Full text of 2005 : Text File, USDL: 06-2020
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Internet address: http://www.bls.gov/fls USDL: 06-2020
Technical information: (202) 691-5654 For Release: 10:00 A.M. EST
Media contact: (202) 691-5902 Thursday, November 30, 2006
INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 2005
Average hourly compensation costs in U.S. dollars for production
workers in manufacturing among 32 foreign economies were 80 percent
of the U.S. level in 2005, virtually unchanged from 79 percent in
2004, according to data issued by the Bureau of Labor Statistics,
U.S. Department of Labor. Compensation costs relative to the United
States rose or remained unchanged in 21 of the economies covered in
2005. (See table 1.) Data for Poland, a relatively low labor cost
country, are included in this release for the first time. A note
on China's labor costs appears on page 5 of this release.
In the United States, hourly compensation costs for production
workers in manufacturing increased 3.6 percent in 2005, to $23.65.
When measured in national currency terms, trade-weighted average
costs increased 2.9 percent in the combined 32 foreign economies in
2005. This was less than the increase in the United States, but
the value of foreign currencies rose 3.1 percent against the U.S.
dollar, resulting in a rise in hourly compensation costs in the
foreign economies of 6.1 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, 1975-2005
PRINTED COPY CONTAINS CHART AT THIS POINT.
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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 in 2005 in most of the
foreign economies-with only one country, Japan, showing a decrease
in costs. The rate of compensation increase in a trade-weighted
average of the 32 foreign economies was 6.1 percent in 2005, 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, 2005
PRINTED COPY CONTAINS CHART AT THIS POINT.
Although average costs in the United States continued to be
higher than those in most of 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. With the value of the Euro remaining virtually unchanged
against the U.S. dollar in 2005 (+0.1 percent), European labor
costs measured in U.S. dollars showed much weaker growth than in
the previous three years. Fifteen of the nineteen European
countries for which data are available recorded annual growth rates
in hourly compensation costs of between 1.0 and 4.5 percent in
2005. This is in contrast with the 2002 to 2004 period, when most
European countries exhibited double-digit growth. The only
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European countries to have double-digit growth in hourly
compensation costs on a U.S. dollar basis in 2005 were the Czech
Republic and Poland (12.1 and 17.9 percent, respectively), both of
which also experienced strong appreciation of their national
currencies.
Compensation costs in Europe, on average, continued to be almost
$4 higher on a per hour basis than in the United States. However,
there is great variation in the level of compensation costs among
the European countries covered. For example, hourly compensation
costs in Europe ranged from $4.54 in Poland to more than eight
times that level in Norway ($39.14), the highest labor cost country
in these comparisons. (See table 2.)
Outside of Europe, annual percent changes in manufacturing
compensation costs measured in U.S. dollars varied considerably in
2005. Hourly compensation costs in Brazil and the Republic of
Korea continued to grow strongly in 2005 (29.9 and 21.8 percent,
respectively), boosted by an appreciation of the Brazilian real and
Korean won against the U.S. dollar. Japan was the only country in
these comparisons to show a decrease in hourly compensation costs
measured in U.S. dollars (-0.4 percent), despite an increase in
costs on a national currency basis, due to the depreciation of the
Japanese yen against the U.S. dollar.
BOX: A note on the measures
The hourly compensation costs measures in this news release
are based on statistics available to BLS as of September 2006. 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.
See the Technical Notes for further information regarding
definitions, sources, and computation methods, as well as a
description of the trade-weighted measures for economic groups.
The data for some countries may have been revised in later
updates to reflect new or revised data provided to BLS subsequent
to this news release. See Hourly Compensation Costs for Production
Workers in Manufacturing, 33 Countries or Areas, 22 Manufacturing
Industries at http://www.bls.gov/fls/flshcindnaics.htm for the most
recent data.
END OF BOX: A note on the measures
Exchange rates
The trade-weighted 3.1 percent increase in the value of the
currencies of the 32 foreign economies against the U.S. dollar was
the smallest increase since 2002 (0.4 percent), but well above the
average annual change since 1975 (-3.4 percent). The currencies of
most economies appreciated in 2005, while the currencies of only
six countries-Denmark, Israel, Japan, Sweden, Switzerland, and the
United Kingdom-depreciated against the dollar. (See table 5.)
The movements of the foreign currencies relative to the U.S.
dollar in 2005 had an influence on hourly manufacturing
compensation costs measured in U.S. dollars. Hourly compensation
costs on a national currency basis in the 32 foreign economies rose
2.9 percent, less than in the United States. When adjusted for the
appreciation of the foreign currencies against the U.S. dollar,
those costs increased 6.1 percent, higher than in the United States.
