranged from $5.43 in the Czech
Republic and $5.72 in Hungary to six times that level in Norway ($34.64), the
highest labor cost country in these comparisons. (See table 2.)
Outside of Europe, changes in manufacturing compensation costs varied
considerably in 2004. Canadian compensation costs measured in U.S. dollars
continued to grow strongly in 2004 (10.6 percent), boosted by an appreciation
of the Canadian dollar against the U.S. dollar. Similarly, strong currencies led
to large increases in the compensation costs of New Zealand and Australia (16.8 and
16.7 percent, respectively). The only other non-European countries to exhibit
double-digit growth were Korea and Brazil (14.9 and 10.9 percent, respectively).
Korea�s increase in labor costs was largely due to an increase in compensation
costs measured in the national currency. This also was true to a lesser extent
in Brazil. At the other end of the spectrum, because the peso depreciated against
the dollar, Mexico showed a negligible increase in compensation costs measured in
U.S. dollars (0.4 percent) despite a relatively large increase in costs on a
national currency basis.
Exchange rates
The trade-weighted value of the currencies of the 31 foreign economies
against the U.S. dollar increased 5.8 percent between 2003 and 2004. This
increase is less than that from 2002 to 2003 (+8.4 percent), but well above
the average annual change since 1975 (-3.8 percent). The currencies in many
countries appreciated sharply in 2004, while only one currency--the Mexican
peso--depreciated against the dollar. In general, the European currencies
appreciated the most in 2004, rising 10.0 percent. (See table 5.)
The movements of the foreign currencies relative to the U.S. dollar in
2004 had a significant influence on hourly manufacturing compensation costs
measured in U.S. dollars. Hourly compensation costs on a national currency
basis in the 31 foreign economies rose 3.0 percent, less than in the United
States, but, when adjusted for a 5.8 percent appreciation of the foreign
currencies against the U.S. dollar, those costs increased 8.9 percent, much
higher than in the United States. The effect that exchange rate changes can
have on hourly compensation costs is particularly evident when comparing
European labor costs with those of the Asian Newly Industrialized Economies
(Asian NIEs). On a national currency basis, the increase in hourly compensation
costs in the Asian NIEs (4.5 percent) was two percentage points higher than the
increase in Europe (2.4 percent). When adjusted for changes in exchange rates,
however, Europe�s increase in costs on a U.S. dollar basis was five percentage
points higher than in the Asian NIEs (12.7 versus 7.8 percent).
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, 2003-2004
Hourly Hourly
Country compensation, compensation,
or area national Exchange U.S.
currency Rates dollars
Americas
United States 4.0 - 4.0
Brazil 5.5 5.1 10.9
Canada 2.8 7.6 10.6
Mexico 5.0 -4.4 .4
Asia and Oceania
Australia 3.4 12.9 16.7
Hong Kong SAR 1 -.6 .0 -.6
Israel 2.8 1.6 4.5
Japan .6 7.1 7.8
Korea 10.3 4.1 14.9
New Zealand 2.3 14.2 16.8
Singapore .7 3.1 3.8
Sri Lanka - - -
Taiwan 1.6 3.1 4.8
Europe
Austria 1.7 9.9 11.8
Belgium 2.9 9.9 13.1
Czech Republic 4.8 9.8 15.0
Denmark 1.9 9.8 11.9
Finland 3.0 9.9 13.2
France 2.9 9.9 13.0
Germany -.1 9.9 9.8
Greece - - -
Hungary 7.8 10.6 19.2
Ireland 4.6 9.9 14.9
Italy 2.9 9.9 13.1
Luxembourg 4.6 9.9 14.9
Netherlands 1.9 9.9 12.0
Norway 4.5 5.0 9.8
Portugal 2.5 9.9 12.6
Spain 4.0 9.9 14.3
Sweden 2.6 10.0 12.8
Switzerland .5 8.2 8.7
United Kingdom 4.1 12.0 16.6
Trade-weighted measures 2,3
All 31 foreign economies 3.0 5.8 8.9
OECD 4 3.2 6.1 9.4
Europe 2.4 10.0 12.7
Asian NIEs 4.5 3.1 7.8
1 Hong Kong Special Administrative Region of China.
2 Because data for Germany are not available before 1993, data for only
the former West Germany are included in the trade-weighted measures.
3 The 2003-2004 percent changes for the trade-weighted measures are based
upon the changes for the countries or areas for which 2004 data are
available.
4 OECD refers to the Organization for Economic Cooperation and Development.
Additional data available
In addition to the compensation cost measures covered in this news release,
supplementary tables are available for comparative levels of hourly compensation
costs, hourly direct pay, pay for time worked, and the structure of compensation
for production workers in manufacturing for all years from 1975 through 2004.
Data also are available for national currency hourly compensation and exchange
rates from 1975 through 2004 in the supplementary tables (http://www.bls.gov/fls).
