In comparison with 33 foreign countries covered, U.S. manufacturing hourly compensation costs in 2012 

ranked approximately in the middle at $35.67 (see Chart 1). In addition to Australia and Canada, countries with 

higher hourly compensation costs were primarily in northern and western Europe. Countries with lower hourly 

compensation costs were primarily in southern and eastern Europe, Asia, and Latin America.

Between 1997 and 2012, compensation costs in manufacturing as a percent of U.S. costs (see Table 1) increased 

or remained the same in all economies compared except Taiwan, improving U.S. cost competitiveness. 

 

 

Changes in a country’s compensation costs in U.S. dollars are roughly equivalent to the change in compensation 

costs in a country’s national currency plus the change in the value of the country’s currency relative to the U.S. 

dollar. This relationship is illustrated in Chart 2, where the bars in the right panel for each country can be 

summed to equal the bars in the left panel. In 2012, nearly all countries had at least moderate increases in hourly 

compensation costs in national currency, but the currencies of most countries depreciated against the U.S. 

dollar, resulting in U.S. dollar-denominated hourly compensation costs declining in most countries. 

31.23

34.18

35.34

35.67

36.59

38.17

39.62

39.81

41.53

42.60

45.79

47.68

48.47

49.80

52.19

57.79

63.36

0 20 40 60

United Kingdom

Italy

Japan

United States

Canada

Ireland

Netherlands

France

Austria

Finland

Germany

Australia

Denmark

Sweden

Belgium

Switzerland

Norway

2.10

6.36

8.25

8.95

9.46

10.41

11.20

11.30

11.95

12.10

18.87

19.41

20.14

20.72

24.16

24.77

26.83

0 20 40 60

Philippines

Mexico

Poland

Hungary

Taiwan

Estonia

Brazil

Slovakia

Czech Republic

Portugal

Argentina

Greece

Israel

Korea, Republic of

Singapore

New Zealand

Spain

Chart 1. Hourly compensation costs in manufacturing, U.S. dollars, 2012

United States

U.S. Dollars U.S. Dollars

International Comparisons of Hourly

Compensation Costs in Manufacturing, 2012

International Labor Comparisons August 9, 2013

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013
- 2 - 

-30 -20 -10 0 10 20 30

Greece

Portugal

Netherlands

Denmark

Czech Republic

Spain

France

Italy

Finland

Poland

Israel

Belgium

Switzerland

Slovakia

Brazil

Ireland

Austria

Germany

Hungary

Norway

Mexico

Japan

Estonia

United States

Canada

Sweden

Taiwan

United Kingdom

Australia

Philippines

Singapore

New Zealand

Korea, Republic of

Argentina

Percent change in hourly compensation (U.S. dollars)

United States

-30 -20 -10 0 10 20 30

Greece

Portugal

Netherlands

Denmark

Czech Republic

Spain

France

Italy

Finland

Poland

Israel

Belgium

Switzerland

Slovakia

Brazil

Ireland

Austria

Germany

Hungary

Norway

Mexico

Japan

Estonia

United States

Canada

Sweden

Taiwan

United Kingdom

Australia

Philippines

Singapore

New Zealand

Korea, Republic of

Argentina

Percent change in hourly compensation (National currency)

Percent change in value of foreign currency relative to U.S. dollar

United States

Chart 2. Annual percent change in hourly compensation costs in manufacturing and exchange rates, 2011-2012

Percent Percent

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013
- 3 - 

0 5 10 15 20 25 30 35 40 45 50 55

New Zealand

Philippines

Denmark

Poland

Taiwan

Switzerland

United Kingdom

Singapore

Israel

Argentina

Ireland

Norway

Japan

Portugal

Australia

Canada

Germany

Korea, Republic of

Netherlands

Finland

Greece

Hungary

United States

Austria

Spain

Estonia

Czech Republic

Slovakia

Italy

France

Mexico

Belgium

Brazil

Sweden

Percent

Social insurance expenditures Directly-paid benefits 2

Chart 3. Benefit components of hourly compensation costs as a percent of total compensation, 2012

(1) Social insurance expenditures are legally required, private, and contractual social benefit costs, and labor-related taxes 

minus subsidies.