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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, 2004-2005
Hourly Hourly
Country compensation, compensation,
or area national Exchange U.S.
currency Rates dollars
Americas
United States 3.6 - 3.6
Brazil 8.1 20.2 29.9
Canada 1.9 7.4 9.4
Mexico 4.1 3.7 7.9
Asia and Oceania
Australia 2.9 3.6 6.5
Hong Kong SAR (1) 2.4 .1 2.6
Israel 3.6 -.1 3.5
Japan 1.4 -1.7 -.4
Korea 8.9 11.8 21.8
New Zealand 3.4 6.1 9.7
Singapore 2.2 1.6 3.8
Sri Lanka - - -
Taiwan 2.8 3.9 6.8
Europe
Austria 3.0 .1 3.1
Belgium 2.5 .1 2.6
Czech Republic 4.5 7.3 12.1
Denmark 3.0 -.1 2.9
Finland 4.0 .1 4.1
France 3.0 .1 3.1
Germany 1.4 .1 1.5
Greece - - -
Hungary 6.2 1.6 7.8
Ireland 3.6 .1 3.7
Italy 2.7 .1 2.8
Luxembourg 4.1 .1 4.2
Netherlands 3.3 .1 3.4
Norway 2.7 4.6 7.5
Poland 4.3 13.0 17.9
Portugal 4.4 .1 4.5
Spain 3.7 .1 3.8
Sweden 2.8 -1.6 1.1
Switzerland 1.2 -.2 1.0
United Kingdom 4.3 -.6 3.6
Trade-weighted measures (2)
All foreign economies 2.9 3.1 6.1
OECD (3) 2.9 3.2 6.2
Europe 2.9 -.1 2.8
Asian NIEs 5.0 6.0 11.5
1 Hong Kong Special Administrative Region of China.
2 The 2004-2005 percent changes for the trade-weighted measures are
based upon the changes for the countries or areas for which 2005
data are available.
3 OECD refers to the Organization for Economic Cooperation and
Development.
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BOX: China
Acknowledging the importance of China as one of the United
States' largest trading partners, BLS is including data for China in
this release for the first time. Due to data limitations, data are
presented separately and only for 2002-2004.
The compensation costs data presented for China are not
directly comparable with the data for other countries found in this
release. China's data refer to all employees while data for other
countries only refer to production workers. Since non-production
workers in manufacturing often are compensated at higher rates than
their production worker counterparts, the inclusion of non-
production workers in China's data may affect comparability with
other countries. In addition, it is likely that certain groups of
workers are not fully captured in the annual administrative data
published by China's National Bureau of Statistics, specifically
migrant workers and workers employed in small-scale and private
enterprises and the informal sector.
Data for 2002 are from Judith Banister's August 2005 article in
the Monthly Labor Review, found on the BLS website at
http://www.bls.gov/opub/mlr/2005/08/art3full.pdf. In general, the
methods used to update the hourly compensation costs estimates to
2003 and 2004 are the same as the methods used in the Banister
article. A more detailed explanation and analysis of the 2003 and
2004 data for China will be available in a forthcoming article in
the November 2006 issue of the Monthly Labor Review.
China: Hourly Compensation Costs for All Employees in
Manufacturing, 2002-2004
National U.S. Index
Year Currency Dollar (United
Basis Basis States
(Yuan) (US$) =100)
2002 4.73 0.57 3
2003 5.17 0.62 3
2004 5.50 0.67 3
END OF BOX: China
The effect that exchange rate changes can have on hourly
compensation costs is particularly evident when comparing the labor
costs of Canada with those of the United States. On a national
currency basis, the increase in hourly compensation costs in Canada
(1.9 percent) was less than the increase in the United States (3.6
percent). When adjusted for changes in exchange rates, however,
the increase in costs on a U.S. dollar basis was significantly
higher in Canada than in the United States (9.4 percent versus 3.6
percent).
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 2005.
Data also are available for national currency hourly compensation
and exchange rates from 1975 through 2005 in the supplementary
tables (http://www.bls.gov/fls).
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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 2004.
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.
