For release 10:00 a.m. (EST) Wednesday, December 19, 2012 USDL-12-2460

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INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS

IN MANUFACTURING, 2011 

In comparison with 33 foreign countries covered, U.S. manufacturing hourly compensation costs in 2011 

ranked approximately in the middle at $35.53, the U.S. Bureau of Labor Statistics reported today (see chart 1). 

In addition to Australia, Canada, Italy, and Japan, 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 2011, 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. 

 

 

30.77

35.53

35.71

36.17

36.56

39.83

42.12

42.26

43.16

44.14

46.29

47.38

49.12

51.67

54.77

60.40

64.15

0 20 40 60

United Kingdom

United States

Japan

Italy

Canada

Ireland

France

Netherlands

Austria

Finland

Australia

Germany

Sweden

Denmark

Belgium

Switzerland

Norway

2.01

6.48

8.83

9.17

9.34

10.39

11.65

11.77

12.91

13.13

15.91

18.91

21.42

21.78

22.60

23.38

28.44

0 20 40 60

Philippines

Mexico

Poland

Hungary

Taiwan

Estonia

Brazil

Slovakia

Portugal

Czech Republic

Argentina

Korea, Republic of

Israel

Greece

Singapore

New Zealand

Spain

Chart 1. Hourly compensation costs in manufacturing, U.S. dollars, 2011

United States

U.S. Dollars U.S. Dollars
- 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 2011, most countries had increases in hourly compensation costs 

in national currency combined with larger appreciations in national currency relative to the U.S. dollar, resulting 

in increases in U.S. dollar-denominated hourly compensation costs. Only Greece experienced a decrease in U.S. 

dollar hourly compensation costs.

-30 -20 -10 0 10 20 30

Greece

United States

Ireland

Mexico

Canada

United Kingdom

Poland

Korea, Republic of

Spain

Netherlands

Philippines

Finland

France

Italy

Denmark

Austria

Belgium

Germany

Portugal

Hungary

Israel

Slovakia

Estonia

Taiwan

Norway

Japan

Sweden

Czech Republic

New Zealand

Brazil

Australia

Switzerland

Singapore

Argentina

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

-30 -20 -10 0 10 20 30

Greece

United States

Ireland

Mexico

Canada

United Kingdom

Poland

Korea, Republic of

Spain

Netherlands

Philippines

Finland

France

Italy

Denmark

Austria

Belgium

Germany

Portugal

Hungary

Israel

Slovakia

Estonia

Taiwan

Norway

Japan

Sweden

Czech Republic

New Zealand

Brazil

Australia

Switzerland

Singapore

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, 2010-2011

United States United States

Percent Percent
- 3 - 

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

New Zealand

Philippines

Denmark

Poland

Taiwan

Switzerland

United Kingdom

Ireland

Singapore

Israel

Norway

Argentina

Japan

Korea, Republic of

Portugal

Australia

Canada

Finland

Netherlands

Germany

Greece

Hungary

United States

Spain

Austria

Estonia

Slovakia

Czech Republic

Italy

France

Mexico

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, 2011

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

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.) 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. 

Find additional data. 

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

2011 are available at www.bls.gov/web/ichcc.supp.toc.htm. 

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

www.bls.gov/ilc/ichccindustry.htm. Data tables are available by country and industry. 

Go to www.bls.gov/ilc/#compensation 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.

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 

ILCPR@bls.gov with “subscribe” in the subject line. 
- 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 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. 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 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 release. 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 

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 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 news release are based on statistics available to BLS as of October 2012. 
- 8 - 

 

Hourly Compensation Costs

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

 1997(1) 2011 1997(1) 2011

Norway 25.84 64.15 112 181

Switzerland 30.42 60.40 132 170

Belgium 28.92 54.77 125 154

Denmark 23.70 51.67 103 145

Sweden 25.02 49.12 109 138

Germany 29.16 47.38 127 133

Australia 18.93 46.29 82 130

Finland 22.36 44.14 97 124

Austria 24.91 43.16 108 121

Netherlands 22.45 42.26 97 119

France 24.86 42.12 108 119

Ireland 16.69 39.83 72 112

Canada 18.49 36.56 80 103

Italy 19.76 36.17 86 102

Japan 21.99 35.71 95 101

United States 23.04 35.53 100 100

United Kingdom 19.30 30.77 84 87

Spain 13.95 28.44 61 80

New Zealand 12.06 23.38 52 66

Singapore 12.15 22.60 53 64

Greece 11.61 21.78 50 61

Israel 12.28 21.42 53 60

Korea, Republic of 9.22 18.91 40 53

Argentina 7.55 15.91 33 45

Czech Republic 3.25 13.13 14 37

Portugal 6.45 12.91 28 36

Slovakia 2.84 11.77 12 33

Brazil 7.07 11.65 31 33

Estonia NA 10.39 NA 29

Taiwan 7.04 9.34 31 26

Hungary 3.05 9.17 13 26

Poland 3.15 8.83 14 25

Mexico 3.47 6.48 15 18

Philippines 1.28 2.01 6 6

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 - 

1997-2011 2010-2011 

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 16.7 -9.6 5.5 31.4 -5.2 24.5