(2) Directly-paid benefits are primarily pay for leave time, bonuses, and pay in kind.

(3) For Mexico, Republic of Korea, Norway, and Taiwan, separate measures of directly-paid benefits are not available.

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013

1

3

3

3

United States

3
- 4 - 

Chart 3 shows the benefit components of manufacturing employers’ compensation costs as a percent of total 

costs. (See Table 3 for data in U.S. dollars.) Countries are ordered based on social insurance expenditures as a 

percent of total compensation. In countries with the highest ratio of social insurance costs, such as Sweden, 

Brazil, and Belgium, social insurance makes up approximately one-third of total compensation costs. In the 

United States, social insurance costs account for about 24 percent of total compensation, while in the Asian 

countries, with the exception of the Republic of Korea, social insurance is less than 20 percent. 

Directly-paid benefits primarily comprise pay for leave time, bonuses, and pay in kind. The percentage of 

compensation that is directly-paid benefits tends to be higher in many European countries (due in large part to 

leave pay) and in Japan (where seasonal bonuses are a large portion of costs). Directly-paid benefits are a 

relatively smaller portion of costs in countries such as the United States, Australia, and Canada. 

The total benefits portion of compensation costs can be seen by combining social insurance with directly-paid 

benefits. Total benefits surpass 40 percent in 14 countries. In contrast, the ratio of benefit costs in the United 

States is about 33 percent. 

Find additional data 

Detailed time series tables of compensation costs in U.S. dollars, national currencies, and annual indexes for 1996-

2012 are available at www.bls.gov/ilc/ichccaesuppall.xls. 

Compensation costs for sub-manufacturing industries are also available at www.bls.gov/ilc/ichccindustryreport.htm. 

Data tables are available by country and industry at www.bls.gov/ilc/ichcccountry.xls and 

www.bls.gov/ilc/ichccindustry.xls. 

Go to www.bls.gov/ilc for additional information. 

Analyze trends with interactive dashboard 

The time series data tables in Excel include an interactive dashboard that displays charts from a custom selection of 

variables, countries, and time periods at www.bls.gov/ilc/dashboards.htm.

Elimination of ILC 

BLS has eliminated the International Labor Comparisons (ILC) program. This is the last BLS release of international 

comparisons of hourly compensation costs.

BLS is aware of other organizations that have obtained the methodology and intend to produce ILC indicators 

similar to those done previously by BLS. Please see the announcement at www.bls.gov/ilc. 
- 5 - 

China and India

BLS has developed estimates of hourly compensation costs for employees in the Chinese and Indian manufacturing 

sectors.1

 Due to various data gaps and methodological issues, compensation costs for China and India are not 

directly comparable to each other or with the data for other countries found in this report, and therefore are presented 

separately. Data are available for China through 2009 and for India through 2010. 

For China, BLS approximates average hourly compensation costs in manufacturing by filling important data gaps for 

hours worked per year and for benefit components of labor compensation. Further, the concepts and coverage of 

Chinese statistics on manufacturing employment and wages often do not follow international standards and can be 

difficult to understand. Largely because of these data gaps and challenges, BLS estimates for China cannot be 

considered as robust as the manufacturing statistics for the other countries in this report. 

For India, BLS estimates of compensation costs refer to formal manufacturing only, rather than to total 

manufacturing in the country. Unorganized sector manufacturing workers account for approximately 80 percent of 

total manufacturing employment in India and earn substantially less than their formal sector counterparts. For this 

reason, employers’ average compensation costs in formal manufacturing overstate average compensation costs for 

Indian manufacturing as a whole.