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Table 1. Indexes of hourly compensation costs for production workers in manufacturing,
33 countries or areas and selected economic groups, selected years, 1975-2005
Country or area 1975 1980 1985 1990 1995 2000 2002 2003 2004 2005
Americas
United States............. 100 100 100 100 100 100 100 100 100 100
Brazil.................... - - - - - 18 12 12 14 17
Canada.................... 99 92 88 110 96 84 78 88 95 101
Mexico.................... 24 23 12 11 10 11 12 11 11 11
Asia and Oceania
Australia................. 91 88 64 88 89 73 72 89 102 105
Hong Kong SAR (1)......... 12 16 14 22 28 28 27 25 24 24
Israel.................... 33 35 29 52 55 58 52 52 53 53
Japan..................... 48 57 49 85 137 112 87 91 96 92
Korea, Republic of........ 5 10 10 25 42 42 41 44 49 57
New Zealand............... 53 56 36 57 60 43 43 53 60 63
Singapore................. 13 16 20 25 44 37 31 32 32 32
Sri Lanka................. 5 2 2 2 3 2 2 2 2 -
Taiwan.................... 6 11 12 26 35 32 26 26 26 27
Europe
Austria................... 73 92 60 121 147 97 97 115 125 124
Belgium................... 94 122 65 121 149 102 102 120 132 130
Czech Republic............ - - - - 15 14 18 21 24 26
Denmark................... 101 112 64 124 147 111 114 136 151 150
Finland................... 75 86 65 143 142 99 102 122 134 135
France.................... 73 92 59 104 112 79 80 95 105 104
Germany................... - - - - 175 115 114 134 142 140
Greece.................... 27 39 29 46 53 - - - - -
Hungary................... - - - - 16 14 18 21 25 26
Ireland................... 50 63 47 79 80 65 72 86 96 96
Italy..................... 75 84 60 117 91 70 69 82 90 89
Luxembourg................ 101 120 59 108 137 89 88 104 116 117
Netherlands............... 107 125 69 121 140 98 104 124 135 135
Norway.................... 112 123 82 147 145 115 131 147 160 166
Poland.................... - - - - - 14 15 16 17 19
Portugal.................. 25 21 12 24 30 23 24 28 31 31
Spain..................... 41 61 36 76 74 54 56 68 75 75
Sweden.................... 116 129 76 140 126 103 95 113 125 121
Switzerland............... 98 114 75 139 168 107 111 125 132 129
United Kingdom............ 54 78 49 85 80 86 86 96 109 109
Trade-weighted measures (2)
All foreign economies (3). 62 67 52 80 87 70 65 73 79 80
OECD (3,4)................ 67 73 56 85 92 74 70 79 85 86
Europe (3)................ 79 99 61 113 123 90 91 107 117 116
European Union-15 (5)..... 78 98 60 112 123 91 92 107 118 116
Asian NIEs (6)............ 8 12 13 25 39 36 33 34 36 39
Dash means data not available.
(1) Hong Kong Special Administrative Region of China.
(2) For a description of trade-weighted measures and economic groups, see the Technical
Notes preceding these tables.
(3) Data for the Czech Republic for 1975-1994, for Hungary for 1975-1993, and for Poland
1975-1996 are not included.
(4) Organization for Economic Cooperation and Development.
(5) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(6) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.
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Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
33 countries or areas and selected economic groups, selected years, 1975-2005
Country or area 1975 1980 1985 1990 1995 2000 2002 2003 2004 2005
Americas
United States............. 6.16 9.63 12.71 14.81 17.17 19.65 21.33 22.20 22.82 23.65
Brazil.................... - - - - - 3.50 2.57 2.74 3.15 4.09
Canada.................... 6.11 8.87 11.20 16.33 16.50 16.48 16.72 19.53 21.77 23.82
Mexico.................... 1.46 2.20 1.59 1.57 1.70 2.07 2.49 2.44 2.44 2.63
