United States Bureau of Labor Statistics
Hourly compensation costs for production workers in manufacturing in the United States in 1996 were 10 percent higher than the average cost level for 28 foreign economies studied by the Bureau of Labor Statistics, U.S. Department of Labor. Costs in Europe and Japan remained above that in the United States (25 and 19 percent higher, respectively). Costs in Japan fell below the average cost level in Europe for the first time since 1992. A gain in hourly compensation costs in Canada brought their cost level to 94 percent of the U.S. costs. (See tables 1, 2, and 3.) Costs for manufacturing production workers in the Asian newly industrializing economies (NIEs) studied rose at a slower rate in 1996 than in the past two years, reaching about 40 percent of the U.S. level. Labor costs in manufacturing in Mexico declined slightly in U.S. dollar terms in 1996, following a larger decrease in 1995. Costs in Mexico are now less than 10 percent of the U.S. level. Overall, the trade-weighted average cost level of all 28 foreign economies studied declined to 91 percent of the U.S. cost level, after reaching a record high of 95 percent in 1995.
The Bureau of Labor Statistics (BLS) has developed comparative measures of hourly compensation costs to provide a basis for assessing international differences in employer labor costs. The compensation measures are computed in national currency units and are converted into U.S. dollars at prevailing commercial market currency exchange rates.
Total compensation costs include pay for time worked, other direct pay (including holiday and vacation pay, bonuses, other direct payments, and the cost of pay in kind), employer expenditures for legally required insurance programs and contractual and private benefit plans, and, for some countries, other labor taxes.
The hourly compensation measures in this news release are based on statistics available to BLS as of May 1997. The 1996 compensation statistics are preliminary measures; for most of the foreign countries, they are based on less than full-year data. For further information regarding definitions, sources, and computation methods and a description of the trade-weighted measures and economic groups, see the Technical Notes.
Comparative compensation costs
In Japan, hourly compensation costs of manufacturing production workers declined from 138 percent of the U.S. cost level in 1995 to 119 percent in 1996, while the trade-weighted average cost level in the European countries declined only 3 percentage points to 125 percent of the U.S. cost level. Among individual European countries, relative costs remained highest in the former West Germany and Switzerland.
Hourly compensation costs in Canada rose to 94 percent of the U.S. cost level in 1996, while the cost level in Mexico remained below 10 percent of the U.S. costs. The trade-weighted average cost level in the Asian NIEs studied-Hong Kong, Korea, Singapore, and Taiwan-continued to rise, reaching 39 percent of U.S. costs. Relative costs also rose in Australia and New Zealand.
The trade-weighted average cost level for manufacturing production workers in all 28 foreign economies studied declined 4 percentage points to 91 percent of U.S. costs.
Comparative cost trends in national currencies
Changes over time in relative compensation cost levels in U.S. dollars are affected by the differences in underlying national wage and benefit trends measured in national currencies, as well as frequent and sometimes sharp changes in relative values of currency exchange rates.
In the United States, hourly compensation costs for manufacturing production workers increased 3.2 percent in 1996. In national-currency terms, hourly compensation costs rose at the same rate in Canada; in Japan, the increase was slightly less than in the U.S. (See table A.)
The trade-weighted average of the wage and benefit increases in Europe was 3.8 percent in 1996; increases in individual countries ranged from less than 1 1/2 percent in the Netherlands and Switzerland to about 6 1/2 percent in Spain and Sweden.
Among the Asian NIEs, the trade-weighted average cost increase was 9.6 percent in 1996; increases in individual countries ranged widely from about 4 1/2 percent in Taiwan to 16 percent in Korea.
The highest cost increase in national currency-terms was the 17.9 percent increase in Mexico. The trade-weighted average increase for all 28 foreign economies was 5.8 percent.
Cost trends in U.S. dollars
While compensation costs in national currency in Canada and Japan rose at about the same 3 percent rate as in the United States, after adjustment for exchange rate changes, compensation costs rose slightly more (3.9 percent) in Canada and declined (-11.1 percent) in Japan. The decline in Japan was the result of a sharp decline in the value of the yen versus the U.S. dollar. (See tables A, 3, 5 and 7.)
In Europe, the trade-weighted average currency exchange rate declined 2.1 percent in 1996, and hourly compensation costs measured in U.S. dollars rose 1.7 percent. Currency exchange rates rose relative to the U.S. dollar only in Italy and Sweden, and their compensation costs in U.S. dollars showed the largest European cost increases. In contrast, after adjustment for currency exchange rates, hourly compensation costs declined 3 percent or more in Belgium, the Netherlands, and Switzerland.
In Mexico, hourly compensation costs in U.S. dollars were essentially unchanged from 1995 to 1996 because the decline in the U.S. dollar value of the peso offset the national compensation cost increase.
Among the Asian NIEs, currency exchange rates declined in Korea and Taiwan and remained essentially unchanged from 1995 levels in Hong Kong and Singapore. For Taiwan, the exchange rate decline offset most of the moderate cost increase in national currency, and hourly compensation costs in U.S. dollars rose less than 1 percent. In the other NIE economies, hourly compensation costs in U.S. dollars rose from 6 1/2 percent in Hong Kong to 13 1/2 percent in Singapore, and the trade-weighted average cost increase was 7.1 percent.
In the other Pacific Rim economies of Australia and New Zealand, while hourly compensation measured in national currency rose at less than half the average rate for the Asian NIEs, their currency exchange rates rose in 1996 and their hourly compensation costs measured in U.S. dollars increased about 10 percent-higher than the NIE average.
