For release 10:00 a.m. (EST) Tuesday, March 8, 2011 USDL-11-0303

Technical Information: (202) 691-5654 • ilchelp@bls.gov • www.bls.gov/ilc

Media Contact: (202) 691-5902 • PressOffice@bls.gov

INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS

IN MANUFACTURING, 2009

Manufacturing hourly compensation costs in the United States in 2009 were lower than in 12 European 

countries and Australia, but higher than in 20 other countries covered by the Bureau of Labor Statistics (see 

chart 1). U.S. hourly compensation costs rose about 4 percent from the previous year to $33.53. 

The 8 countries with the highest costs in Europe were 30-60 percent higher than the U.S. level, but costs in 

Canada and Japan were about 10 percent lower than the United States (see table 1).

 

 

29.60

30.36

30.78

33.53

34.62

34.97

39.02

39.87

40.08

43.50

43.77

44.29

46.52

48.04

49.40

49.56

53.89

0 20 40 60

Canada

Japan

United Kingdom

United States

Australia

Italy

Ireland

Sweden

France

Netherlands

Finland

Switzerland

Germany

Austria

Belgium

Denmark

Norway

1.50

5.38

7.50

7.76

8.32

8.62

9.83

10.14

11.21

11.24

11.95

14.20

17.44

17.50

18.39

19.23

27.74

0 20 40 60

Philippines

Mexico

Poland

Taiwan

Brazil

Hungary

Estonia

Argentina

Czech Republic

Slovakia

Portugal

Korea, Republic of

New Zealand

Singapore

Israel

Greece

Spain

Chart 1. Hourly compensation costs in manufacturing, U.S. dollars, 2009

United States
- 2 - 

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 2009, modest increases or declines in hourly compensation costs 

in national currency combined with depreciations in national currency relative to the U.S. dollar produced 

declines in U.S. dollar-denominated hourly compensation costs for 27 out of 33 foreign countries.

 

-25 -15 -5 5 15 25

Poland

United Kingdom

Korea, Republic of

Mexico

Hungary

Taiwan

Sweden

Canada

New Zealand

Czech Republic

Norway

Singapore

Australia

Israel

France

Estonia

Germany

Philippines

Belgium

Netherlands

Portugal

Italy

Finland

Brazil

Greece

Denmark

Ireland

Spain

Austria

Switzerland

Argentina

Slovakia

United States

Japan

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

-25 -15 -5 5 15 25

Poland

United Kingdom

Korea, Republic of

Mexico

Hungary

Taiwan

Sweden

Canada

New Zealand

Czech Republic

Norway

Singapore

Australia

Israel

France

Estonia

Germany

Philippines

Belgium

Netherlands

Portugal

Italy

Finland

Brazil

Greece

Denmark

Ireland

Spain

Austria

Switzerland

Argentina

Slovakia

United States

Japan

Pct. change in hourly compensation (National currency)

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

Chart 2. Annual percent change in hourly compensation costs in manufacturing and exchange rates, 2008-2009

United States United States

0

 

 

0

 

 
- 3 - 

China and India

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

sectors.1, 2

 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 release, and therefore are 

presented separately.3

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 news release.4

For India, BLS estimates of compensation costs refer to organized (or 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 organized sector 

counterparts. For this reason, employers’ average compensation costs in organized manufacturing overstate average 

compensation costs for Indian manufacturing as a whole. 

 

(1) For the most recent BLS work on China, see Judith Banister and George Cook, “China’s employment and compensation costs in 

manufacturing through 2008,” Monthly Labor Review, forthcoming March 2011, on the Internet at www.bls.gov/opub/mlr.

(2) For the most recent BLS work on India, see Jessica R. Sincavage, “Labor costs in India’s organized manufacturing sector,” 

Monthly Labor Review, May 2010, pp. 3–22, on the Internet at www.bls.gov/opub/mlr/2010/05/art1full.pdf.

(3) For a discussion of the limitations associated with comparing compensation costs for China and India, see Sincavage, “Labor costs 

in India’s organized manufacturing sector.”

(4) For additional information on employment and compensation costs in China, see www.bls.gov/ilc/china.htm.

0.62

0.66

0.73

0.81

1.06

1.36

0.00 0.25 0.50 0.75 1.00 1.25 1.50

2003

2004

2005

2006

2007

2008

China

0.81

0.85

0.91

0.95

1.17

0.00 0.25 0.50 0.75 1.00 1.25 1.50

2003

2004

2005

2006

2007

2008

India

Chart 3. Hourly compensation costs in manufacturing for China and India, in U.S. dollars, 2003-2008

NA
- 4 - 

Chart 4 shows the benefit components of manufacturing employers’ compensation costs as a percent of total 

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

0 10 20 30 40 50

New Zealand

Philippines

Denmark

Singapore

Taiwan

Switzerland

Ireland

Poland

Israel

Argentina

Korea, Republic of

Japan

Norway

Portugal

Canada

Australia

United Kingdom

Finland

Germany

Netherlands

United States

Austria

Hungary

Spain

Estonia

Mexico

Czech Republic

Greece

Slovakia

Belgium

Italy

France

Sweden

Brazil

Percent

Social insurance expenditures Directly-paid benefits2

Chart 4. Benefit components of hourly compensation costs as a percent of total compensation, 2009

(1) Social insurance expenditures include labor-related taxes net of subsidies.