Asia and Oceania
Australia................. 5.60 8.44 8.18 13.09 15.36 14.40 15.38 19.79 23.38 24.91
Hong Kong SAR (1)......... 0.75 1.50 1.73 3.22 4.80 5.45 5.66 5.54 5.51 5.65
Israel.................... 2.02 3.41 3.65 7.69 9.41 11.41 11.00 11.62 12.01 12.42
Japan..................... 2.97 5.46 6.27 12.59 23.47 21.93 18.60 20.26 21.84 21.76
Korea, Republic of........ 0.32 0.95 1.23 3.70 7.28 8.23 8.77 9.69 11.13 13.56
New Zealand............... 3.28 5.44 4.55 8.48 10.35 8.38 9.10 11.69 13.65 14.97
Singapore................. 0.83 1.53 2.52 3.74 7.57 7.18 6.71 7.18 7.38 7.66
Sri Lanka................. 0.28 0.22 0.28 0.35 0.48 0.48 0.49 0.51 0.52 -
Taiwan.................... 0.38 1.03 1.51 3.91 5.99 6.19 5.64 5.69 5.98 6.38
Europe
Austria................... 4.50 8.87 7.57 17.91 25.26 19.14 20.71 25.51 28.53 29.42
Belgium................... 5.77 11.74 8.21 17.85 25.67 20.13 21.77 26.55 30.01 30.79
Czech Republic............ - - - - 2.63 2.83 3.83 4.72 5.45 6.11
Denmark................... 6.24 10.77 8.10 18.35 25.28 21.87 24.31 30.22 34.46 35.47
Finland................... 4.63 8.30 8.20 21.15 24.31 19.44 21.78 27.10 30.67 31.93
France.................... 4.50 8.90 7.48 15.36 19.26 15.46 17.13 21.14 23.89 24.63
Germany................... - - - - 30.10 22.67 24.22 29.64 32.50 33.00
Greece.................... 1.69 3.73 3.67 6.82 9.07 - - - - -
Hungary................... - - - - 2.69 2.79 3.92 4.76 5.63 6.07
Ireland................... 3.06 6.02 6.00 11.77 13.75 12.72 15.26 19.09 21.94 22.76
Italy..................... 4.64 8.09 7.56 17.28 15.69 13.84 14.75 18.11 20.48 21.05
Luxembourg................ 6.22 11.51 7.48 16.00 23.56 17.51 18.71 23.12 26.57 27.68
Netherlands............... 6.58 12.05 8.73 17.98 24.03 19.33 22.12 27.47 30.76 31.81
Norway.................... 6.90 11.80 10.47 21.76 24.84 22.56 27.93 32.73 36.41 39.14
Poland.................... - - - - - 2.81 3.29 3.52 3.85 4.54
Portugal.................. 1.52 1.98 1.46 3.59 5.09 4.49 5.07 6.24 7.02 7.33
Spain..................... 2.52 5.86 4.64 11.30 12.70 10.65 11.95 15.01 17.14 17.78
Sweden.................... 7.14 12.44 9.61 20.81 21.68 20.18 20.23 25.19 28.42 28.73
Switzerland............... 6.03 10.96 9.55 20.63 28.90 20.95 23.77 27.78 30.21 30.50
United Kingdom............ 3.35 7.52 6.22 12.61 13.79 16.84 18.36 21.33 24.76 25.66
Trade-weighted measures (2)
All foreign economies (3). 3.82 6.49 6.61 11.83 14.99 13.66 13.90 16.19 17.95 18.89
OECD (3,4)................ 4.13 7.00 7.08 12.62 15.85 14.59 14.92 17.47 19.43 20.43
Europe (3)................ 4.87 9.49 7.72 16.80 21.19 17.77 19.48 23.70 26.62 27.33
European Union-15 (5)..... 4.80 9.40 7.61 16.58 21.07 17.89 19.53 23.83 26.81 27.52
Asian NIEs (6)............ 0.49 1.15 1.62 3.71 6.62 7.06 7.04 7.49 8.16 9.28
Dash means data not available.
(1) Hong Kong Special Administrative Region of China.
(2) For a description of trade-weighted measures and economic groups, see the Technical
Notes preceding these tables.
(3) Data for the Czech Republic for 1975-1994, for Hungary for 1975-1993, and for Poland
1975-1996 are not included.
(4) Organization for Economic Cooperation and Development.
(5) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(6) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.
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Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production
workers in manufacturing, 33 countries or areas and selected economic groups, selected
years, 1975-2005
Country or area 1975- 1975- 1980- 1985- 1990- 1995- 2000- 2003 2004 2005
2005(1) 1980 1985 1990 1995 2000 2005
Americas