For all 28 foreign economies, the average exchange rate decline of 4.9 percent offset most of the average compensation cost increase of 5.8 percent measured in national currency terms.
Country National Exchange U.S. or area currency rates dollar United States 3.2 - 3.2 Canada 3.2 .7 3.9 Mexico 17.9 -15.6 -.7 Australia 4.0 5.7 10.0 Hong Kong 6.5 .0 6.6 Israel 13.8 -8.4 4.2 Japan 3.0 -13.6 -11.1 Korea 16.0 -4.1 11.2 New Zealand 4.1 4.8 9.1 Singapore 12.9 .5 13.5 Sri Lanka - - - Taiwan 4.3 -3.5 .7 Austria 3.3 -4.8 -1.7 Belgium 1.9 -4.8 -3.0 Denmark 4.1 -3.5 .5 Finland 3.4 -4.8 -1.5 France 2.6 -2.5 .0 Germany 1 5.2 -4.9 .1 Greece - - - Ireland 2.3 -.2 2.1 Italy 3.7 5.6 9.4 Luxembourg - - - Netherlands 1.4 -4.9 -3.5 Norway 4.4 -1.9 2.3 Portugal - - - Spain 6.4 -1.7 4.6 Sweden 6.6 6.5 13.5 Switzerland 1.2 -4.4 -3.3 United Kingdom 4.5 -1.1 3.4 Trade-weighted measures 2 All 28 foreign economies 5.8 -4.9 .5 OECD 3 5.6 -5.3 -.2 less Mexico, Korea 4 3.4 -4.0 -.8 Europe 3.8 -2.1 1.7 European Union 3.9 -2.0 1.9 Asian NIEs 9.6 -2.3 7.1
Dash means data not available.
1 Germany refers to the former West Germany.
2 The 1995-96 percent changes for the trade weighted measures are based upon the changes
for the 24 countries or areas for which 1996 data are available.
3 OECD refers to the Organization for Economic Cooperation and Development.
4 Mexico joined the OECD in 1994 and Korea joined in 1996.
Additional data available
In addition to the compensation cost measures covered in this news release, additional
data are available showing comparative levels of hourly compensation costs, hourly direct
pay, and pay for time worked and the structure of compensation in manufacturing for all
years from 1975 through 1996.
BLS also computes comparative measures for 39 component manufacturing industries. Data are available through 1994. These data for the component industries are not included in this release because, in general, the data limitations are greater than they are for the total manufacturing measures. Nevertheless, these data are made available upon request and via the Internet (http://stats.bls.gov), and there are no restrictions on their use.
For further information, contact the Office of Productivity and Technology, Bureau of
Labor Statistics, 2 Massachusetts Avenue, NE,
Room 2150, Washington, DC 20212-0001 or call 202-606-5654.
Information in this report is available to sensory impaired individuals upon request.
Voice phone: 202-606-STAT; TDD phone:
202-606-5897; TDD message referral phone: 1-800-326-2577.
This material is in the public domain and, with appropriate credit, may be reproduced
without permission.
Country or area 1975 1980 1985 1990 1992 1993 1994 1995 1996 United States 100 100 100 100 100 100 100 100 100 Canada 94 88 84 106 106 100 94 93 94 Mexico 23 22 12 11 13 15 15 9 8 Australia 88 86 63 88 81 76 83 88 93 Hong Kong 12 15 13 21 24 26 27 28 29 Israel 35 38 31 57 56 53 54 61 62 Japan 47 56 49 86 101 115 125 138 119 Korea 5 10 9 25 32 34 38 43 46 New Zealand 50 54 34 56 49 49 53 59 62 Singapore 13 15 19 25 31 32 37 43 47 Sri Lanka 4 2 2 2 2 3 3 3 - Taiwan 6 10 12 26 32 31 33 34 33 Austria 71 90 58 119 126 122 128 148 141 Belgium 101 133 69 129 138 131 138 156 147 