The trade-weighted average of hourly compensation costs in U.S. dollars for all employees in manufacturing among 32 foreign economies was 85 percent of the U.S. level in 2008, increasing from 82 percent in 2007, according to data issued by the U.S. Bureau of Labor Statistics. Compensation costs relative to the United States rose or remained unchanged in 28 of the 32 foreign economies covered in 2008. This news release contains data for all employees and production workers.
In the United States, hourly compensation costs for all employees in manufacturing rose 2.4 percent from the 2007 level to $32.26 in 2008. When measured in national currency terms, trade-weighted average costs increased 3.5 percent in the combined 32 foreign economies in 2008. 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 7.2 percent on a U.S. dollar basis. Compensation costs for all employees 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 in U.S. dollar terms. Data on a national currency basis is converted to U.S. dollars using the average daily exchange rate for the reference year. Compensation costs in U.S. dollars are often used as indicators of competitiveness of manufactured goods in world trade and are the focus of the following discussion.
Compensation costs for all employees in manufacturing measured in U.S. dollars continued to rise in 2008 in most of the foreign economies – with only two countries, the Republic of Korea and the United Kingdom, showing a decrease in costs (-16.2 percent and -3.6 percent, respectively). In the Republic of Korea, the majority of the decrease was due to the depreciation of the won (-15.4 percent). In the United Kingdom, the entire decrease was due to the depreciation of the pound (-7.4 percent). The strongest growth in hourly compensation costs in U.S. dollars was seen in the Eastern European countries (26.0 percent), Argentina (24.7 percent), Israel (23.5 percent) and Singapore (19.5 percent). The changes in hourly compensation in Canada and Mexico were relatively small (2.0 percent and 3.5 percent, respectively). The rate of compensation increase in a trade-weighted average of the 32 foreign economies was 7.2 percent in 2008, compared to 9.8 percent in 2007.
Exchange rates
In 2008, the trade-weighted value of the foreign currencies against the dollar increased by 3.1 percent, continuing the trend seen over the last several years. From 1996 to 2002, the trade-weighted value of the currencies against the U.S. dollar weakened, on average, while the opposite has been true from 2003 to 2008. The currencies of all economies appreciated against the U.S. dollar in 2008 with the exception of Argentina, Mexico, Republic of Korea, New Zealand and the United Kingdom.
The movements of the foreign currencies relative to the U.S. dollar in 2008 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 3.5 percent. However, when adjusted for the appreciation of the foreign currencies against the U.S. dollar, this increase in costs was magnified to 7.2 percent. In 2008, changes in both hourly compensation costs and exchange rates moved in the same direction for nearly all countries, so that increases (or decreases) in percent changes in hourly compensation costs in national currency were larger when measured in U.S. dollars. However, in Argentina, Mexico, New Zealand and the United Kingdom, hourly compensation costs measured in national currency increased while the exchange rates decreased. As a result, for these four countries, hourly compensation costs measured in U.S. dollars were less than those measured in national currency.
Compensation Costs for Production Workers
BLS also compiles hourly compensation costs data for production workers in manufacturing. Production workers generally include those employees who are engaged in fabricating, assembly, and related activities and typically account for a large part of manufacturing employment. All employees include production workers as well as all others employed full or part time in an establishment. The production worker series includes data for Hong Kong SAR, Sri Lanka and Luxembourg, three economies not covered by the all employee series. Argentina, Greece and Slovakia are not included in the production worker series as comparable data are not available.
The hourly compensation costs measures are based on statistics available to BLS as of June 2010. 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. BLS expects to issue data for 2009 within the next six months.
China: Hourly Compensation Costs for All Employees in
Manufacturing, 2005-2008
National U.S. Index (1)
Year Currency Dollar (United
Basis Basis States
(Yuan) (US$) =100)
2005 5.95 0.73 2.4
2006 6.44 0.81 2.7
2007 (2) 8.06 1.06 3.4
2008 9.48 1.36 4.2
India: Hourly Compensation Costs for All Employees in
Manufacturing, 2003-2005
National U.S. Index (1)
Year Currency Dollar (United
Basis Basis States
(Rupees) (US$) =100)
2003 37.68 0.81 2.9
2004 38.55 0.85 2.9
2005 40.02 0.91 3.1
(1) The indexes represent hourly compensation costs in China and India as a percent of
hourly compensation costs for all employees in U.S. manufacturing.