United States............. 4.6 9.3 5.7 3.1 3.0 2.7 3.8 4.1 2.8 3.6
Brazil.................... - - - - - - 3.2 6.7 14.9 29.9
Canada.................... 4.6 7.7 4.8 7.8 .2 .0 7.6 16.8 11.4 9.4
Mexico.................... 2.0 8.5 -6.3 -.2 1.5 4.0 4.9 -2.0 .0 7.9
Asia and Oceania
Australia................. 5.1 8.6 -.6 9.9 3.3 -1.3 11.6 28.7 18.1 6.5
Hong Kong SAR (2)......... 6.9 14.8 2.8 13.2 8.3 2.6 .7 -2.2 -.6 2.6
Israel.................... 6.2 11.0 1.4 16.1 4.1 3.9 1.7 5.6 3.4 3.5
Japan..................... 6.9 13.0 2.8 14.9 13.3 -1.3 -.2 8.9 7.8 -.4
Korea, Republic of........ 13.3 24.3 5.2 24.6 14.5 2.5 10.5 10.5 14.9 21.8
New Zealand............... 5.2 10.7 -3.5 13.3 4.1 -4.1 12.3 28.5 16.8 9.7
Singapore................. 7.7 12.9 10.6 8.2 15.1 -1.0 1.3 7.0 2.8 3.8
Sri Lanka................. 2.1 -5.0 5.2 4.7 6.4 .0 - 3.1 1.9 -
Taiwan.................... 9.8 21.8 8.0 21.0 8.9 .7 .6 1.0 4.9 6.8
Europe
Austria................... 6.5 14.5 -3.1 18.8 7.1 -5.4 9.0 23.2 11.8 3.1
Belgium................... 5.7 15.3 -6.9 16.8 7.5 -4.7 8.9 21.9 13.1 2.6
Czech Republic............ - - - - - 1.5 16.6 23.3 15.4 12.1
Denmark................... 6.0 11.5 -5.5 17.8 6.6 -2.8 10.1 24.3 14.0 2.9
Finland................... 6.6 12.4 -.2 20.9 2.8 -4.4 10.4 24.4 13.2 4.1
France.................... 5.8 14.6 -3.4 15.5 4.6 -4.3 9.8 23.5 13.0 3.1
Germany................... - - - - - -5.5 7.8 22.4 9.7 1.5
Greece.................... 7.4 17.2 -.3 13.2 5.9 - - - - -
Hungary................... - - - - - .8 16.8 21.3 18.3 7.8
Ireland................... 6.9 14.5 -.1 14.4 3.2 -1.5 12.3 25.1 14.9 3.7
Italy..................... 5.2 11.8 -1.3 18.0 -1.9 -2.5 8.7 22.8 13.1 2.8
Luxembourg................ 5.1 13.1 -8.3 16.4 8.0 -5.8 9.6 23.6 14.9 4.2
Netherlands............... 5.4 12.9 -6.2 15.6 6.0 -4.3 10.5 24.2 12.0 3.4
Norway.................... 6.0 11.3 -2.4 15.8 2.7 -1.9 11.7 17.2 11.2 7.5
Poland.................... - - - - - - 10.1 6.9 9.3 17.9
Portugal.................. 5.4 5.4 -5.8 19.7 7.3 -2.5 10.3 23.1 12.6 4.5
Spain..................... 6.7 18.4 -4.6 19.5 2.4 -3.5 10.8 25.6 14.2 3.8
Sweden.................... 4.8 11.7 -5.0 16.7 .8 -1.4 7.3 24.5 12.8 1.1
Switzerland............... 5.6 12.7 -2.7 16.7 7.0 -6.2 7.8 16.9 8.7 1.0
United Kingdom............ 7.0 17.5 -3.7 15.2 1.8 4.1 8.8 16.2 16.1 3.6
Trade-weighted measures (3)
All foreign economies (4). 5.7 12.1 .2 11.6 4.9 -.1 6.3 12.9 9.0 6.1
OECD (4,5)................ 5.4 11.7 -.4 11.3 4.4 -.3 6.8 13.9 9.6 6.2
Europe (4)................ 6.1 14.5 -3.8 16.7 4.5 -2.7 9.1 21.7 12.6 2.8
European Union-15 (6)..... 6.1 14.6 -3.9 16.7 4.4 -2.6 9.1 22.0 12.8 2.8
Asian NIEs (7)............ 10.4 20.2 6.7 19.0 12.1 1.3 4.6 5.3 7.6 11.5
Rates of change based on compound rate method.
Dash means data not available.
(1) 1975-2004 for Sri Lanka. 1975-1998 for Greece.
(2) Hong Kong Special Administrative Region of China.
(3) Trade-weighted percent changes computed as the trade-weighted average of the rates
of change for the individual countries or areas. For description of trade-weighted
measures and economic groups, see the Technical Notes preceding these tables.
(4) Data for the Czech Republic, Hungary, and Poland are not included for 1975-2004,
1975-1980, 1980-1985, 1985-1990, and 1990-1995. Data for Poland also are not included
for 1995-2000.
(5) Organization for Economic Cooperation and Development.
(6) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(7) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.
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Table 4. Annual percent change in hourly compensation costs in national currency for