Denmark 99 110 62 120 124 116 121 141 137 Finland 72 83 63 141 124 101 113 144 138 France 71 91 58 102 105 98 101 113 109 Germany 1 100 125 74 147 158 154 159 185 180 Greece 27 38 28 45 46 43 45 52 - Ireland 48 60 46 79 83 73 75 80 80 Italy 73 83 59 119 122 97 95 96 102 Luxembourg 100 121 59 110 117 112 119 134 - Netherlands 103 122 67 123 126 121 124 141 132 Norway 106 117 80 144 143 122 124 142 141 Portugal 25 21 12 25 32 27 27 31 - Spain 40 60 36 76 83 70 68 74 75 Sweden 113 127 74 140 153 107 112 126 138 Switzerland 96 112 74 140 144 137 148 170 160 United Kingdom 53 77 48 85 90 76 76 80 80 Trade-weighted measures 2 All 28 foreign economies 60 67 52 83 88 86 89 95 91 OECD 3 67 74 57 90 96 94 96 103 98 less Mexico, Korea 4 76 84 65 104 110 107 110 118 112 Europe 80 101 61 116 122 111 114 128 125 European Union 79 100 60 115 121 110 113 126 124 Asian NIEs 8 12 13 25 30 31 34 37 39 Dash means data not available. 1 Former West Germany. 2 For description of trade-weighted measures and economic groups, see the Technical Notes. 3 Organization for Economic Cooperation and Development. 4 Mexico joined the OECD in 1994 and Korea joined in 1996. Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Country or area 1975 1980 1985 1990 1992 1993 1994 1995 1996 United States $6.36 $9.87 $13.01 $14.91 $16.09 $16.51 $16.87 $17.19 $17.74 Canada 5.96 8.67 10.94 15.84 17.03 16.44 15.85 16.04 16.66 Mexico 1.47 2.21 1.59 1.58 2.17 2.40 2.47 1.51 1.50 Australia 5.62 8.47 8.20 13.07 13.02 12.49 14.02 15.05 16.55 Hong Kong .76 1.51 1.73 3.20 3.92 4.29 4.61 4.82 5.14 Israel 2.25 3.79 4.06 8.55 9.09 8.82 9.19 10.54 10.98 Japan 3.00 5.52 6.34 12.80 16.28 19.01 21.07 23.66 21.04 Korea .32 .96 1.23 3.71 5.22 5.64 6.40 7.40 8.23 New Zealand 3.21 5.33 4.47 8.33 7.91 8.01 8.93 10.11 11.03 Singapore .84 1.49 2.47 3.78 4.95 5.25 6.29 7.33 8.32 Sri Lanka .28 .22 .28 .35 .40 .42 .45 .48 - Taiwan .40 1.00 1.50 3.93 5.09 5.19 5.49 5.82 5.86 Austria 4.51 8.88 7.58 17.75 20.29 20.16 21.51 25.38 24.95 Belgium 6.41 13.11 8.97 19.22 22.23 21.62 23.25 26.88 26.07 Denmark 6.28 10.83 8.13 17.96 20.02 19.11 20.40 24.26 24.38 Finland 4.61 8.24 8.16 21.03 19.92 16.63 19.06 24.83 24.45 France 4.52 8.94 7.52 15.23 16.89 16.23 17.04 19.34 19.34 Germany 1 6.35 12.33 9.60 21.96 25.40 25.36 26.90 31.85 31.87 Greece 1.69 3.73 3.66 6.71 7.46 7.02 7.51 8.90 - Ireland 3.03 5.95 5.92 11.76 13.37 12.12 12.63 13.83 14.12 Italy 4.67 8.15 7.63 17.74 19.60 16.00 16.10 16.52 18.08 Luxembourg 6.35 11.98 7.72 16.37 18.85 18.49 20.06 23.12 - Netherlands 6.58 12.06 8.75 18.29 20.34 20.05 20.92 24.18 23.33 Norway 6.77 11.59 10.37 21.47 23.03 20.21 20.97 24.38 24.95 Portugal 1.58 2.06 1.53 3.77 5.17 4.50 4.60 5.37 - Spain 2.53 5.89 4.66 11.33 13.37 11.50 11.39 12.70 13.29 Sweden 7.18 12.51 9.66 20.93 24.59 17.70 18.86 21.64 24.56 Switzerland 6.09 11.09 9.66 20.86 23.23 22.63 24.91 29.30 28.34 United Kingdom 3.37 7.56 6.27 12.71 14.44 12.47 12.86 13.73 14.19 Trade-weighted measures 2 All 28 foreign economies 3.83 6.60 6.75 12.34 14.21 14.27 14.94 16.32 16.13 OECD 3 4.25 7.30 7.40 13.47 15.46 15.50 16.19 17.69 17.41 less Mexico, Korea 4 4.83 8.31 8.48 15.52 17.72 17.72 18.48 20.32 19.95 Europe 5.10 9.92 7.98 17.34 19.66 18.33 19.28 22.01 22.22 European Union 5.04 9.85 7.87 17.13 19.45 18.11 19.00 21.65 21.91 Asian NIEs .52 1.17 1.65 3.72 4.91 5.18 5.76 6.39 6.89 Dash means data not available. 