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

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

United States

3

3

3

3

1
- 5 - 

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

Sweden, and France, 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 social insurance is less than 20 percent. 

Directly-paid benefits 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, Canada, and the United Kingdom. 

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

benefits. Total benefits surpass 40 percent in 15 countries. In contrast, the ratio of benefit costs in the United 

States is about 31 percent. 

 

Send us your inquiries or feedback 

We appreciate your inquiries and feedback. Feel free to email ILCHelp@bls.gov or call (202) 691-5654. 

Subscribe to ILC’s e-newsletter 

The e-newsletter provides links to the latest ILC releases, which usually occur once or twice per month. Email 

mailto:ILCPR@bls.gov with “subscribe” in the subject line. 

Changes in this news release

New country estimates for Estonia: For the first time, this news release includes data for Estonia. 

Revised estimates for Mexico: Compensation cost estimates for Mexico in this release are significantly 

higher due to a change in the primary data source used. This change was made to bring the employment 

coverage of BLS estimates for Mexico more in line with that for other countries. 

Additional indicators and time series data: Full time series of compensation costs in U.S. dollars and in 

national currencies, indexes of costs, and the components of compensation are available at 

www.bls.gov/web/ichcc.supp.toc.htm. 

Production worker and trade-weighted data: Compensation costs for production workers and for tradeweighted country groupings are no longer shown in this news release. These data are available in the time 

series tables at www.bls.gov/web/ichcc.supp.toc.htm. 2009 is the final year for which updated production 

worker data will be available.
- 6 - 

 

Hourly Compensation Costs

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

1997 (1) 2009 1997 (1) 2009

Norway 26.97 53.89 119 161

Denmark 24.64 49.56 109 148

Belgium 28.23 49.40 125 147

Austria 27.38 48.04 121 143

Germany 29.26 46.52 129 139

Switzerland 28.33 44.29 125 132

Finland 22.17 43.77 98 131

Netherlands 23.44 43.50 103 130

France 24.99 40.08 110 120

Sweden 25.11 39.87 111 119

Ireland 17.15 39.02 76 116

Italy 19.67 34.97 87 104

Australia 19.12 34.62 84 103

United States 22.67 33.53 100 100

United Kingdom 18.24 30.78 80 92

Japan 22.28 30.36 98 91

Canada 18.89 29.60 83 88

Spain 13.91 27.74 61 83

Greece NA 19.23 NA 57

Israel 12.32 18.39 54 55

Singapore 12.15 17.50 54 52

New Zealand 12.37 17.44 55 52

Korea, Republic of 9.42 14.20 42 42

Portugal 6.38 11.95 28 36

Slovakia 2.86 11.24 13 34

Czech Republic 3.24 11.21 14 33

Argentina 7.43 10.14 33 30

Estonia NA 9.83 NA 29

Hungary 3.05 8.62 13 26

Brazil 7.11 8.32 31 25

Taiwan 7.04 7.76 31 23

Poland 3.13 7.50 14 22

Mexico 3.30 5.38 15 16

Philippines 1.14 1.50 5 4 

NA=data not available.

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

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

costs in the United States
- 7 - 

 1997-2009 2008-2009

U.S. dollar 

change (1)

National 

currency 

change

Exchange 

rate 

change (2) 

U.S. dollar 

change (1)

National 

currency 

change

Exchange 

rate 

change (2) 