production workers in manufacturing, 33 countries or areas and selected economic groups,
selected years, 1975-2005
Country or area 1975- 1975- 1980- 1985- 1990- 1995- 2000- 2003 2004 2005
2005(1) 1980 1985 1990 1995 2000 2005
Americas
United States............. 4.6 9.3 5.7 3.1 3.0 2.7 3.8 4.1 2.8 3.6
Brazil.................... - - - - - - 9.2 12.3 9.3 8.1
Canada.................... 5.3 10.8 8.1 4.5 3.5 1.6 3.3 4.2 3.6 1.9
Mexico.................... 27.8 22.5 51.8 61.1 19.7 12.4 7.9 9.4 4.6 4.1
Asia and Oceania
Australia................. 7.0 11.6 9.6 7.5 4.3 3.6 5.7 7.2 4.6 2.9
Hong Kong SAR (2)......... 8.6 14.9 12.5 13.2 8.2 2.7 .7 -2.3 -.6 2.4
Israel.................... 42.7 68.3 200.9 29.2 12.8 10.4 3.7 1.5 1.7 3.6
Japan..................... 3.4 7.0 3.9 4.1 3.8 1.4 .3 .8 .6 1.4
Korea, Republic of........ 16.1 30.0 13.1 19.6 16.5 10.6 8.3 5.4 10.3 8.9
New Zealand............... 7.1 15.6 10.3 9.2 2.1 3.0 3.0 2.5 2.3 3.4
Singapore................. 6.4 10.6 11.2 4.1 9.6 2.9 .6 4.1 -.3 2.2
Sri Lanka................. 12.0 12.7 16.2 13.1 11.7 8.5 - 4.0 6.8 -
Taiwan.................... 9.2 20.5 10.2 11.8 8.5 4.1 1.2 .6 1.8 2.8
Europe
Austria................... 4.9 7.9 6.4 5.3 4.6 2.3 2.7 2.9 1.8 3.0
Belgium................... 5.3 10.1 7.3 4.1 4.9 3.1 2.6 1.8 2.9 2.5
Czech Republic............ - - - - - 9.4 6.0 6.2 5.2 4.5
Denmark................... 6.1 11.1 7.2 5.8 4.5 4.6 3.7 3.7 3.8 3.0
Finland................... 7.6 12.7 10.5 9.8 5.6 3.3 4.0 3.9 3.0 4.0
France.................... 6.6 14.3 12.3 4.5 2.8 2.7 3.4 3.1 2.9 3.0
Germany................... - - - - - 2.2 1.5 2.2 -.2 1.4
Greece.................... 18.3 23.9 26.1 16.4 14.2 - - - - -
Hungary................... - - - - - 18.5 9.0 5.5 7.0 6.2
Ireland................... 8.1 16.2 14.0 4.8 3.8 4.8 5.8 4.5 4.6 3.6
Italy..................... 8.3 18.0 15.8 7.5 4.3 2.6 2.4 2.6 2.9 2.7
Luxembourg................ 4.7 8.0 5.7 3.8 5.4 2.0 3.2 3.2 4.6 4.1
Netherlands............... 4.2 7.6 3.9 2.5 3.3 3.7 4.1 3.7 1.9 3.3
Norway.................... 6.7 10.1 9.1 8.6 3.0 4.8 4.9 3.9 5.9 2.7
Poland.................... - - - - - - 3.7 1.9 2.8 4.3
Portugal.................. 12.1 20.7 20.5 15.3 8.3 5.0 3.9 2.8 2.5 4.4
Spain..................... 9.8 23.8 13.4 7.9 6.6 3.9 4.4 4.8 3.9 3.7
Sweden.................... 6.8 12.2 9.5 8.3 4.7 3.6 3.0 3.5 2.6 2.8
Switzerland............... 3.0 3.4 5.0 4.1 3.5 .7 1.4 1.0 .5 1.2
United Kingdom............ 7.7 16.5 8.2 8.1 4.3 4.9 4.9 6.7 3.5 4.3
Trade-weighted measures (3)
All foreign economies (4). 10.2 15.0 18.4 15.6 7.6 3.7 3.8 4.3 3.1 2.9
OECD (4,5)................ 9.8 14.0 15.9 15.8 7.5 3.6 4.0 4.6 3.3 2.9
Europe (4)................ 5.7 12.4 8.8 5.8 4.4 .3 3.3 3.6 2.3 2.9
European Union-15 (6)..... 5.8 12.8 9.0 5.8 4.5 .2 3.4 3.7 2.4 3.0
Asian NIEs (7)............ 11.3 21.6 11.8 13.6 11.8 6.2 3.7 2.7 4.4 5.0
Rates of change based on compound rate method.
Dash means data not available.
(1) 1975-2004 for Sri Lanka. 1975-1998 for Greece.
(2) Hong Kong Special Administrative Region of China.
(3) Trade-weighted percent changes computed as the trade-weighted average of the rates
of change for the individual countries or areas. For description of trade-weighted
measures and economic groups, see the Technical Notes preceding these tables.
(4) Data for the Czech Republic, Hungary, and Poland are not included for 1975-2004,
1975-1980, 1980-1985, 1985-1990, and 1990-1995. Data for Poland also are not included
for 1995-2000.
(5) Organization for Economic Cooperation and Development.
(6) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(7) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.