1 Former West Germany. 2 For description of trade-weighted measures and economic groups, see the Technical Notes. 3 Organization for Economic Cooperation and Development. 4 Mexico joined the OECD in 1994 and Korea joined in 1996. Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Country or area 1975-96 1975-80 1980-85 1985-90 1990-96 1993 1994 1995 1996
United States 5.0 9.2 5.7 2.8 2.9 2.6 2.2 1.9 3.2
Canada 5.0 7.8 4.8 7.7 .8 -3.5 -3.6 1.2 3.9
Mexico .1 8.5 -6.4 -.1 -.9 10.6 2.9 -38.9 -.7
Australia 5.3 8.5 -.6 9.8 4.0 -4.1 12.2 7.3 10.0
Hong Kong 9.5 14.7 2.8 13.1 8.2 9.4 7.5 4.6 6.6
Israel 7.8 11.0 1.4 16.1 4.3 -3.0 4.2 14.7 4.2
Japan 9.7 13.0 2.8 15.1 8.6 16.8 10.8 12.3 -11.1
Korea 16.7 24.6 5.1 24.7 14.2 8.0 13.5 15.6 11.2
New Zealand 6.1 10.7 -3.5 13.3 4.8 1.3 11.5 13.2 9.1
Singapore 11.5 12.1 10.6 8.9 14.1 6.1 19.8 16.5 13.5
Sri Lanka 1/ 2.7 -4.7 4.9 4.6 - 5.0 7.1 6.7 -
Taiwan 13.6 20.1 8.4 21.2 6.9 2.0 5.8 6.0 .7
Austria 8.5 14.5 -3.1 18.6 5.8 -.6 6.7 18.0 -1.7
Belgium 6.9 15.4 -7.3 16.5 5.2 -2.7 7.5 15.6 -3.0
Denmark 6.7 11.5 -5.6 17.2 5.2 -4.5 6.8 18.9 .5
Finland 8.3 12.3 -.2 20.8 2.5 -16.5 14.6 30.3 -1.5
France 7.2 14.6 -3.4 15.2 4.1 -3.9 5.0 13.5 .0
Germany 2 8.0 14.2 -4.9 18.0 6.4 -.2 6.1 18.4 .1
Greece 1/ 8.7 17.2 -.4 12.9 - -5.9 7.0 18.5 -
Ireland 7.6 14.4 -.1 14.7 3.1 -9.3 4.2 9.5 2.1
Italy 6.7 11.8 -1.3 18.4 .3 -18.4 .6 2.6 9.4
Luxembourg 1/ 6.7 13.5 -8.4 16.2 - -1.9 8.5 15.3 -
Netherlands 6.2 12.9 -6.2 15.9 4.1 -1.4 4.3 15.6 -3.5
Norway 6.4 11.4 -2.2 15.7 2.5 -12.2 3.8 16.3 2.3
Portugal 1/ 6.3 5.4 -5.8 19.8 - -13.0 2.2 16.7 -
Spain 8.2 18.4 -4.6 19.4 2.7 -14.0 -1.0 11.5 4.6
Sweden 6.0 11.7 -5.0 16.7 2.7 -28.0 6.6 14.7 13.5
Switzerland 7.6 12.7 -2.7 16.6 5.2 -2.6 10.1 17.6 -3.3
United Kingdom 7.1 17.5 -3.7 15.2 1.9 -13.6 3.1 6.8 3.4
Trade-weighted measures 3
All 28 foreign economies 7.4 12.5 1.0 12.8 4.7 2.0 4.9 4.7 .5
less Mexico, Israel 8.2 13.0 1.7 14.1 5.2 1.2 5.1 9.2 .6
OECD 4 6.8 12.0 .1 12.3 4.1 1.8 4.2 4.1 -.2
less Mexico, Korea 5 7.1 11.8 .6 13.2 4.2 .3 3.9 8.9 -.8
Europe 7.2 14.5 -4.1 16.7 3.9 -7.5 4.7 13.0 1.7
European Union 7.2 14.6 -4.1 16.7 3.8 -7.7 4.5 12.8 1.9
Asian NIEs 13.4 18.9 7.0 18.4 10.6 5.7 11.0 10.5 7.1
Rates of change based on compound rate method.
Dash means data not available.
1 1975-95.
2 Former West Germany.
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.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Country or area 1975 1980 1985 1990 1992 1993 1994 1995 1996 United States 6.36 9.87 13.01 14.91 16.09 16.51 16.87 17.19 17.74 Canada 6.07 10.13 14.94 18.49 20.59 21.21 21.66 22.02 22.73 Mexico 18 51 409 4440 6716 7.48 8.34 9.66 11.39 Australia 4.30 7.43 11.70 16.74 17.71 18.37 19.16 20.32 21.13 Hong Kong 3.73 7.50 13.46 24.91 30.31 33.19 35.65 37.30 39.74 Israel 1.44 19.42 4.79 17.24 22.36 24.97 27.66 31.73 36.10 Japan 889 1245 1512 1856 2065 2112 2154 2223 2289 Korea 157 583 1074 2623 4075 4531 5141 5710 6624 New Zealand 2.65 5.48 8.98 13.98 14.70 14.79 15.06 15.41 16.04 Singapore 2.00 3.20 5.43 6.85 8.07 8.49 9.61 10.39 11.73 Sri Lanka 1.97 3.58 7.58 