BLS also computes comparative measures for 22 component manufacturing
industries. Data for the component industries are not included in this release;
in general, the data limitations for the component industries are greater than for
total manufacturing. Data are available upon request and via the Internet
(http://www.bls.gov/fls). The data for component industries currently are
available on a North American Industry Classification System (NAICS) basis
from 1992 to 2003. Data also are available on a Standard Industrial
Classification (SIC) basis from 1975 to 2002.
For further information, contact the Office of Productivity and
Technology by phone at 202-691-5654, by e-mail at flshc@bls.gov, or by mail at
Bureau of Labor Statistics, 2 Massachusetts Avenue, NE, Room 2150,
Washington, DC 20212.
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.
Table 1. Indexes of hourly compensation costs for production workers in manufacturing,
32 countries or areas and selected economic groups, selected years, 1975-2004
Country or area 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
Americas
United States............. 100 100 100 100 100 100 100 100 100 100
Brazil.................... - - - - - 18 14 12 12 13
Canada.................... 99 92 88 110 96 84 79 78 87 92
Mexico.................... 24 23 12 11 9 11 12 12 11 11
Asia and Oceania
Australia................. 91 88 64 88 89 73 65 72 89 100
Hong Kong SAR (1)......... 12 16 14 22 28 28 28 26 25 24
Israel.................... 33 35 29 52 55 58 60 52 52 53
Japan..................... 48 57 49 84 137 112 94 87 91 95
Korea..................... 5 10 10 25 42 42 37 41 45 50
New Zealand............... 50 53 34 54 57 40 37 40 50 56
Singapore................. 14 16 20 25 44 37 34 31 32 32
Sri Lanka................. 5 2 2 2 3 2 2 2 2 -
Taiwan.................... 6 10 12 26 34 31 29 26 26 26
Europe
Austria................... 73 92 60 121 147 97 93 97 114 122
Belgium................... 94 122 65 120 149 102 96 102 119 129
Czech Republic............ - - - - 15 14 15 18 21 23
Denmark................... 101 112 64 124 147 111 107 113 135 146
Finland................... 75 86 65 143 141 99 96 102 122 132
France.................... 73 92 59 104 112 78 76 80 95 103
Germany, Former West...... 102 126 74 146 182 120 114 118 139 147
Germany................... - - - - 175 115 109 113 133 140
Greece.................... 27 39 29 46 53 - - - - -
Hungary................... - - - - 16 14 15 18 22 25
Ireland................... 50 63 47 79 80 65 66 71 86 95
Italy..................... 75 84 60 116 91 70 66 69 81 88
Luxembourg................ 101 120 59 108 136 89 84 87 104 115
Netherlands............... 107 125 69 121 140 98 96 103 123 133
Norway.................... 112 123 82 147 144 115 113 128 142 150
Portugal.................. 25 21 12 24 30 23 22 24 28 30
Spain..................... 41 61 36 76 74 54 52 56 67 74
Sweden.................... 116 129 76 140 126 102 89 95 113 123
Switzerland............... 98 114 75 139 168 107 105 111 125 131
United Kingdom............ 54 78 49 85 80 85 81 85 95 107
Trade-weighted measures (2,3)
All 31 foreign economies.. 62 68 52 80 87 70 65 65 73 78
less Brazil, Czech
Republic, Hungary....... 62 68 52 80 88 71 67 67 75 79
OECD (4,5)................ 68 73 56 86 93 75 70 70 79 84
Europe (6)................ 81 100 62 115 125 92 88 93 108 117
European Union-15 (7)..... 80 100 61 113 124 92 88 92 108 117
Asian NIEs (8)............ 8 12 13 25 38 36 33 33 34 36
Dash means data not available.
(1) Hong Kong Special Administrative Region of China.
(2) Because data for Germany are not available before 1993, data for the former West
Germany only are included in the trade-weighted measures.
(3) For a description of trade-weighted measures and economic groups, see the Technical
Notes preceding these tables.
(4) Organization for Economic Cooperation and Development.
(5) Data for the Czech Republic for 1975-1994 and for Hungary for 1975-1993 are not
included.
(6) Data for the Czech Republic for 1975-1994 and for Hungary for 1975-1993 are not
included.
(7) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(8) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2005.
Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
32 countries or areas and selected economic groups, selected years, 1975-2004
Country or area 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004
Americas
United States............. 6.16 9.63 12.71 14.84 17.21 19.70 20.58 21.40 22.27 23.17
Brazil.................... - - - - - 3.51 2.95 2.56 2.74 3.03
Canada.................... 6.11 8.87 11.20 16.33 16.50 16.48 16.23 16.66 19.37 21.42
Mexico.................... 1.45 2.19 1.58 1.56 1.47 2.20 2.54 2.60 2.49 2.50
Asia and Oceania
Australia................. 5.60 8.44 8.18 13.09 15.36 14.39 13.30 15.41 19.78 23.09
Hong Kong SAR (1)......... 0.75 1.50 1.73 3.22 4.80 5.45 5.74 5.66 5.54 5.51
Israel.................... 2.03 3.41 3.66 7.71 9.50 11.49 12.25 11.03 11.66 12.18
Japan..................... 2.97 5.46 6.27 12.54 23.55 22.02 19.43 18.65 20.32 21.90
Korea..................... 0.32 0.95 1.23 3.70 7.28 8.24 7.72 8.77 10.03 11.52
New Zealand............... 3.10 5.14 4.30 8.01 9.78 7.91 7.53 8.60 11.04 12.89
Singapore................. 0.83 1.53 2.53 3.75 7.58 7.19 6.97 6.71 7.18 7.45
Sri Lanka................. 0.28 0.22 0.28 0.35 0.48 0.48 0.45 0.49 0.51 -
Taiwan.................... 0.37 0.99 1.49 3.85 5.87 6.19 6.05 5.64 5.69 5.97
Europe
Austria................... 4.50 8.87 7.57 17.91 25.26 19.17 19.08 20.69 25.32 28.29
Belgium................... 5.77 11.74 8.29 17.84 25.64 20.09 19.80 21.74 26.52 29.98
Czech Republic............ - - - - 2.53 2.83 3.13 3.83 4.72 5.43
Denmark................... 6.24 10.77 8.10 18.35 25.28 21.87 22.02 24.25 30.15 33.75
Finland................... 4.63 8.30 8.20 21.15 24.31 19.44 19.85 21.78 27.10 30.67
France.................... 4.50 8.90 7.48 15.36 19.26 15.46 15.65 17.12 21.14 23.89
Germany, Former West...... 6.26 12.16 9.46 21.71 31.41 23.71 23.51 25.31 30.99 34.05
Germany................... - - - - 30.09 22.67 22.48 24.20 29.63 32.53
Greece.................... 1.69 3.73 3.67 6.82 9.07 - - - - -
Hungary................... - - - - 2.69 2.79 3.16 3.92 4.80 5.72
Ireland................... 3.06 6.02 6.00 11.77 13.75 12.72 13.60 15.26 19.09 21.94
Italy..................... 4.64 8.09 7.56 17.28 15.69 13.84 13.61 14.75 18.11 20.48
Luxembourg................ 6.22 11.51 7.48 16.00 23.36 17.51 17.21 18.71 23.12 26.57
Netherlands............... 6.58 12.05 8.73 17.98 24.03 19.33 19.85 22.12 27.47 30.76
Norway.................... 6.90 11.80 10.47 21.76 24.84 22.66 23.29 27.29 31.56 34.64
Portugal.................. 1.52 1.98 1.46 3.59 5.09 4.49 4.59 5.07 6.24 7.02
Spain..................... 2.52 5.86 4.64 11.30 12.70 10.65 10.76 11.92 14.97 17.10
Sweden.................... 7.14 12.44 9.61 20.81 21.68 20.18 18.39 20.23 25.19 28.42
Switzerland............... 6.03 10.96 9.55 20.63 28.99 21.02 21.60 23.81 27.83 30.26
United Kingdom............ 3.35 7.52 6.22 12.61 13.79 16.73 16.75 18.25 21.20 24.71
Trade-weighted measures (2,3)
All 31 foreign economies.. 3.85 6.54 6.65 11.90 15.05 13.78 13.43 14.00 16.28 18.02
less Brazil, Czech
Republic, Hungary....... 3.85 6.54 6.65 11.90 15.11 14.06 13.71 14.29 16.63 18.41
OECD (4,5)................ 4.16 7.05 7.12 12.69 15.93 14.73 14.34 15.03 17.58 19.51
Europe (6)................ 4.99 9.67 7.85 17.05 21.50 18.08 18.11 19.80 24.10 27.08
European Union-15 (7)..... 4.92 9.59 7.74 16.84 21.40 18.13 18.12 19.78 24.14 27.17
Asian NIEs (8)............ 0.49 1.14 1.61 3.69 6.59 7.07 6.82 7.05 7.62 8.32
Dash means data not available.
(1) Hong Kong Special Administrative Region of China.
(2) Because data for Germany are not available before 1993, data for the former West
Germany only are included in the trade-weighted measures.
(3) For a description of trade-weighted measures and economic groups, see the Technical
Notes preceding these tables.
(4) Organization for Economic Cooperation and Development.
(5) Data for the Czech Republic for 1975-1994 and for Hungary for 1975-1993 are not
included.
(6) Data for the Czech Republic for 1975-1994 and for Hungary for 1975-1993 are not
included.
(7) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(8) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2005.
Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production
workers in manufacturing, 32 countries or areas and selected economic groups, selected
years, 1975-2004
Country or area 1975- 1975- 1980- 1985- 1990- 1995- 2000- 2002 2003 2004
2004(1) 1980 1985 1990 1995 2000 2004
Americas
United States............. 4.7 9.3 5.7 3.2 3.0 2.7 4.1 4.0 4.1 4.0
Brazil.................... - - - - - - -3.6 -13.2 6.8 10.9
Canada.................... 4.4 7.7 4.8 7.8 .2 .0 6.8 2.7 16.2 10.6
Mexico.................... 1.9 8.5 -6.3 -.2 -1.3 8.4 3.2 2.4 -4.3 .4
Asia and Oceania
Australia................. 5.0 8.6 -.6 9.9 3.3 -1.3 12.5 15.8 28.4 16.7
Hong Kong SAR (2)......... 7.1 14.8 2.8 13.2 8.3 2.6 .3 -1.4 -2.2 -.6
Israel.................... 6.4 11.0 1.4 16.1 4.3 3.9 1.5 -10.0 5.7 4.5
Japan..................... 7.1 13.0 2.8 14.8 13.4 -1.3 -.1 -4.0 9.0 7.8
Korea..................... 13.1 24.3 5.2 24.6 14.5 2.5 8.7 13.7 14.3 14.9
New Zealand............... 5.0 10.7 -3.5 13.3 4.1 -4.1 13.0 14.2 28.4 16.8
Singapore................. 7.8 12.9 10.6 8.2 15.1 -1.0 .9 -3.8 7.0 3.8
Sri Lanka................. 2.2 -5.0 5.2 4.7 6.4 .0 - 10.1 3.1 -
Taiwan.................... 10.1 21.8 8.4 21.0 8.8 1.1 -.9 -6.8 1.0 4.8
Europe
Austria................... 6.5 14.5 -3.1 18.8 7.1 -5.4 10.2 8.4 22.4 11.8
Belgium................... 5.8 15.3 -6.7 16.6 7.5 -4.8 10.5 9.8 22.0 13.1
Czech Republic............ - - - - - 2.3 17.6 22.3 23.3 15.0
Denmark................... 6.0 11.5 -5.5 17.8 6.6 -2.8 11.4 10.1 24.3 11.9
Finland................... 6.7 12.4 -.2 20.9 2.8 -4.4 12.1 9.7 24.4 13.2
France.................... 5.9 14.6 -3.4 15.5 4.6 -4.3 11.5 9.4 23.5 13.0
Germany, Former West...... 6.0 14.2 -4.9 18.1 7.7 -5.5 9.5 7.7 22.4 9.9
Germany................... - - - - - -5.5 9.4 7.6 22.4 9.8
Greece.................... 7.4 17.2 -.3 13.2 5.9 - - - - -
Hungary................... - - - - - .8 19.6 24.3 22.3 19.2
Ireland................... 7.0 14.5 -.1 14.4 3.2 -1.5 14.6 12.2 25.1 14.9
Italy..................... 5.3 11.8 -1.3 18.0 -1.9 -2.5 10.3 8.4 22.8 13.1
Luxembourg................ 5.1 13.1 -8.3 16.4 7.9 -5.6 11.0 8.7 23.6 14.9
Netherlands............... 5.5 12.9 -6.2 15.6 6.0 -4.3 12.3 11.4 24.2 12.0
Norway.................... 5.7 11.3 -2.4 15.8 2.7 -1.8 11.2 17.2 15.6 9.8
Portugal.................. 5.4 5.4 -5.8 19.7 7.3 -2.5 11.8 10.3 23.1 12.6
Spain..................... 6.8 18.4 -4.6 19.5 2.4 -3.5 12.6 10.8 25.5 14.3
Sweden.................... 4.9 11.7 -5.0 16.7 .8 -1.4 8.9 10.0 24.5 12.8
Switzerland............... 5.7 12.7 -2.7 16.7 7.0 -6.2 9.5 10.3 16.9 8.7
United Kingdom............ 7.1 17.5 -3.7 15.2 1.8 3.9 10.2 9.0 16.2 16.6
Trade-weighted measures (3,4)
All 31 foreign economies.. 5.7 12.1 .3 11.6 4.5 .6 6.1 3.8 12.5 8.9
less Brazil, Czech
Republic, Hungary....... 5.7 12.1 .3 11.6 4.5 .6 6.1 3.8 12.5 8.9
OECD (5,6)................ 5.4 11.7 -.4 11.2 3.9 .5 6.8 4.8 13.6 9.4
Europe (7)................ 6.1 14.4 -3.8 16.6 4.5 -2.7 10.8 9.4 21.7 12.7
European Union-15 (8)..... 6.2 14.5 -3.9 16.6 4.4 -2.6 10.8 9.3 22.0 12.9
Asian NIEs (9)............ 10.4 20.2 6.9 19.0 12.1 1.4 3.3 2.3 6.8 7.8
Rates of change based on compound rate method.
Dash means data not available.
(1) 1975-2003 for Sri Lanka. 1975-1998 for Greece.
(2) Hong Kong Special Administrative Region of China.
(3) Because data for Germany are not available before 1993, data for the former West
Germany only are included in the trade-weighted measures.
(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) Data for the Czech Republic and Hungary are not included for 1975-2004, 1975-1980,
1980-1985, 1985-1990, and 1990-1995.