(1) For additional information about BLS work on China and India, see www.bls.gov/ilc/china.htm and www.bls.gov/ilc/india.htm.

0.60

0.68

0.74

0.83

0.95

1.21

1.59

1.74

0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75

2002

2003

2004

2005

2006

2007

2008

2009

2010

China

0.73

0.81

0.85

0.91

0.95

1.17

1.26

1.24

1.46

0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75

2002

2003

2004

2005

2006

2007

2008

2009

2010

India

Hourly compensation costs in manufacturing for China and India, in U.S. dollars, 2002-2010

NA

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013

 
- 6 - 

TECHNICAL NOTES

The international comparisons of hourly compensation costs in manufacturing are prepared to assess differences 

in employer labor costs among countries. BLS compensation data permit more meaningful comparisons of 

employer labor costs than data based solely on average earnings. Definitions of average earnings vary 

considerably by country and do not include many items of labor cost that frequently make up a large portion of 

total cost. BLS compensation data include nearly all labor costs incurred by employers. 

Below is a summary of the concepts used in this report. For more detailed information, see 

www.bls.gov/ilc/ichcctn.pdf. 

Definitions. Compensation costs include (1) direct pay (all payments made directly to the worker, before payroll 

deductions of any kind) and (2) social insurance expenditures (employer payments to secure entitlement to 

social benefits for employees) and labor-related taxes (minus subsidies). 

The data relate to all employees in manufacturing, including part-time and temporary workers. The selfemployed, unpaid family workers, contract workers, and workers in private households are excluded. 

Compensation Costs 

Direct Pay Employer Social Insurance Expenditures 

and Labor-related Taxes Pay for Time Worked Directly-Paid Benefits

• Basic wages

• Piece rate

• Overtime premiums

• Shift, holiday, or night 

work premiums 

• Cost-of-living 

adjustments

• Bonuses and premiums 

paid each pay period

• Pay for time not worked 

(vacations, holidays, and 

other leave, except sick 

leave)

• Seasonal and irregular 

bonuses 

• Payments in kind 

• Allowances for family 

events, commuting, etc. 

• Payments to employees’ 

savings funds 

• Retirement and disability pensions 

• Health insurance 

• Income guarantee insurance 

• Pay for sick leave

• Life and accident insurance

• Occupational injury and illness 

compensation 

• Unemployment insurance 

• Severance pay 

• Other social insurance expenditures

• Taxes (minus subsidies) on payrolls or 

employment

Methodology. In general, total compensation for each economy is calculated by adjusting earnings series to 

include items of direct pay, social insurance, and labor-related taxes and subsidies not included in earnings. For 

countries for which earnings data are not available on a per hour worked basis, BLS makes adjustments in order 

to approximate compensation per hour worked. Compensation costs are converted to U.S. dollars using the 

average daily exchange rate for the reference year.

Earnings statistics are typically obtained from annual establishment surveys. Data on the other components of 

compensation are typically obtained from periodic labor cost surveys, employer confederations, and other 

sources.
- 7 - 

For the United States, the methods and results differ somewhat from those of other BLS series on U.S. 

compensation costs. 

The statistics are adjusted, where possible, to account for major differences in worker and survey coverage. 

More information on exceptions to these methods, as well as data sources used, may be found in “Country 

Notes and Data Sources” located at www.bls.gov/ilc/ichccsources.pdf. 

The compensation measures in this report are based on statistics available to BLS as of July 2013. 
- 8 - 

 