14.05 17.51 20.20 22.32 24.45 - Taiwan 15.17 36.13 59.60 105.68 128.02 137.00 145.44 154.26 160.87 Austria 78.46 114.78 156.75 201.07 222.93 234.70 245.38 255.87 264.22 Belgium 235.10 382.88 532.39 642.30 714.70 747.53 777.32 792.10 807.26 Denmark 36.00 60.98 86.18 111.18 120.84 123.96 129.64 135.86 141.40 Finland 16.88 30.64 50.56 80.56 89.40 95.19 99.76 108.64 112.35 France 19.34 37.73 67.49 82.97 89.41 91.98 94.48 96.45 98.96 Germany 1 15.59 22.39 28.23 35.50 39.67 41.96 43.63 45.61 47.96 Greece 55 159 506 1064 1422 1610 1821 2062 - Ireland 1.36 2.89 5.55 7.10 7.85 8.27 8.43 8.62 8.82 Italy 3048 6966 14563 21258 24146 25175 25943 26911 27894 Luxembourg 233 350 458 547 606 640 671 682 - Netherlands 16.59 23.93 29.04 33.32 35.78 37.25 38.06 38.79 39.33 Norway 35.29 57.20 89.11 134.26 143.13 143.47 147.92 154.46 161.18 Portugal 40.26 103.28 263.37 538.11 697.80 724.15 763.09 804.35 - Spain 145 422 792 1156 1369 1466 1525 1582 1684 Sweden 29.73 52.91 83.12 123.98 143.26 137.99 145.55 154.51 164.73 Switzerland 15.72 18.57 23.71 29.00 32.66 33.45 34.06 34.61 35.03 United Kingdom 1.52 3.25 4.84 7.13 8.17 8.31 8.40 8.70 9.09 Dash means data not available. For currency units, see note to table 6. 1 Former West Germany. Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Country or area 1975-96 1975-80 1980-85 1985-90 1990-96 1993 1994 1995 1996
United States 5.0 9.2 5.7 2.8 2.9 2.6 2.2 1.9 3.2
Canada 6.5 10.8 8.1 4.4 3.5 3.0 2.1 1.7 3.2
Mexico 36.0 23.2 51.6 61.1 17.0 11.4 11.5 15.8 17.9
Australia 7.9 11.6 9.5 7.4 4.0 3.7 4.3 6.1 4.0
Hong Kong 11.9 15.0 12.4 13.1 8.1 9.5 7.4 4.6 6.5
Israel 62.0 68.3 200.9 29.2 13.1 11.7 10.8 14.7 13.8
Japan 4.6 7.0 4.0 4.2 3.6 2.3 2.0 3.2 3.0
Korea 19.5 30.0 13.0 19.6 16.7 11.2 13.5 11.1 16.0
New Zealand 9.0 15.6 10.4 9.3 2.3 .6 1.8 2.3 4.1
Singapore 8.8 9.9 11.2 4.8 9.4 5.2 13.2 8.1 12.9
Sri Lanka 1/ 13.4 12.7 16.2 13.1 - 15.4 10.5 9.5 -
Taiwan 11.9 19.0 10.5 12.1 7.3 7.0 6.2 6.1 4.3
Austria 6.0 7.9 6.4 5.1 4.7 5.3 4.6 4.3 3.3
Belgium 6.1 10.2 6.8 3.8 3.9 4.6 4.0 1.9 1.9
Denmark 6.7 11.1 7.2 5.2 4.1 2.6 4.6 4.8 4.1
Finland 9.4 12.7 10.5 9.8 5.7 6.5 4.8 8.9 3.4
France 8.1 14.3 12.3 4.2 3.0 2.9 2.7 2.1 2.6
Germany 2 5.5 7.5 4.7 4.7 5.1 5.8 4.0 4.5 5.2
Greece 1/ 19.9 23.9 26.0 16.1 - 13.2 13.1 13.2 -
Ireland 9.3 16.3 13.9 5.0 3.7 5.4 1.9 2.3 2.3
Italy 11.1 18.0 15.9 7.9 4.6 4.3 3.1 3.7 3.7
Luxembourg 1/ 5.5 8.5 5.5 3.6 - 5.6 4.8 1.6 -
Netherlands 4.2 7.6 3.9 2.8 2.8 4.1 2.2 1.9 1.4
Norway 7.5 10.1 9.3 8.5 3.1 .2 3.1 4.4 4.4
Portugal 1/ 16.2 20.7 20.6 15.4 - 3.8 5.4 5.4 -
Spain 12.4 23.8 13.4 7.9 6.5 7.1 4.0 3.7 6.4
Sweden 8.5 12.2 9.5 8.3 4.9 -3.7 5.5 6.2 6.6
Switzerland 3.9 3.4 5.0 4.1 3.2 2.4 1.8 1.6 1.2
United Kingdom 8.9 16.4 8.3 8.1 4.1 1.7 1.1 3.6 4.5
Trade-weighted measures 3
All 28 foreign economies 10.8 13.6 14.0 11.7 6.2 4.8 4.5 4.9 5.8
less Mexico, Israel 7.6 12.0 8.0 6.3 4.9 4.0 3.7 3.7 4.4
OECD 4 10.2 12.7 12.3 11.7 5.8 4.4 4.0 4.7 5.6
less Mexico, Korea 5 6.5 10.5 7.3 5.0 3.8 3.1 2.5 2.9 3.4
Europe 7.6 12.4 8.7 5.8 4.3 3.7 3.0 3.5 3.8
European Union 7.7 12.8 8.9 5.9 4.3 3.8 3.1 3.5 3.9
Asian NIEs 13.4 19.6 11.6 12.9 10.4 8.2 9.8 7.6 9.6
Rates of change based on compound rate method.
Dash means data not available.
1 1975-95.