(7) Data for the Czech Republic and Hungary are not included for 1975-2004, 1975-1980,
1980-1985, 1985-1990, and 1990-1995.
(8) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(9) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2005.
Table 4. Annual percent change in hourly compensation costs in national currency for
production workers in manufacturing, 32 countries or areas and selected economic groups,
selected years, 1975-2004
Country or area 1975- 1975- 1980- 1985- 1990- 1995- 2000- 2002 2003 2004
2004(1) 1980 1985 1990 1995 2000 2004
Americas
United States............. 4.7 9.3 5.7 3.2 3.0 2.7 4.1 4.0 4.1 4.0
Brazil.................... - - - - - - 8.4 7.8 12.4 5.5
Canada.................... 5.3 10.8 8.1 4.5 3.5 1.6 3.3 4.1 3.7 2.8
Mexico.................... 28.8 22.5 51.8 61.1 16.5 17.2 7.9 5.9 6.9 5.0
Asia and Oceania
Australia................. 7.1 11.6 9.6 7.5 4.3 3.6 6.1 10.1 7.0 3.4
Hong Kong SAR (2)......... 8.8 14.9 12.5 13.2 8.2 2.7 .3 -1.4 -2.3 -.6
Israel.................... 44.4 68.3 200.9 29.2 13.0 10.4 3.9 1.4 1.6 2.8
Japan..................... 3.5 7.0 3.9 4.0 4.0 1.4 .0 -1.2 .8 .6
Korea..................... 16.5 30.0 13.1 19.6 16.5 10.7 9.1 10.0 9.0 10.3
New Zealand............... 7.2 15.6 10.3 9.2 2.1 3.0 2.9 3.3 2.5 2.3
Singapore................. 6.6 10.6 11.2 4.1 9.6 2.9 .4 -3.9 4.2 .7
Sri Lanka................. 12.2 12.7 16.2 13.1 11.7 8.5 - 17.8 4.0 -
Taiwan.................... 9.6 20.5 10.6 11.8 8.5 4.5 .7 -4.9 .6 1.6
Europe
Austria................... 4.9 7.9 6.4 5.3 4.7 2.3 2.3 2.7 2.2 1.7
Belgium................... 5.4 10.1 7.5 3.9 4.9 3.0 2.6 3.9 1.9 2.9
Czech Republic............ - - - - - 10.3 6.3 5.3 6.2 4.8
Denmark................... 6.2 11.1 7.2 5.8 4.5 4.6 3.4 4.2 3.7 1.9
Finland................... 7.7 12.7 10.5 9.8 5.6 3.3 4.0 3.9 3.9 3.0
France.................... 6.7 14.3 12.3 4.5 2.8 2.7 3.5 3.6 3.1 2.9
Germany, Former West...... 4.4 7.5 4.8 4.8 5.1 2.2 1.6 2.0 2.2 .0
Germany................... - - - - - 2.2 1.6 1.9 2.2 -.1
Greece.................... 18.3 23.9 26.1 16.4 14.2 - - - - -
Hungary................... - - - - - 18.5 10.1 11.9 6.3 7.8
Ireland................... 8.3 16.2 14.0 4.8 3.8 4.8 6.4 6.3 4.5 4.6
Italy..................... 8.5 18.0 15.8 7.5 4.3 2.6 2.4 2.6 2.6 2.9
Luxembourg................ 4.7 8.0 5.7 3.8 5.2 2.1 3.0 3.0 3.2 4.6
Netherlands............... 4.2 7.6 3.9 2.5 3.3 3.7 4.2 5.5 3.7 1.9
Norway.................... 6.7 10.1 9.1 8.6 3.0 4.9 4.0 4.0 2.5 4.5
Portugal.................. 12.4 20.7 20.5 15.3 8.3 5.0 3.8 4.4 2.8 2.5
Spain..................... 10.0 23.8 13.4 7.9 6.6 3.9 4.5 4.9 4.8 4.0
Sweden.................... 7.0 12.2 9.5 8.3 4.7 3.6 3.1 3.4 3.5 2.6
Switzerland............... 3.1 3.4 5.0 4.1 3.6 .7 1.4 1.6 1.0 .5
United Kingdom............ 7.8 16.5 8.2 8.1 4.3 4.8 5.1 4.5 6.7 4.1
Trade-weighted measures (3,4)
All 31 foreign economies.. 10.6 15.0 18.4 15.5 7.1 5.4 3.8 3.4 3.9 3.0
less Brazil, Czech
Republic, Hungary....... 10.6 15.0 18.4 15.5 7.1 5.4 3.8 3.4 3.9 3.0
OECD (5,6)................ 10.2 13.9 15.9 15.8 6.9 5.4 4.1 4.0 4.2 3.2
Europe (7)................ 6.4 12.3 8.8 5.7 4.4 3.3 3.4 3.7 3.5 2.4
European Union-15 (8)..... 6.5 12.7 9.0 5.8 4.4 3.4 3.5 3.8 3.7 2.5
Asian NIEs (9)............ 11.6 21.6 11.9 13.6 11.7 6.3 3.8 1.5 4.1 4.5
Rates of change based on compound rate method.