Hourly Compensation Costs

in U.S. dollars U.S.=100

 1997(1) 2012 1997(1) 2012

Norway 25.83 63.36 112 178

Switzerland 30.42 57.79 132 162

Belgium 28.92 52.19 125 146

Sweden 25.02 49.80 109 140

Denmark 23.70 48.47 103 136

Australia 18.93 47.68 82 134

Germany 29.16 45.79 127 128

Finland 22.36 42.60 97 119

Austria 24.91 41.53 108 116

France 24.86 39.81 108 112

Netherlands 22.45 39.62 97 111

Ireland 16.69 38.17 72 107

Canada 18.49 36.59 80 103

United States 23.04 35.67 100 100

Japan 21.99 35.34 95 99

Italy 19.76 34.18 86 96

United Kingdom 19.31 31.23 84 88

Spain 13.95 26.83 61 75

New Zealand 12.06 24.77 52 69

Singapore 12.15 24.16 53 68

Korea, Republic of 9.22 20.72 40 58

Israel 11.62 20.14 50 56

Greece 11.61 19.41 50 54

Argentina 7.55 18.87 33 53

Portugal 6.46 12.10 28 34

Czech Republic 3.25 11.95 14 34

Slovakia 2.84 11.30 12 32

Brazil 7.07 11.20 31 31

Estonia NA 10.41 NA 29

Taiwan 7.04 9.46 31 27

Hungary 3.05 8.95 13 25

Poland 3.15 8.25 14 23

Mexico 3.47 6.36 15 18

Philippines 1.28 2.10 6 6

Note:

'NA' means data not available.

(1) With the exception of Estonia, 1997 is the first year data for all countries are available to BLS.

For additional information, see the technical notes at www.bls.gov/ilc/ichcctn.pdf and country notes at www.bls.gov/ilc/ichccsources.pdf. 

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013

Table 1. Hourly compensation costs in manufacturing, U.S. dollars, and as a percent of 

costs in the United States
- 9 - 

1997-2012 2011-2012 

National 

currency 

change

Exchange 

rate 

change(1) 

U.S. dollar 

change(2)

National 

currency 

change

Exchange 

rate 

change(1) 

U.S. dollar 

change(2)

Argentina 17.6 -9.6 6.3 30.3 -9.4 18.1

Korea, Republic of 6.7 -1.1 5.5 9.5 -1.7 7.6

New Zealand 3.5 1.4 4.9 3.5 2.3 5.9

Singapore 3.5 1.2 4.7 3.8 0.6 4.5

Philippines 5.9 -2.4 3.4 1.2 2.6 3.8

Australia 4.0 2.2 6.4 2.3 0.3 2.6

United Kingdom 3.5 -0.2 3.3 2.7 -1.2 1.5

Taiwan 2.2 -0.2 2.0 1.8 -0.6 1.2

Sweden 3.9 0.8 4.7 5.6 -4.2 1.2

Canada 2.4 2.2 4.7 1.8 -1.1 0.7

United States 3.0 0.0 3.0 0.4 0.0 0.4

Estonia NA NA NA 8.2 -7.7 -0.1

Japan 0.4 2.8 3.2 -0.9 -0.2 -1.0

Mexico 7.7 -3.3 4.1 3.8 -5.5 -1.9

Norway 4.8 1.3 6.2 1.6 -3.7 -2.2

Hungary 8.8 -1.2 7.4 9.3 -10.7 -2.4

Germany 2.2 0.9 3.1 4.6 -7.7 -3.4

Austria 2.6 0.9 3.5 4.1 -7.7 -3.9

Ireland 5.2 0.5 5.7 4.1 -7.7 -3.9

Brazil 7.3 -3.9 3.1 12.2 -14.4 -4.0

Slovakia 7.0 2.4 9.6 4.0 -7.7 -4.0

Switzerland 1.4 3.0 4.4 1.2 -5.5 -4.3

Belgium 3.1 0.9 4.0 3.2 -7.7 -4.7

Israel 4.5 -0.7 3.7 2.7 -7.2 -4.7

Poland 6.6 0.0 6.6 4.5 -9.0 -4.9

Finland 3.6 0.8 4.4 2.4 -7.7 -5.4 

Italy 2.9 0.8 3.7 2.4 -7.7 -5.4

France 2.3 0.9 3.2 2.4 -7.7 -5.5

Spain 3.6 0.8 4.5 2.2 -7.7 -5.6

Czech Republic 5.6 3.3 9.1 4.0 -9.6 -6.0

Denmark 4.0 0.9 4.9 1.5 -7.6 -6.2

Netherlands 3.0 0.9 3.9 1.6 -7.7 -6.3

Portugal 3.5 0.8 4.3 -0.3 -7.7 -8.0

Greece 3.3 0.2 3.5 -7.2 -7.7 -14.4

Note:

'NA' means data not available.