2 Former West Germany.
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.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Country or area 1975 1980 1985 1990 1992 1993 1994 1995 1996 United States 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Canada 1.017 1.169 1.366 1.167 1.209 1.290 1.366 1.373 1.364 Mexico 12.50 22.97 256.9 2813 3095 3.116 3.375 6.419 7.601 Australia .7647 .8772 1.428 1.281 1.360 1.471 1.367 1.350 1.277 Hong Kong 4.939 4.976 7.791 7.790 7.740 7.736 7.729 7.736 7.735 Israel .6390 5.124 1.179 2.016 2.459 2.830 3.011 3.011 3.288 Japan 296.7 225.7 238.5 145.0 126.8 111.1 102.2 93.96 108.8 Korea 484.0 607.4 870.0 707.8 780.6 802.7 803.5 771.3 804.5 New Zealand .8254 1.027 2.010 1.677 1.859 1.847 1.685 1.524 1.454 Singapore 2.371 2.141 2.200 1.813 1.629 1.616 1.527 1.417 1.410 Sri Lanka 7.050 16.53 27.16 40.06 43.83 48.32 49.42 51.25 - Taiwan 38.00 36.02 39.85 26.92 25.16 26.42 26.47 26.50 27.47 Austria 17.40 12.93 20.68 11.33 10.99 11.64 11.41 10.08 10.59 Belgium 36.69 29.20 59.34 33.42 32.15 34.58 33.43 29.47 30.97 Denmark 5.735 5.629 10.60 6.190 6.037 6.486 6.356 5.600 5.801 Finland 3.665 3.719 6.197 3.830 4.487 5.725 5.234 4.376 4.595 France 4.282 4.220 8.980 5.447 5.294 5.667 5.546 4.986 5.116 Germany 1 2.455 1.815 2.942 1.617 1.562 1.655 1.622 1.432 1.505 Greece 32.29 42.62 138.1 158.5 190.6 229.3 242.6 231.7 - Ireland .4500 .4860 .9379 .6033 .5868 .6827 .6680 .6236 .6250 Italy 652.4 855.1 1909 1198 1232 1573 1611 1629 1543 Luxembourg 36.78 29.24 59.38 33.42 32.15 34.60 33.46 29.48 - Netherlands 2.523 1.985 3.318 1.822 1.759 1.858 1.819 1.604 1.686 Norway 5.214 4.936 8.593 6.254 6.214 7.098 7.055 6.336 6.459 Portugal 25.45 50.05 172.1 142.7 135.1 161.1 165.9 149.9 - Spain 57.39 71.64 170.0 102.0 102.4 127.5 133.9 124.6 126.7 Sweden 4.142 4.229 8.603 5.923 5.826 7.796 7.716 7.141 6.708 Switzerland 2.581 1.675 2.455 1.390 1.406 1.478 1.367 1.181 1.236 United Kingdom .4501 .4300 .7708 .5605 .5662 .6660 .6528 .6335 .6407 1 Former West Germany. Note: National currency units are United States, dollar; Canada, dollar; Mexico, old peso (1975-92), new peso (1993-95); Australia, dollar; Hong Kong, dollar; Israel, shekel (1975-84), new shekel (1985-95); Japan, yen; Korea, won; New Zealand, dollar; Singapore, dollar; Sri Lanka, rupee; Taiwan, dollar; Austria, shilling; Belgium, franc; Denmark, krone; Finland, markkaa; France, franc; Germany, mark; Greece, drachma; Ireland, pound, Italy, lira; Luxembourg, franc; Netherlands, guilder; Norway, krone; Portugal, escuado; Spain, peseta; Sweden, krona; Switzerland, franc; United Kingdom, pound. Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Country or area 1975-96 1975-80 1980-85 1985-90 1990-96 1993 1994 1995 1996
United States - - - - - - - - -
Canada -1.4 -2.7 -3.1 3.2 -2.6 -6.3 -5.6 -.5 .7
Mexico -26.3 -11.5 -38.3 -38.0 -15.3 -.7 -7.7 -47.4 -15.6
Australia -2.4 -2.7 -9.3 2.2 .1 -7.5 7.6 1.3 5.7
Hong Kong -2.1 -.1 -8.6 .0 .1 .1 .1 -.1 .0
Israel -29.3 -34.1 -66.3 -10.2 -7.8 -13.1 -6.0 .0 -8.4
Japan 4.9 5.6 -1.1 10.5 4.9 14.1 8.7 8.8 -13.6
Korea -2.4 -4.4 -6.9 4.2 -2.1 -2.8 -.1 4.2 -4.1
New Zealand -2.7 -4.3 -12.6 3.7 2.4 .6 9.6 10.6 4.8
Singapore 2.5 2.1 -.5 3.9 4.3 .8 5.8 7.8 .5
Sri Lanka 1/ -9.4 -15.7 -9.5 -7.5 - -9.3 -2.2 -3.6 -
Taiwan 1.6 1.1 -2.0 8.2 -.3 -4.8 -.2 -.1 -3.5
Austria 2.4 6.1 -9.0 12.8 1.1 -5.6 2.0 13.2 -4.8
Belgium .8 4.7 -13.2 12.2 1.3 -7.0 3.4 13.4 -4.8
Denmark -.1 .4 -11.9 11.4 1.1 -6.9 2.0 13.5 -3.5
Finland -1.1 -.3 -9.7 10.1 -3.0 -21.6 9.4 19.6 -4.8
France -.8 .3 -14.0 10.5 1.1 -6.6 2.2 11.2 -2.5
Germany 2 2.4 6.2 -9.2 12.7 1.2 -5.6 2.0 13.3 -4.9
Greece 1/ -9.4 -5.4 -21.0 -2.7 - -16.9 -5.5 4.7 -
Ireland -1.6 -1.5 -12.3 9.2 -.6 -14.0 2.2 7.1 -.2
Italy -4.0 -5.3 -14.8 9.8 -4.1 -21.7 -2.4 -1.1 5.6
Luxembourg 1/ 1.1 4.7 -13.2 12.2 - -7.1 3.4 13.5 -
Netherlands 1.9 4.9 -9.8 12.7 1.3 -5.3 2.1 13.4 -4.9
Norway -1.0 1.1 -10.5 6.6 -.5 -12.5 .6 11.3 -1.9
Portugal 1/ -8.5 -12.7 -21.9 3.8 - -16.1 -2.9 10.7 -
Spain -3.7 -4.3 -15.9 10.8 -3.5 -19.7 -4.8 7.5 -1.7
Sweden -2.3 -.4 -13.2 7.8 -2.1 -25.3 1.0 8.1 6.5
Switzerland 3.6 9.0 -7.4 12.0 2.0 -4.9 8.1 15.7 -4.4
United Kingdom -1.7 .9 -11.0 6.6 -2.2 -15.0 2.0 3.0 -1.1
Trade-weighted measures 3
All 28 foreign economies -2.3 -.5 -9.4 2.9 -1.2 -2.6 .4 .3 -4.9
less Mexico, Israel .6 1.0 -5.8 7.3 .3 -2.6 1.3 5.3 -3.7
OECD 4 -2.4 -.3 -9.6 2.8 -1.4 -2.5 .4 .0 -5.3
less Mexico, Korea 5 .7 1.3 -6.1 7.9 .3 -2.7 1.4 5.8 -4.0
Europe -.3 2.0 -11.7 10.3 -.4 -10.9 1.7 9.2 -2.1
European Union -.4 1.7 -11.9 10.3 -.5 -11.1 1.4 8.9 -2.0
Asian NIEs .0 -.5 -4.2 4.9 .2 -2.3 1.1 2.6 -2.3
Rates of change based on compound rate method.
