For release 10:00 a.m. (EST) Wednesday, December 21, 2011 USDL-11-1778

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INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS

IN MANUFACTURING, 2010

Manufacturing hourly compensation costs in the United States in 2010 were lower than in several northern and 

western European countries, Australia, and Canada, but higher than in the United Kingdom and 19 countries in 

southern and eastern Europe, Asia, and South America, the U.S. Bureau of Labor Statistics reported today (see 

chart 1). U.S. hourly compensation costs rose about 2 percent from the previous year to $34.74 (see table 2). 

From 1997 to 2010, U.S. compensation cost competitiveness in manufacturing improved relative to all but five 

countries covered: Brazil, Germany, Japan, the Philippines, and Taiwan (see table 1).

 

 

29.44

31.99

33.41

34.74

35.67

36.30

40.55

40.60

40.92

41.07

42.30

43.76

43.81

45.48

50.70

53.20

57.53

0 20 40 60

United Kingdom

Japan

Italy

United States

Canada

Ireland

France

Australia

Netherlands

Austria

Finland

Germany

Sweden

Denmark

Belgium

Switzerland

Norway

1.90

6.23

8.01

8.36

8.40

9.47

10.08

10.72

11.50

11.72

12.66

16.62

19.10

20.12

20.57

22.19

26.60

0 20 40 60

Philippines

Mexico

Poland

Taiwan

Hungary

Estonia

Brazil

Slovakia

Czech Republic

Portugal

Argentina

Korea, Republic of

Singapore

Israel

New Zealand

Greece

Spain

Chart 1. Hourly compensation costs in manufacturing, U.S. dollars, 2010

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 2010, many European countries had modest increases or declines 

in hourly compensation costs in national currency combined with larger depreciations in national currency 

relative to the U.S. dollar, resulting in declines in U.S. dollar-denominated hourly compensation costs. In 

contrast, all countries outside Europe saw increases in U.S. dollar hourly compensation costs much higher than 

in the United States.

-30 -20 -10 0 10 20 30

Austria

Estonia

Germany

Slovakia

Ireland

Spain

Netherlands

Finland

Belgium

Portugal

France

Hungary

Denmark

Italy

Greece

United Kingdom

Czech Republic

Switzerland

United States

Japan

Poland

Taiwan

Sweden

Norway

Singapore

Israel

Mexico

Philippines

Korea, Republic of

New Zealand

Canada

Australia

Brazil

Argentina

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

-30 -20 -10 0 10 20 30

Austria

Estonia

Germany

Slovakia

Ireland

Spain

Netherlands

Finland

Belgium

Portugal

France

Hungary

Denmark

Italy

Greece

United Kingdom

Czech Republic

Switzerland

United States

Japan

Poland

Taiwan

Sweden

Norway

Singapore

Israel

Mexico

Philippines

Korea, Republic of

New Zealand

Canada

Australia

Brazil

Argentina

Percent change in hourly compensation (National currency)

Percent 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, 2009-2010

United States United States
- 3 - 

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

New Zealand

Denmark

Philippines

Ireland

Taiwan

United Kingdom

Switzerland

Poland

Singapore

Israel

Norway

Argentina

Japan

Korea, Republic of

Portugal

Australia

Netherlands

Finland

Germany

Canada

Greece

Hungary

United States

Austria

Spain

Estonia

Czech Republic

Slovakia

Italy

Mexico

France

Brazil

Belgium

Sweden

Percent

Social insurance expenditures Directly-paid benefits 2

Chart 3. Benefit components of hourly compensation costs as a percent of total compensation, 2010

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

1

3

3

3

3

United States
- 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.) Economies 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, 

Belgium, and Brazil, 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, 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 15 countries. In contrast, the ratio of benefit costs in the United 

States is about 33 percent. 

Analyze trends with interactive dashboard. 

The Excel version of the data tables includes an interactive dashboard that displays charts from a custom selection of 

variables, countries, and time periods at www.bls.gov/ilc/#compensation.

Find additional data. 

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

2010 are available at www.bls.gov/ilc/#compensation. 

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 

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3
- 5 - 

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 Data are available for China through 2008 and for India through 2007. 

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. 

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. 4

 

(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, March 2011, pp. 39-52, at www.bls.gov/opub/mlr/2011/03/art4full.pdf.

(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, 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 and India, see www.bls.gov/ilc/china.htm and 

www.bls.gov/ilc/india.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

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

NA
- 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 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 

www.bls.gov/ilc/#compensation. 

Definitions. Compensation costs include (1) 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 (net of 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 (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.

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

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

confederations, and other sources. 
- 7 - 

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. More information on exceptions to 

these methods, as well as data sources used, can be found in “Country Notes and Data Sources” located at 

www.bls.gov/ilc/#compensation. 

Additional data. Detailed time series tables of compensation costs in U.S. dollars, national currencies, and annual 

indexes for 1996-2010 are available at www.bls.gov/web/ichcc.supp.toc.htm.

The compensation measures in this news release are based on statistics available to BLS as of October 2011. 