Japan 2.6 0.5 2.2 9.2 -1.0 10.4

United States 3.3 3.3 0.0 4.1 4.1 0.0 

Slovakia 12.1 8.1 3.8 3.3 6.0 -2.6

Argentina 2.6 14.5 -10.4 2.0 20.3 -15.3 

Switzerland 3.8 1.3 2.4 1.2 1.7 -0.5

Austria 4.8 3.0 1.8 0.5 6.2 -5.4 

Spain 5.9 4.1 1.7 0.4 6.1 -5.4

Ireland 7.1 5.7 1.3 -0.9 4.7 -5.4 

Denmark 6.0 4.2 1.8 -1.0 4.2 -5.0

Greece NA NA 0.9 -1.8 3.8 -5.4 

Brazil 1.3 6.7 -5.0 -1.9 7.0 -8.3

Finland 5.8 4.1 1.7 -2.0 3.5 -5.4 

Italy 4.9 3.1 1.7 -2.2 3.3 -5.4

Portugal 5.4 3.6 1.7 -2.4 3.2 -5.4 

Netherlands 5.3 3.5 1.8 -2.7 2.8 -5.4

Belgium 4.8 2.9 1.8 -2.8 2.7 -5.4 

Philippines 2.4 6.6 -3.9 -3.1 4.3 -7.0

Germany 3.9 2.1 1.8 -3.5 1.9 -5.4 

Estonia NA NA NA -5.0 0.0 -5.0

France 4.0 2.2 1.8 -5.1 0.3 -5.4 

Israel 3.4 4.5 -1.1 -5.8 3.3 -8.8

Australia 5.1 4.5 0.5 -6.2 1.0 -7.2 

Singapore 3.1 2.9 0.2 -7.2 -4.5 -2.8

Norway 5.9 4.9 1.0 -7.4 3.3 -10.4 

Czech Republic 10.9 6.5 4.2 -8.1 4.3 -11.9

New Zealand 2.9 3.4 -0.5 -8.8 2.6 -11.1 

Canada 3.8 2.2 1.6 -9.5 -3.1 -6.6

Sweden 3.9 3.9 0.0 -9.6 5.1 -14.0 

Taiwan 0.8 2.0 -1.1 -10.7 -6.4 -4.5

Hungary 9.0 9.8 -0.7 -11.8 3.7 -14.9 

Mexico 4.2 8.9 -4.4 -12.0 6.6 -17.5

Korea, Republic of 3.5 6.1 -2.4 -12.7 1.3 -13.8 

United Kingdom 4.5 4.8 -0.4 -13.9 1.9 -15.6

Poland 7.6 7.1 0.4 -20.1 3.5 -22.8

NA=data not available.

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

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

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

exchange rates
- 8 - 

 

 Hourly Compensation Costs

 Social 

Insurance(1)

Total Direct Pay

 Total Directly-Paid

Benefits(2)

Pay for Time 

Worked(3)

Norway 53.89 9.91 43.97(4)

Denmark 49.56 5.04 8.99 35.53

Belgium 49.40 14.72 9.68 25.00

Austria 48.04 12.16 10.17 25.72

Germany 46.52 10.37 9.24 26.90

Switzerland 44.29 6.57 8.97 28.75

Finland 43.77 9.45 8.69 25.62

Netherlands 43.50 10.05 8.36 25.09

France 40.08 12.51 4.99 22.58

Sweden 39.87 12.69 4.22 22.96

Ireland 39.02 5.96 5.36 27.70

Italy 34.97 10.63 5.15 19.19

Australia 34.62 7.13 3.27 24.22

United States 33.53 7.90 2.60 23.03

United Kingdom 30.78 6.46 3.18 21.14

Japan 30.36 5.42 7.56 17.39

Canada 29.60 5.99 2.92 20.69

Spain 27.74 7.29 5.47 14.99

Greece 19.23 5.31 3.54 10.38

Israel 18.39 2.98 1.39 14.02

Singapore 17.50 2.45 3.41 11.65

New Zealand 17.44 0.52 2.40 14.52

Korea, Republic of 14.20 2.52 11.68(4)

Portugal 11.95 2.41 2.09 7.44

Slovakia 11.24 3.22 1.93 6.10

Czech Republic 11.21 3.06 1.50 6.64

Argentina 10.14 1.77 1.42 6.96

Estonia 9.83 2.58 0.88 6.36

Hungary 8.62 2.24 1.58 4.81

Brazil 8.32 2.70 1.18 4.45

Taiwan 7.76 1.14 6.61(4)

Poland 7.50 1.18 1.77 4.55

Mexico 5.38 1.45 3.93(4)

Philippines 1.50 0.13 0.25 1.13

(1) Social insurance includes labor-related taxes net of subsidies.

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

(3) Pay for time worked is wages and salaries for time actually worked.

(4) Data relate to total direct pay.

Table 3. Components of hourly compensation costs in manufacturing, U.S. dollars, 2009
- 9 - 

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 differ 

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 release. For more detailed information, see 

http://www.bls.gov/ilc/#compensation. 

Definitions. Hourly compensation costs include (1) total hourly direct pay (all payments made directly to the 

worker, before payroll deductions of any kind) (2) social insurance expenditures (employer payments to secure 

entitlement to social benefits for employees) and (3) labor-related taxes. 

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. 

Hourly Compensation Costs 

Total Hourly 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 

• Allowances for family 

events, commuting, etc. 

• Payments in kind 

• Severance pay explicitly 

not linked to a collective 

agreement

• Retirement and disability pensions 

• Health insurance 

• Income guarantee insurance and sick 

leave

• Life and accident insurance

• Occupational injury and illness 

compensation 

• Unemployment insurance 

• Severance pay linked to a collective 

agreement

• Other social insurance expenditures

• Taxes (net of 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 

economies 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.
- 10 - 

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

compensation are typically obtained from periodic labor cost surveys, censuses of manufacturers, employer 

confederations, and other sources. 

For the United States, the results and methods used differ somewhat from those used for other BLS series on 

U.S. compensation costs. 

The statistics are adjusted, where possible, 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. More information on exceptions to these methods, as well as data sources used, can be found in 

“Country Notes and Sources” located at http://www.bls.gov/ilc/#compensation. 

Data availability. Detailed time series with data for all years from 1996 can be found at 

http://www.bls.gov/web/ichcc.supp.toc.htm. 

The compensation measures in this news release are based on statistics available to BLS as of December 2010. 

These measures may be subsequently revised as data are collected to update compensation measures for submanufacturing industries. Data for sub-manufacturing industries are available at 

http://www.bls.gov/ilc/flshcaeindnaics.htm.