Dash means data not available.
(1) 1975-2003 for Sri Lanka. 1975-1998 for Greece.
(2) Hong Kong Special Administrative Region of China.
(3) Because data for Germany are not available before 1993, data for the former West
Germany only are included in the trade-weighted measures.
(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) Data for the Czech Republic and Hungary are not included for 1975-2004, 1975-1980,
1980-1985, 1985-1990, and 1990-1995.
(7) Data for the Czech Republic and Hungary are not included for 1975-2004, 1975-1980,
1980-1985, 1985-1990, and 1990-1995.
(8) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(9) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2005.
Table 5. Annual percent change in exchange rates (U.S. dollars per national currency
unit), 32 countries or areas and selected economic groups, selected years, 1975-2004
Country or area 1975- 1975- 1980- 1985- 1990- 1995- 2000- 2002 2003 2004
2004(1) 1980 1985 1990 1995 2000 2004
Americas
United States............. - - - - - - - - - -
Brazil.................... - - - - - - -11.1 -19.4 -5.0 5.1
Canada.................... -.8 -2.7 -3.1 3.2 -3.2 -1.6 3.4 -1.3 12.1 7.6
Mexico.................... -20.9 -11.5 -38.3 -38.0 -15.2 -7.5 -4.3 -3.4 -10.5 -4.4
Asia and Oceania
Australia................. -2.0 -2.7 -9.3 2.2 -1.0 -4.7 6.1 5.2 20.0 12.9
Hong Kong SAR (2)......... -1.6 -.1 -8.6 .0 .1 -.1 .0 .0 .2 .0
Israel.................... -26.3 -34.1 -66.3 -10.2 -7.7 -5.9 -2.3 -11.2 4.0 1.6
Japan..................... 3.5 5.6 -1.1 10.5 9.1 -2.7 -.1 -2.9 8.0 7.1
Korea..................... -2.9 -4.4 -6.9 4.2 -1.7 -7.4 -.3 3.4 4.9 4.1
New Zealand............... -2.1 -4.3 -12.6 3.7 1.9 -7.0 9.8 10.5 25.3 14.2
Singapore................. 1.2 2.1 -.5 3.9 5.1 -3.9 .5 .1 2.8 3.1
Sri Lanka................. -8.9 -15.7 -9.5 -7.5 -4.8 -7.8 - -6.6 -.9 -
Taiwan.................... .4 1.1 -2.0 8.2 .3 -3.2 -1.6 -2.1 .4 3.1
Europe
Austria................... 1.6 6.1 -9.0 12.8 2.4 -7.5 7.7 5.6 19.8 9.9
Belgium................... .4 4.7 -13.2 12.2 2.5 -7.6 7.7 5.6 19.8 9.9
Czech Republic............ - - - - - -7.2 10.7 16.2 16.1 9.8
Denmark................... -.1 .4 -11.9 11.4 2.0 -7.1 7.8 5.7 19.9 9.8
Finland................... -.9 -.3 -9.7 10.1 -2.6 -7.4 7.7 5.6 19.8 9.9
France.................... -.7 .3 -14.0 10.5 1.8 -6.8 7.7 5.6 19.8 9.9
Germany, Former West...... 1.5 6.2 -9.2 12.7 2.5 -7.5 7.7 5.6 19.8 9.9
Germany................... - - - - - -7.5 7.7 5.6 19.8 9.9
Greece.................... -9.2 -5.4 -21.0 -2.7 -7.3 - - - - -
Hungary................... - - - - - -14.9 8.6 11.1 15.0 10.6
Ireland................... -1.2 -1.5 -12.3 9.2 -.7 -6.1 7.7 5.6 19.8 9.9
Italy..................... -3.0 -5.3 -14.8 9.8 -6.0 -4.9 7.7 5.6 19.8 9.9
Luxembourg................ .4 4.7 -13.2 12.2 2.5 -7.6 7.7 5.6 19.8 9.9
Netherlands............... 1.2 4.9 -9.8 12.7 2.6 -7.6 7.7 5.6 19.8 9.9
Norway.................... -.9 1.1 -10.5 6.6 -.3 -6.4 6.9 12.7 12.8 5.0
Portugal.................. -6.2 -12.7 -21.9 3.8 -1.0 -7.1 7.7 5.6 19.8 9.9
Spain..................... -2.9 -4.3 -15.9 10.8 -3.9 -7.1 7.7 5.6 19.8 9.9
Sweden.................... -2.0 -.4 -13.2 7.8 -3.7 -4.9 5.7 6.4 20.3 10.0
Switzerland............... 2.6 9.0 -7.4 12.0 3.3 -6.9 8.0 8.5 15.8 8.2
United Kingdom............ -.7 .9 -11.0 6.6 -2.4 -.8 4.8 4.3 8.9 12.0
Trade-weighted measures (3,4)
All 31 foreign economies.. -3.8 -2.0 -12.4 -.4 -2.2 -4.5 2.3 .4 8.4 5.8
less Brazil, Czech
Republic, Hungary....... -3.8 -2.0 -12.4 -.4 -2.2 -4.5 2.3 .4 8.4 5.8
OECD (5,6)................ -3.7 -1.7 -12.2 -.7 -2.5 -4.6 2.6 .8 9.1 6.1
Europe (7)................ -.2 2.0 -11.6 10.4 .1 -5.9 7.1 5.5 17.6 10.0
European Union-15 (8)..... -.3 1.7 -11.8 10.3 -.1 -5.8 7.1 5.3 17.7 10.1
Asian NIEs (9)............ -1.0 -1.0 -4.5 4.8 .4 -4.5 -.5 .7 2.5 3.1
Rates of change based on compound rate method.