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Table 5. Annual percent change in exchange rates (U.S. dollars per national currency
unit), 33 countries or areas and selected economic groups, selected years, 1975-2005
Country or area 1975- 1975- 1980- 1985- 1990- 1995- 2000- 2003 2004 2005
2005(1) 1980 1985 1990 1995 2000 2005
Americas
United States............. - - - - - - - - - -
Brazil.................... - - - - - - -5.6 -5.0 5.1 20.2
Canada.................... -.6 -2.7 -3.1 3.2 -3.2 -1.6 4.2 12.1 7.6 7.4
Mexico.................... -20.2 -11.5 -38.3 -38.0 -15.2 -7.5 -2.8 -10.5 -4.4 3.7
Asia and Oceania
Australia................. -1.8 -2.7 -9.3 2.2 -1.0 -4.7 5.6 20.0 12.9 3.6
Hong Kong SAR (2)......... -1.5 -.1 -8.6 .0 .1 -.1 .0 .2 .0 .1
Israel.................... -25.6 -34.1 -66.3 -10.2 -7.7 -5.9 -1.9 4.0 1.6 -.1
Japan..................... 3.4 5.6 -1.1 10.5 9.1 -2.7 -.4 8.0 7.1 -1.7
Korea, Republic of........ -2.5 -4.4 -6.9 4.2 -1.7 -7.4 2.0 4.9 4.1 11.8
New Zealand............... -1.8 -4.3 -12.6 3.7 1.9 -7.0 9.1 25.3 14.2 6.1
Singapore................. 1.2 2.1 -.5 3.9 5.1 -3.9 .7 2.8 3.1 1.6
Sri Lanka................. -8.8 -15.7 -9.5 -7.5 -4.8 -7.8 - -.9 -4.6 -
Taiwan.................... .6 1.1 -2.0 8.2 .3 -3.2 -.5 .4 3.1 3.9
Europe
Austria................... 1.5 6.1 -9.0 12.8 2.4 -7.5 6.2 19.8 9.9 .1
Belgium................... .4 4.7 -13.2 12.2 2.5 -7.6 6.2 19.8 9.9 .1
Czech Republic............ - - - - - -7.2 10.0 16.1 9.8 7.3
Denmark................... -.1 .4 -11.9 11.4 2.0 -7.1 6.2 19.9 9.8 -.1
Finland................... -.9 -.3 -9.7 10.1 -2.6 -7.4 6.2 19.8 9.9 .1
France.................... -.7 .3 -14.0 10.5 1.8 -6.8 6.2 19.8 9.9 .1
Germany................... - - - - - -7.5 6.2 19.8 9.9 .1
Greece.................... -9.2 -5.4 -21.0 -2.7 -7.3 - - - - -
Hungary................... - - - - - -14.9 7.2 15.0 10.6 1.6
Ireland................... -1.1 -1.5 -12.3 9.2 -.7 -6.1 6.2 19.8 9.9 .1
Italy..................... -2.9 -5.3 -14.8 9.8 -6.0 -4.9 6.2 19.8 9.9 .1
Luxembourg................ .4 4.7 -13.2 12.2 2.5 -7.6 6.2 19.8 9.9 .1
Netherlands............... 1.2 4.9 -9.8 12.7 2.6 -7.6 6.2 19.8 9.9 .1
Norway.................... -.7 1.1 -10.5 6.6 -.3 -6.4 6.5 12.8 5.0 4.6
Poland.................... - - - - - - 6.1 4.9 6.3 13.0
Portugal.................. -6.0 -12.7 -21.9 3.8 -1.0 -7.1 6.2 19.8 9.9 .1
Spain..................... -2.8 -4.3 -15.9 10.8 -3.9 -7.1 6.2 19.8 9.9 .1
Sweden.................... -1.9 -.4 -13.2 7.8 -3.7 -4.9 4.2 20.3 10.0 -1.6
Switzerland............... 2.5 9.0 -7.4 12.0 3.3 -6.9 6.3 15.8 8.2 -.2
United Kingdom............ -.7 .9 -11.0 6.6 -2.4 -.8 3.7 8.9 12.1 -.6
Trade-weighted measures (3)
All foreign economies (4). -3.4 -2.0 -12.4 -.4 -2.2 -3.5 2.4 8.4 5.8 3.1
OECD (4,5)................ -3.4 -1.7 -12.2 -.7 -2.5 -3.5 2.7 9.1 6.1 3.2
Europe (4)................ .4 2.0 -11.6 10.4 .1 -2.7 5.6 17.6 10.0 -.1
European Union-15 (6)..... .3 1.7 -11.8 10.3 -.1 -2.5 5.6 17.7 10.1 -.1
Asian NIEs (7)............ -.8 -1.0 -4.5 4.8 .4 -4.5 .7 2.5 3.1 6.0
Rates of change based on compound rate method.
Dash means data not available.
(1) 1975-2004 for Sri Lanka. 1975-1998 for Greece.
(2) Hong Kong Special Administrative Region of China.
(3) Trade-weighted percent changes computed as the trade-weighted average of the rates
of change for the individual countries or areas. For description of trade-weighted
measures and economic groups, see the Technical Notes preceding these tables.
(4) Data for the Czech Republic, Hungary, and Poland are not included for 1975-2004,
1975-1980, 1980-1985, 1985-1990, and 1990-1995. Data for Poland also are not included
for 1995-2000.
(5) Organization for Economic Cooperation and Development.
(6) European Union-15 refers to European Union member countries prior to the expansion
of the European Union to 25 countries on May 1, 2004.
(7) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.
Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.
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Table 6. Hourly compensation costs in national currency units and exchange rates, 33
countries or areas, 2005
Country or area Compensation costs Exchange Rates
Americas
United States............. 23.65 ..