(2) Break in series. Data for town and village enterprises (TVEs) include
self-employed workers prior to 2007. Data for 2007 and 2008 exclude self-employed workers.
END OF BOX: Compensation costs for China and India
Table A. Hourly compensation costs, in national currency and in
U.S. dollars, for all employees in manufacturing and exchange
rates (U.S. dollars per national currency unit)
Percent change, 2007-2008
Hourly Hourly
Country compensation, compensation,
or area national Exchange U.S.
currency Rates dollars
Americas
United States 2.4 - 2.4
Argentina 26.8 -1.7 24.7
Brazil 9.7 6.2 16.5
Canada 1.3 0.7 2.0
Mexico 5.6 -1.9 3.5
Asia and Oceania
Australia 6.4 1.7 8.2
Israel 6.2 16.3 23.5
Japan 1.8 13.9 16.0
Korea, Republic of -.9 -15.4 -16.2
New Zealand 4.3 -2.9 1.3
Philippines 6.8 3.8 10.9
Singapore 12.2 6.5 19.5
Taiwan 2.4 4.2 6.8
Europe
Austria 3.2 7.4 10.8
Belgium 3.5 7.4 11.2
Czech Republic 4.8 20.3 26.1
Denmark 1.3 6.9 8.3
Finland 5.4 7.4 13.2
France 3.1 7.4 10.7
Germany 2.3 7.4 9.8
Greece 2.9 7.4 10.5
Hungary 6.0 7.0 13.4
Ireland 4.9 7.4 12.6
Italy 3.4 7.4 11.1
Netherlands 3.8 7.4 11.4
Norway 5.7 3.9 9.8
Poland 10.1 22.2 34.5
Portugal 4.2 7.4 12.0
Slovakia 8.8 18.4 28.8
Spain 5.2 7.4 13.0
Sweden 4.4 2.6 7.1
Switzerland 1.8 10.9 12.9
United Kingdom 4.1 -7.4 -3.6
Trade-weighted measures (1)
All 31 foreign economies 3.5 3.1 7.2
OECD (2) 2.9 2.7 5.6
Europe 3.5 5.3 8.9
Euro Area 3.2 7.5 11.0
Eastern Europe 7.5 17.1 26.0
East Asia ex-Japan 3.6 -3.0 .9
(1) For a description of trade-weighted measures and economic groups,
see the Technical Notes starting on page 8 of this release.
(2) Organization for Economic Cooperation and Development.
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Table B. Hourly Compensation Costs of All Employees and Production Workers
in Manufacturing, 2008
Country All Production All Production Production
or area Employees Workers Employees Workers Workers (All
(US=100) (US=100) (US$) (US$) Employees=100)
Americas
United States 100 100 32.26 25.65 80
Argentina 31 - 9.89 - -
Brazil 26 27 8.28 6.93 84
Canada 101 116 32.69 29.78 91
Mexico 13 12 4.04 3.12 77
Asia and Oceania
Australia 114 127 36.88 32.49 88
Hong Kong SAR (1) - 23 - 5.91 -
Israel 61 67 19.61 17.13 87
Japan 86 90 27.80 23.15 83
Korea, Republic of 50 55 16.27 14.20 87
New Zealand 60 68 19.43 17.48 90
Philippines 5 5 1.68 1.31 78
Singapore 58 38 18.77 9.83 52
Sri Lanka - 3 - .68 -
Taiwan 27 27 8.68 6.95 80
Europe
Austria 148 152 47.72 38.88 81
Belgium 146 154 47.14 39.42 84
Czech Republic 38 40 12.20 10.35 85
Denmark 159 178 51.28 45.74 89
Finland 138 147 44.68 37.64 84
France 130 123 41.94 31.61 75
Germany 149 141 48.22 36.07 75
Greece 61 - 19.58 - -
Hungary 30 29 9.56 7.52 79
Ireland 139 140 44.80 35.79 80
Italy 111 122 35.77 31.37 88
Luxembourg - 130 - 33.37 -
Netherlands 137 145 44.32 37.15 84
Norway 177 193 57.18 49.54 87
Poland 31 32 10.07 8.26 82
Portugal 38 38 12.23 9.83 80
Slovakia 34 - 10.91 - -
Spain 86 92 27.71 23.67 85
Sweden 134 150 43.33 38.39 89
Switzerland 134 145 43.28 37.12 86
United Kingdom 111 109 35.81 27.86 78
(1) Hong Kong Special Administrative Region of China.