1 1975-95.
2 Former West Germany.
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.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
Technical Notes
The tables in this news release present international comparisons of hourly compensation
costs for production workers in manufacturing in selected countries or areas. The total
compensation measures are prepared by the Bureau of Labor Statistics in order to assess
international differences in employer labor costs. Comparisons based on the more readily
available average earnings statistics published by many countries can be very misleading.
National definitions of average earnings differ considerably; average earnings do not
include all items of labor compensation; and the omitted items of compensation frequently
represent a large proportion of total compensation.
The compensation measures are computed in national currency units and are converted into
U.S. dollars at prevailing commercial market currency exchange rates. The foreign currency
exchange rates used in the calculations are the average daily exchange rates for the
reference period. They are appropriate measures for comparing levels of employer labor
costs. They do not indicate relative living standards of workers or the purchasing power
of their income. Prices of goods and services vary greatly among countries, and commercial
market exchange rates are not reliable indicators of relative differences in prices.
Definitions
Hourly compensation costs include (1) hourly direct pay and (2) employer social insurance
expenditures and other labor taxes. Hourly direct pay includes all payments made directly
to the worker, before payroll deductions of any kind, consisting of (a) pay for time
worked (basic time and piece rates plus overtime premiums, shift differentials, other
premiums and bonuses paid regularly each pay period, and cost-of-living adjustments) and
(b) other direct pay (pay for time not worked (vacations, holidays, and other leave,
except sick leave), seasonal or irregular bonuses and other special payments, selected
social allowances, and the cost of payments in kind). Social insurance expenditures and
other labor taxes include (c) employer expenditures for legally required insurance
programs and contractual and private benefit plans (retirement and disability pensions,
health insurance, income guarantee insurance and sick leave, life and accident insurance,
occupational injury and illness compensation, unemployment insurance, and family
allowances) and, for some countries, (d) other labor taxes (other taxes on payrolls or
employment (or reductions to reflect subsidies), even if they do not finance programs that
directly benefit workers, because such taxes are regarded as labor costs). For
consistency, compensation is measured on an hours-worked basis for every country.
The BLS definition of hourly compensation costs is not the same as the International
Labour Office (ILO) definition of total labor costs. Hourly compensation costs do not
include all items of labor costs. The costs of recruitment, employee training, and plant
facilities and services(such as cafeterias and medical clinics(are not included because
data are not available for most countries. The labor costs not included account for no
more than 4 percent of total labor costs in any country for which the data are available.
Production workers generally include those employees who are engaged in fabricating,
assembly, and related activities; material handling, warehousing, and shipping;
maintenance and repair; janitorial and guard services; auxiliary production (for example,
powerplants); and other services closely related to the above activities. Working
supervisors are generally included; apprentices and other trainees are generally excluded.
Methods
Total compensation is computed by adjusting each country's average earnings series for
items of direct pay not included in earnings and for employer expenditures for legally
required insurance, contractual and private benefit plans, and other labor taxes. For the
United States and other countries that measure earnings on an hours-paid basis, the
figures are also adjusted in order to approximate compensation per hour worked.
Earnings statistics are obtained from surveys of employment, hours, and earnings or from
surveys or censuses of manufactures.
Adjustment factors are obtained from periodic labor cost surveys and interpolated or
projected to nonsurvey years on the basis of other information for most countries. The
information used includes annual tabulations on employer social security contribution
rates provided by the International Studies Staff of the U.S. Social Security
Administration, information on contractual and legislated fringe benefit changes from ILO
and national labor bulletins, and statistical series on indirect labor costs. For other
countries, adjustment factors are obtained from surveys or censuses of manufactures or
from reports on fringe-benefit systems and social security. For the United States, the
adjustment factors are special calculations for international comparisons based on data
from several surveys.
The statistics are also adjusted, where necessary, to account for major differences in
worker coverage; differences in industrial classification systems; and changes over time
in survey coverage, sample benchmarks, or frequency of surveys. Nevertheless, some
differences in industrial coverage remain and, with the exception of the United States,
Canada, and several other countries, the data exclude very small establishments (less than
5 employees in Japan and less than 10 employees in most European and some other
countries). For the United States, the methods used, as well as the results, differ
somewhat from those for other BLS series on U.S. compensation costs.
Hourly compensation costs are converted to U.S. dollars using the average daily exchange
rate for the reference period. The exchange rates used are prevailing commercial market
exchange rates as published by either the U.S. Federal Reserve Board or the International
Monetary Fund.
For further details on survey sources and on special estimation procedures for some
countries because of incomplete data, see International Comparisons of Hourly Compensation
Costs for Production Workers in Manufacturing, 1995 (Report 909, Bureau of Labor
Statistics, September 1996).
Country notes
The following are exceptions to the standard coverage and definitions explained above:
Australia. Compensation relates to production workers and nonproduction workers other than
those in managerial, executive, professional, and higher supervisory positions.