Dash means data not available.
(1) 1975-2003 for Sri Lanka. 1975-1998 for Greece.
(2) Hong Kong Special Administrative Region of China.
(3) Because data for Germany are not available before 1993, data for the former West
Germany only are included in the trade-weighted measures.
(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) Data for the Czech Republic and Hungary are not included for 1975-2004, 1975-1980,
1980-1985, 1985-1990, and 1990-1995.
(7) Data for the Czech Republic and Hungary are not included for 1975-2004, 1975-1980,
1980-1985, 1985-1990, and 1990-1995.
(8) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(9) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2005.
Table 6. Hourly compensation costs in national currency units and exchange rates, 32
countries or areas, 2004
Country or area Compensation costs Exchange Rates
Americas
United States............. 23.17 1.000
Brazil.................... 8.87 2.926
Canada.................... 27.89 1.302
Mexico.................... 28.22 11.29
Asia and Oceania
Australia................. 31.35 1.358
Hong Kong SAR (1)......... 42.90 7.789
Israel.................... 54.60 4.482
Japan..................... 2370 108.2
Korea..................... 13190 1145
New Zealand............... 19.40 1.505
Singapore................. 12.59 1.690
Sri Lanka................. - -
Taiwan.................... 199.1 33.37
Europe
Austria................... 22.75 .8040
Belgium................... 24.11 .8040
Czech Republic............ 139.5 25.70
Denmark................... 202.1 5.989
Finland................... 24.66 .8040
France.................... 19.21 .8040
Germany................... 26.15 .8040
Greece.................... - -
Hungary................... 1160 202.7
Ireland................... 17.64 .8040
Italy..................... 16.46 .8040
Luxembourg................ 21.36 .8040
Netherlands............... 24.73 .8040
Norway.................... 233.5 6.740
Portugal.................. 5.65 .8040
Spain..................... 13.75 .8040
Sweden.................... 208.8 7.348
Switzerland............... 37.61 1.243
United Kingdom............ 13.49 .5460
Dash means data not available.
(1) Hong Kong Special Administrative Region of China.
National currency units are: United States, dollar; Brazil, real;
Canada, dollar; Mexico, peso; Australia, dollar; Hong Kong, dollar;
Israel, new shekel; Japan, yen; Korea, won; New Zealand, dollar;
Singapore, dollar; Sri Lanka, rupee; Taiwan, dollar; Austria, euro;
Belgium, euro; Czech Republic, koruna; Denmark, krone; Finland, euro;
France, euro; Germany, euro; Greece, euro; Hungary, forint; Ireland, euro;
Italy, euro; Luxembourg, euro; Netherlands, euro; Norway, krone;
Portugal, euro; Spain, euro; Sweden, krona; Switzerland, franc;
United Kingdom, pound.
Note: For data for all years 1975-2004, see the supplementary tables to this
news release at http://www.bls.gov/fls.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2005.
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.
The compensation measures in this news release are based on statistics
available to BLS as of September 2005. These measures may be revised as data
are collected to update compensation measures for component industries.
Beginning with this release, BLS has prepared measures of hourly
compensation costs for Hungary. Because of data limitations, the measures
cover only the years 1994-2004.
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 Labor 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 many 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, power plants); 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 non-survey years on the basis of other information
for most countries. The information used includes tabulations of employer social
security contribution rates provided by the International Social Security
Association, information on contractual and legislated fringe benefit changes from
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.
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. Greece joined on January 1,
2001. Currencies of EMU members were established at fixed conversion rates to
the euro, the official currency of the EMU. In this release, data on hourly
compensation costs in national currency and exchange rates for the EMU countries
relate to euros for 1999 to present; for the years 1975-1998 these data are
published in the old national currencies used in each country before the euro
was adopted. In order to include data on trends in national currency compensation
costs and exchange rates for the entire time period, BLS converts national currency
for 1975-1998 to a �euro� basis for calculation. The conversions for all years
1975-1998 are made using the official fixed conversion rates for 1999.