(1) Exchange rates are value of foreign currency relative to the U.S. dollar.

(2) U.S. dollar changes are approximately equal to national currency changes plus exchange rate changes for each country.

For additional information, see the technical notes at www.bls.gov/ilc/ichcctn.pdf and country notes at www.bls.gov/ilc/ichccsources.pdf. 

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013

Table 2. Average annual percent change in hourly compensation costs in manufacturing and 

exchange rates
- 10 - 

 

 Hourly Compensation Costs

 

Social 

Insurance(1)

Direct Pay

 Total Total

DirectlyPaid

Benefits(2)

Pay for Time 

Worked(3)

Norway 63.36 11.33 52.03 NA NA

Switzerland 57.79 8.85 48.95 10.75 38.19

Belgium 52.19 16.79 35.40 10.54 24.86

Sweden 49.80 16.61 33.20 5.17 28.03

Denmark 48.47 4.67 43.80 7.26 36.54

Australia 47.68 9.39 38.29 4.55 33.73

Germany 45.79 9.73 36.07 9.62 26.45

Finland 42.60 9.50 33.10 8.07 25.03

Austria 41.53 10.65 30.88 8.91 21.96

France 39.81 11.92 27.89 7.38 20.51

Netherlands 39.62 8.56 31.06 8.40 22.66

Ireland 38.17 6.68 31.50 5.71 25.78

Canada 36.59 7.30 29.30 3.62 25.68

United States 35.67 8.51 27.15 3.22 23.93

Japan 35.34 6.40 28.94 8.83 20.11

Italy 34.18 9.89 24.29 4.98 19.31

United Kingdom 31.23 4.86 26.37 4.11 22.27

Spain 26.83 6.95 19.89 5.22 14.67

New Zealand 24.77 1.05 23.72 2.85 20.87

Singapore 24.16 4.03 20.13 4.42 15.71

Korea, Republic of 20.72 4.45 16.27 NA NA

Israel 20.14 3.47 16.67 1.45 15.22

Greece 19.41 4.48 14.93 3.64 11.29

Argentina 18.87 3.29 15.58 2.64 12.94

Portugal 12.10 2.38 9.72 2.33 7.39

Czech Republic 11.95 3.18 8.77 1.54 7.23

Slovakia 11.30 3.06 8.23 2.11 6.12

Brazil 11.20 3.67 7.53 1.58 5.95

Estonia 10.41 2.71 7.69 0.94 6.75

Taiwan 9.46 1.37 8.08 NA NA

Hungary 8.95 2.10 6.84 1.77 5.08

Poland 8.25 1.04 7.21 2.12 5.09

Mexico 6.36 1.92 4.45 NA NA

Philippines 2.10 0.18 1.92 0.36 1.56

Note:

'NA' means data not available.

(1) Social insurance expenditures are legally required, private, and contractual social benefit costs, and labor-related taxes minus subsidies.

(2) Directly-paid benefits are primarily pay for leave time, bonuses, and pay in kind.

(3) Pay for time worked is primarily base wages and salaries, overtime pay, regular bonuses and premiums (paid each pay period), and cost of 

living adjustments.

For additional information, see the technical notes at www.bls.gov/ilc/ichcctn.pdf and country notes at www.bls.gov/ilc/ichccsources.pdf. 

Source: U.S. Bureau of Labor Statistics, International Labor Comparisons, August 2013

Table 3. Components of hourly compensation costs in manufacturing, U.S. dollars, 2012