Brazil.................... 9.97 2.435
Canada.................... 28.87 1.212
Mexico.................... 28.67 10.89
Asia and Oceania
Australia................. 32.65 1.311
Hong Kong SAR (1)......... 43.94 7.778
Israel.................... 55.76 4.488
Japan..................... 2395 110.1
Korea, Republic of........ 13881 1024
New Zealand............... 21.24 1.419
Singapore................. 12.74 1.664
Sri Lanka................. - -
Taiwan.................... 205.0 32.13
Europe
Austria................... 23.63 .8033
Belgium................... 24.74 .8033
Czech Republic............ 146.4 23.96
Denmark................... 212.6 5.995
Finland................... 25.65 .8033
France.................... 19.78 .8033
Germany................... 26.51 .8033
Greece.................... - -
Hungary................... 1212 199.6
Ireland................... 18.28 .8033
Italy..................... 16.91 .8033
Luxembourg................ 22.23 .8033
Netherlands............... 25.55 .8033
Norway.................... 252.1 6.441
Poland.................... 14.68 3.236
Portugal.................. 5.89 .8033
Spain..................... 14.29 .8033
Sweden.................... 214.6 7.471
Switzerland............... 38.00 1.246
United Kingdom............ 14.09 .5490
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; Republic of 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;
Poland, zloty; Portugal, euro; Spain, euro; Sweden, krona; Switzerland, franc;
United Kingdom, pound.
Note: For data for all years 1975-2005, 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 2006.
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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 2006. 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 Poland. Because of data limitations,
the measures cover only the years 1997-2005.
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 and (b) other direct pay. Pay for time worked includes
basic time and piece rates plus overtime premiums, shift
differentials, other premiums and bonuses paid regularly each pay
period, and cost-of-living adjustments. Other direct pay includes
pay for time not worked (vacation, 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 and (d) other labor taxes.
Social insurance expenditures include employer expenditures for
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. Other labor taxes includes 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.
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
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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. Data are for industrial workers and include workers
in mining and electrical power plants which account for around 3
percent of industrial employment. For comparability with other
countries, compensation excludes some obligatory training and plant
facilities costs; in 1994, these costs would add 1.6 percent to
average hourly compensation costs.
-9-
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.
Mexico. Compensation costs data for Mexico exclude petroleum
and coal products manufacturing.
Norway. For comparability with other countries, compensation
excludes some obligatory training and plant facilities costs; in
1994, these costs would add 2.2 percent to average hourly
compensation costs.
Trade-weighted measures
The trade weights used to compute the average compensation cost
measures for selected economic groups are weights based on the
relative dollar value of U.S. trade in manufactured commodities
(exports plus imports) with each country or area in 2004. (See the
following table.) The trade data are compiled by the U.S. Census
Bureau.
The only countries not covered in the trade-weighted measures
of this report that accounted for as much as one percent of such
trade are China, Malaysia, Thailand, and India. Hourly compensation
costs data for China are included in this report in a special text
box. In addition, 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 new release.
The countries included in the Organization for Economic
Cooperation and Development (OECD) trade-weighted measure are Canada,
Mexico, Australia, Japan, the Republic of 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, Poland, and
Switzerland. The group labeled "Asian NIEs" consists of the four
newly industrialized economies of Hong Kong SAR, the Republic of
Korea, Singapore, and Taiwan.
The trade-weighted measures relate to all the countries or
areas covered in the series. Estimates are computed for missing
country data using the average trend in other economies to estimate
the missing data. Trade weighted average percent changes for the 32
foreign economies are computed both including and excluding Brazil,
the Czech Republic, Hungary, and Poland 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.
-10-
Share of total U.S. imports and exports of manufactured products in
2004
(in percent)
Country or area 2004 Country or area 2004
and economic trade and economic trade
group share group share
Brazil 1.7 Greece 0.1
Canada 20.0 Hungary 0.2
Mexico 12.5 Ireland 1.9
Italy 2.0
Australia 1.1 Luxembourg 0.1
Hong Kong SAR(1) 1.3 Netherlands 1.8
Israel 1.2 Norway 0.2
Japan 9.4 Poland 0.1
Korea, Republic of 3.7 Portugal 0.2
New Zealand 0.2 Spain 0.7
Singapore 1.8 Sweden 0.8
Sri Lanka 0.1 Switzerland 1.0
Taiwan 2.9 United Kingdom 3.8
Austria 0.4
Belgium 1.5 Economic Groups
Czech Republic 0.1 32 foreign economies 74.7
Denmark 0.3 OECD(2) 66.2
Finland 0.3 Europe 22.4
France 2.7 European Union-15(3) 20.8
Germany 5.6 Asian NIEs 9.1
1 Hong Kong Special Administrative Region of China.
2 Organization for Economic Cooperation and Development.
3 Includes the 15 European Union members prior to expansion on May 1,
2004.
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 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
-11-
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.