Singapore 3.3 1.2 4.5 9.1 8.5 18.3

Switzerland 1.4 3.6 5.0 0.4 17.7 18.2

Australia 4.1 2.4 6.6 3.9 12.3 16.7

Brazil 6.9 -3.1 3.6 9.8 5.2 15.6

New Zealand 3.5 1.3 4.8 4.3 9.8 14.5

Czech Republic 6.0 4.3 10.5 4.9 7.9 13.2

Sweden 3.7 1.2 4.9 1.7 11.1 13.0

Japan 0.5 3.0 3.5 2.1 10.1 12.5

Norway 4.9 1.7 6.7 4.1 7.9 12.3

Taiwan 2.2 -0.1 2.0 4.1 7.2 11.6

Estonia NA NA NA 5.0 5.1 10.4

Slovakia 7.3 3.2 10.7 4.5 5.1 9.8

Israel 4.3 -0.3 4.1 4.6 4.5 9.3

Hungary 8.7 -0.5 8.2 5.6 3.4 9.2

Portugal 3.6 1.4 5.1 3.4 5.1 8.6

Germany 2.0 1.5 3.5 2.9 5.1 8.1

Belgium 3.1 1.5 4.7 2.8 5.1 8.0

Austria 2.4 1.5 4.0 2.7 5.1 7.9

Denmark 4.1 1.5 5.7 2.6 5.1 7.8

Italy 2.9 1.5 4.4 2.5 5.1 7.7

France 2.3 1.5 3.8 2.5 5.1 7.6

Finland 3.5 1.4 5.0 2.2 5.1 7.4

Philippines 6.1 -2.7 3.3 2.9 4.1 7.2

Netherlands 3.1 1.5 4.6 1.7 5.1 6.9

Spain 3.7 1.5 5.2 1.5 5.1 6.7 

Korea, Republic of 6.4 -1.1 5.3 2.2 4.4 6.7

Poland 6.9 0.7 7.6 4.5 1.8 6.4

United Kingdom 3.5 -0.1 3.4 1.8 3.8 5.7

Canada 2.5 2.4 5.0 1.5 4.2 5.7

Mexico 8.0 -3.2 4.6 3.9 1.6 5.6

Ireland 5.3 1.1 6.4 -1.0 5.1 4.0

United States 3.1 0.0 3.1 2.1 0.0 2.1

Greece 3.8 0.8 4.6 -7.3 5.1 -2.6

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 64.15 10.98 53.18(4)

Switzerland 60.40 9.25 11.24 39.92

Belgium 54.77 17.64 11.05 26.07

Denmark 51.67 4.97 7.54 39.15

Sweden 49.12 16.18 5.13 27.82

Germany 47.38 10.24 9.44 27.70

Australia 46.29 9.25 4.41 32.63

Finland 44.14 9.20 8.51 26.43

Austria 43.16 11.07 9.26 22.82

Netherlands 42.26 8.97 9.01 24.29

France 42.12 12.61 7.80 21.70

Ireland 39.83 6.39 6.00 27.43

Canada 36.56 7.49 3.59 25.48

Italy 36.17 10.47 5.27 20.43

Japan 35.71 6.46 9.02 20.23

United States 35.53 8.65 3.17 23.70

United Kingdom 30.77 4.73 4.05 21.98

Spain 28.44 7.22 5.57 15.65

New Zealand 23.38 0.99 2.69 19.70

Singapore 22.60 3.64 3.95 15.00

Greece 21.78 5.03 4.08 12.66

Israel 21.42 3.49 1.50 16.42

Korea, Republic of 18.91 3.70 15.21(4)

Argentina 15.91 2.77 2.23 10.92

Czech Republic 13.13 3.59 1.77 7.77

Portugal 12.91 2.54 2.49 7.88

Slovakia 11.77 3.19 2.20 6.38

Brazil 11.65 3.72 1.66 6.27

Estonia 10.39 2.69 0.98 6.73

Taiwan 9.34 1.35 8.00(4)

Hungary 9.17 2.16 1.81 5.20

Poland 8.83 1.25 2.23 5.35

Mexico 6.48 1.95 4.53(4)

Philippines 2.01 0.17 0.35 1.49

(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 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, 2011