Industrial classification
The hourly compensation measures relate to manufacturing on a North American
Industry Classification System (NAICS) basis. NAICS is the common industrial
classification used by the United States, Canada, and Mexico. The NAICS definition
of manufacturing differs somewhat from the definition of manufacturing used in other
countries. Some industries that are not included in the NAICS definition of
manufacturing, such as publishing of books and sound recordings, some repair and
maintenance of equipment, and some business support services, are included in the
definition of manufacturing in most other industrial classifications. Other
industries, such as some processing of foods, some packaging, and retail sales of
bakery products from the production facility, are included in the NAICS definition
of manufacturing but not in the definition of manufacturing for most foreign
economies. Most of the differences other than the treatment of publishing are
very minor and do not have a noticeable impact on overall manufacturing averages.
BLS makes adjustments to remove publishing from manufacturing for the foreign
economies in which it is classified as a part of manufacturing, except for
Sri Lanka, for which the data necessary to remove publishing are not available.
For the countries for which adjustments are made, the effect of publishing on
manufacturing wages was estimated and removed using data from national sources,
the United Nations Industrial Statistics Database, the International Labor
Office (ILO), and other sources. Except for Hong Kong, the effect of removing
publishing from manufacturing does not change the level of hourly compensation
costs for any economy more than 1.5 percent. For Hong Kong, the effect of the
adjustments is 2 to 4 percent in several years.
Country notes
The following are exceptions to the standard coverage and definitions explained
above:
Australia. Compensation relates to production workers and non-production
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 63 percent of all persons employed in manufacturing
in 2001. 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. In 1986, handicraft employment was about 35 percent of all
manufacturing employment. In 2003, the handicraft blue collar workers� average
monthly gross wage was $1,893. The average monthly gross wage of manufacturing
blue-collar workers was $2,156.
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. Handicraft employment in Germany was 20.3 percent of all employment
in manufacturing in 1994. Average hourly earnings of production workers were about
3 percent lower in manufacturing including handicrafts than in manufacturing
excluding handicrafts in 1990.
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 new weights based on the relative dollar value of
U.S. trade in manufactured commodities (exports plus imports) with each country or
area in 2004. The trade data are compiled by the U.S. Census Bureau. Previously
1999 weights had been used. See the following table for a comparison of the 1999
and 2004 weights.
The only countries not covered in this report that accounted for as much as
one percent of such trade are China, Malaysia, Thailand, and India. An article
on manufacturing compensation costs in China is available on the BLS website at
http://www.bls.gov/opub/mlr/2005/08/art3full.pdf. The compensation data on China
are not directly comparable with the data for other countries found in this
news release.
Share of total U.S. imports and exports of manufactured products in 1999 and 2004
(in percent)
Country or area 1999 2004 Country or area 1999 2004
and economic trade trade and economic trade trade
group share share group share share
Brazil 1.5 1.7 Greece .1 .1
Canada 21.5 20.0 Hungary - .2
Mexico 11.8 12.5 Ireland 1.1 1.9
Italy 2.0 2.0
Australia 1.0 1.1 Luxembourg .1 .1
Hong Kong SAR (1) 1.5 1.3 Netherlands 1.6 1.8
Israel 1.1 1.2 Norway .2 .2
Japan 11.8 9.4 Portugal .2 .2
Korea 3.4 3.7 Spain .7 .7
New Zealand .2 .2 Sweden .8 .8
Singapore 2.2 1.8 Switzerland 1.1 1.0
Sri Lanka .1 .1 United Kingdom 4.6 3.8
Taiwan 3.4 2.9
Economic groups:
Austria .4 .4 31 foreign
Belgium 1.3 1.5 economies 82.3 74.6
Czech Republic .1 .1
Denmark .3 .3 OECD (3) 72.5 66.1
Finland .3 .3 Europe 22.7 22.2
France 2.7 2.7 European Union (4) 21.4 20.8
Germany (2) 5.2 5.6 Asian NIEs 10.5 9.1
(1) Hong Kong Special Administrative Region of China.
(2) Former West Germany.
(3) Organization for Economic Cooperation and Development.
(4) Includes the 15 European Union members prior to expansion on May 1, 2004
The countries included in the Organization for Economic Cooperation and
Development (OECD) trade-weighted measure are Canada, Mexico, Australia, Japan,
Korea, New Zealand, and all European countries. The group labeled
"European Union-15" consists of the 15 members of the European Union before the
expansion to 25 countries on May 1, 2004 (Austria, Belgium, Denmark, Finland,
France,Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal,
Spain, Sweden, and the United Kingdom). The group labeled "Europe" consists of the
15 members of the European Union-15, the Czech Republic, Hungary, Norway, and
Switzerland. The group labeled "Asian NIEs" consists of the four newly
industrialized economies of Hong Kong SAR, Korea, Singapore, and Taiwan.
The trade-weighted measures relate to all the countries or areas covered
in the series. In these measures, 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 31 foreign economies are computed both including and excluding
Brazil, the Czech Republic, and Hungary because a lack of data for these countries prior to
the mid-1990s.
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 fairly wide.
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
differencesin 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.