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 

www.bls.gov/ilc/flshcaeindnaics.htm. 
- 8 - 

 

Hourly Compensation Costs

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

 1997(1) 2010 1997(1) 2010

Norway 26.38 57.53 114 166

Switzerland 30.00 53.20 130 153

Belgium 29.12 50.70 126 146

Denmark 24.09 45.48 105 131

Sweden 24.97 43.81 108 126

Germany 29.15 43.76 126 126

Finland 22.35 42.30 97 122

Austria 25.52 41.07 111 118

Netherlands 23.40 40.92 102 118

Australia 19.10 40.60 83 117

France 24.88 40.55 108 117

Ireland 17.03 36.30 74 104

Canada 18.84 35.67 82 103

United States 23.05 34.74 100 100

Italy 19.67 33.41 85 96

Japan 22.28 31.99 97 92

United Kingdom 18.50 29.44 80 85

Spain 13.92 26.60 60 77

Greece 11.56 22.19 50 64

New Zealand 12.37 20.57 54 59

Israel 12.32 20.12 53 58

Singapore 12.15 19.10 53 55

Korea, Republic of 9.36 16.62 41 48

Argentina 7.43 12.66 32 36

Portugal 6.38 11.72 28 34

Czech Republic 3.24 11.50 14 33

Slovakia 2.86 10.72 12 31

Brazil 7.07 10.08 31 29

Estonia NA 9.47 NA 27

Hungary 3.05 8.40 13 24

Taiwan 7.04 8.36 31 24

Poland 3.13 8.01 14 23

Mexico 3.47 6.23 15 18

Philippines 1.28 1.90 6 5

NA=data not available.

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

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

costs in the United States
- 9 - 

 1997-2010 2009-2010

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 15.7 -9.9 4.2 31.0 -4.8 24.8 

Brazil 6.7 -3.7 2.8 9.2 13.5 23.9 

Australia 4.3 1.6 6.0 2.1 16.1 18.5 

Canada 2.7 2.3 5.0 5.7 10.8 17.1 

New Zealand 3.3 0.7 4.0 2.7 13.5 16.5 

Korea, Republic of 6.1 -1.5 4.5 3.8 10.3 14.5 

Philippines 6.5 -3.2 3.1 4.8 5.7 10.8 

Mexico 8.4 -3.5 4.6 2.3 6.9 9.4

Israel 4.5 -0.6 3.8 3.9 5.2 9.3

Singapore 2.9 0.7 3.5 2.0 6.7 8.9

Norway 4.9 1.2 6.2 4.3 4.1 8.6

Sweden 3.9 0.5 4.4 1.3 6.2 7.7

Taiwan 2.0 -0.7 1.3 2.6 4.8 7.5

Poland 6.8 0.6 7.5 3.3 3.5 6.9

Japan 0.3 2.5 2.8 -1.3 6.7 5.4

United States 3.2 0.0 3.2 1.9 0.0 1.9

Switzerland 1.9 2.6 4.5 -2.3 4.1 1.7

Czech Republic 6.0 4.0 10.2 1.1 -0.2 0.9 

United Kingdom 4.1 -0.4 3.6 1.2 -1.3 -0.1 

Greece 4.7 0.5 5.1 3.4 -4.8 -1.6 

Italy 2.9 1.2 4.2 2.8 -4.8 -2.2 

Denmark 3.7 1.2 5.0 2.7 -4.8 -2.2 

Hungary 9.0 -0.8 8.1 0.0 -2.7 -2.7 

France 2.5 1.3 3.8 1.8 -4.8 -3.1 

Portugal 3.6 1.2 4.8 1.6 -4.8 -3.4 

Belgium 3.1 1.3 4.4 1.3 -4.8 -3.6 

Finland 3.9 1.1 5.0 1.2 -4.8 -3.7 

Netherlands 3.1 1.2 4.4 1.2 -4.8 -3.7 

Spain 3.9 1.2 5.1 0.6 -4.8 -4.3 

Ireland 5.1 0.8 6.0 0.3 -4.8 -4.6 

Slovakia 7.4 3.1 10.7 0.2 -4.8 -4.6 

Germany 1.9 1.3 3.2 0.2 -4.8 -4.6 

Estonia NA NA NA -0.9 -4.7 -5.5 

Austria 2.4 1.3 3.7 -1.9 -4.8 -6.6 

NA=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.

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 Directly-Paid

Benefits(2)

Pay for Time 

Worked(3)

Norway 57.53 9.88 47.65(4)

Switzerland 53.20 8.22 10.69 34.29

Belgium 50.70 16.39 10.29 24.01

Denmark 45.48 3.07 7.62 34.78

Sweden 43.81 14.47 4.56 24.78

Germany 43.76 9.52 8.43 25.80

Finland 42.30 9.18 8.06 25.05

Austria 41.07 10.56 8.84 21.67

Netherlands 40.92 8.68 8.74 23.49

Australia 40.60 8.20 3.85 28.55

France 40.55 12.95 6.55 21.06

Ireland 36.30 4.37 5.63 26.29

Canada 35.67 8.03 3.42 24.23

United States 34.74 8.47 2.95 23.32

Italy 33.41 9.57 4.88 18.96

Japan 31.99 5.71 7.97 18.32

United Kingdom 29.44 4.39 3.89 21.16

Spain 26.60 6.89 5.17 14.53

Greece 22.19 5.01 4.17 13.01

New Zealand 20.57 0.66 2.62 17.29

Israel 20.12 3.36 1.48 15.28

Singapore 19.10 3.08 3.34 12.68

Korea, Republic of 16.62 3.27 13.36(4)

Argentina 12.66 2.20 1.77 8.68

Portugal 11.72 2.30 2.26 7.16

Czech Republic 11.50 3.14 1.54 6.81

Slovakia 10.72 2.95 1.75 6.03

Brazil 10.08 3.24 1.43 5.41

Estonia 9.47 2.50 0.88 6.10

Hungary 8.40 2.00 1.65 4.74

Taiwan 8.36 1.23 7.13(4)

Poland 8.01 1.26 1.89 4.86

Mexico 6.23 1.94 4.30(4)

Philippines 1.90 0.18 0.31 1.41

(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) Separate measures of directly-paid benefits and pay for time worked are not available. Data relate to total direct pay.

Table 3. Components of hourly compensation costs in manufacturing, U.S. dollars, 2010