Hong Kong. Average of selected manufacturing industries. The industries covered accounted
for about 70 percent of all persons employed in manufacturing in 1988. Compensation
excludes overtime pay.
Austria. Excludes workers in establishments considered handicraft manufacturers. (All
printing and publishing and miscellaneous manufacturing establishments are classified in
handicrafts.) In 1986, handicraft employment was about 35 percent of all manufacturing
employment. Average compensation per employee was about 10 percent lower in manufacturing
including handicrafts than in manufacturing excluding handicrafts.
Finland. Includes workers in mining and electrical power plants. For comparability with
other countries, compensation excludes some obligatory training and plant facilities
costs; these costs would add 1.6 percent to average hourly compensation costs in 1994.
Germany. Refers to former West Germany. Excludes workers in establishments considered
handicraft manufacturers. In 1990, handicraft employment was about 25 percent of all
manufacturing employment. Average hourly earnings of production workers were about 3
percent lower in manufacturing including handicrafts than in manufacturing excluding
handicrafts.
Ireland. Data refer to September for 1975.
Norway. For comparability with other countries, compensation excludes some obligatory
training and plant facilities costs; these costs would add 2.2 percent to average hourly
compensation costs in 1994.
Trade-weighted measures
The trade weights used to compute the average compensation cost measures for selected
country or economic groups are the sum of U.S. imports of manufactured products for
consumption (customs value) and U.S. exports of domestic manufactured products (free along
side {f.a.s.} value) in 1992 for each country or area and each economic group. See table
A.
The trade data used to compute the weights are U.S. Bureau of the Census statistics of
U.S. imports and exports converted to an industrial classification basis from data
initially collected under the Harmonized Tariff Schedule commodity classification system.
The Organization for Economic Cooperation and Development (OECD) includes Canada, Mexico,
Australia, Japan, Korea, New Zealand, and all European countries. The European Union (EU)
consists of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom. Europe
includes the EU countries plus Norway and Switzerland. The group labeled "Asian
NIEs" consists of the four newly industrializing economies of Hong Kong, Korea,
Singapore, and Taiwan.
The trade weighted measures relate to all the countries or areas covered in the series.
Estimates are computed for missing country data using the average trend in other economies
to estimate the missing data. Trade weighted average percent changes for the 28 foreign
economies are computed both including and excluding Mexico and Israel because their rapid
rates of inflation and currency changes in several years distort the trade-weighted
averages.
Table A. Share of total U.S. imports and exports
of manufactured products in 1992
(in percent)
Country or area 1992 Country or area 1992
and trade and trade
economic group share economic group share
Canada 19.2 Greece .1
Mexico 7.6 Ireland .6
Italy 2.3
Australia 1.4 Luxembourg .1
Hong Kong 2.0 Netherlands 1.9
Israel .8 Norway .3
Japan 15.8
Portugal .2
Korea 3.4 Spain .8
New Zealand .3 Sweden .8
Singapore 2.4 Switzerland 1.0
Sri Lanka .1 United Kingdom 4.4
Taiwan 4.4
Economic groups
Austria .3 28 foreign
Belgium 1.5 economies 80.8
Denmark .3 OECD 2/ 71.1
Finland .2 Europe 23.4
France 3.2 European Union 22.1
Germany 1/ 5.4 Asian NIEs 12.2
1/ Former West Germany.
2/ Organization for Economic Cooperation and Development.
Data limitations
Because compensation is partly estimated, the statistics should not be considered as
precise measures of comparative compensation costs. In addition, the figures are subject
to revision as the results of new labor cost surveys or other data used to estimate
compensation costs become available.
The comparative level figures in this report are averages for all manufacturing industries
and are not necessarily representative of all component industries. In the United States
and some other countries, such as Japan, differentials in hourly compensation cost levels
by industry are quite wide. In contrast, other countries, such as Germany and Sweden, have
narrow differentials.
Labor costs versus labor income
The hourly compensation figures in U.S. dollars shown in the tables provide comparative
measures of employer labor costs; they do not provide intercountry comparisons of the
purchasing power of worker incomes. Prices of goods and services vary greatly among
countries, and the commercial market exchange rates used to compare employer labor costs
do not reliably indicate relative differences in prices. Purchasing power parities(that
is, the number of foreign currency units required to buy goods and services equivalent to
what can be purchased with one unit of U.S. or other base-country currency(must be used
for meaningful international comparisons of the relative purchasing power of worker
incomes.
Total compensation converted to U.S. dollars at purchasing power parities would provide
one measure for comparing relative real levels of labor income. It should be noted,
however, that total compensation includes employer payments to funds for the benefit of
workers in addition to payments made directly to workers. (For a few countries, the
compensation measures also include taxes or subsidies on payrolls or employment even if
they do not finance programs which directly benefit workers.) Payments into these funds
provide either deferred income (for example, payments to retirement funds), a type of
insurance (for example, payments to unemployment or health benefit funds), or current
social benefits (for example, family allowances), and the relationship between employer
payments and current or future worker benefits is indirect. On the other hand, excluding
these payments would understate the total value of income derived from work because they
substitute for worker savings or self-insurance to cover retirement, medical costs, etc.
Total compensation, because it takes account of employer payments into funds for the
benefit of workers, is a broader income concept than either total direct earnings or
direct spendable earnings. An even broader concept would take account of all social
benefits available to workers, including those financed out of general revenues as well as
those financed through employment or payroll taxes.
These tables are online: http://www.stats.bls.gov
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