Internet address:  http://www.bls.gov/fls               USDL: 04-2343   	
Technical information:  (202) 691-5654 	                For Release: 10:00 A.M. EST
Media contact: (202) 691-5902	                        Thursday, November 18, 2004


INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 2003

     Average hourly compensation costs in U.S. dollars for production workers in manufacturing 
in 30 foreign economies climbed to 75 percent of the U.S. level in 2003, up from 67 percent of 
the U.S. level in the previous year, according to data issued by the Bureau of Labor Statistics, 
U.S. Department of Labor.  Overall compensation costs relative to the United States increased in 
nearly all countries in 2003, with sharply rising costs in Europe contributing the most to the 
rising costs. European costs moved above U.S. costs for the first time since 1999. (See table 1.)  
Data for the Czech Republic, a relatively low labor cost country, are included in this release for 
the first time. 

     In the United States, hourly compensation costs for production workers in manufacturing 
increased 4.1 percent in 2003, to $21.97.  Average costs in the United States were higher than 
those in all the economies covered outside Europe, but 10 of the European countries had higher 
hourly compensation costs than did the United States, in a few cases more than 40 percent 
higher.  Trade-weighted average costs increased 3.6 percent in the combined 30 foreign 
economies in 2003, when measured in national currency terms. This was less than the increase in 
the United States, but the value of foreign currencies rose 8.1 percent against the U.S. dollar, 
resulting in a rise in hourly compensation costs in the foreign economies of 11.9 percent on a 
U.S. dollar basis.  (See chart 1 and table A.)
 
Chart 1.  Hourly compensation costs in U.S. dollars for
	  production workers in manufacturing, 1975-2003

PRINTED COPY CONTAINS CHART AT THIS POINT.


Compensation costs expressed in U.S. dollars

     Compensation costs for production workers in manufacturing, measured in U.S. dollars, 
continued to rise strongly in 2003 in most of the foreign economies, with increases of more than 
20 percent in Australia, New Zealand, and most of the European countries.  Only three 
economies -- Hong Kong SAR, Mexico, and Taiwan -- recorded slower rates of growth than the 
United States.    As a result, the rate of compensation increase in a trade-weighted average of the 
foreign economies was 11.9 percent, the largest one year increase since 1990. (See table A.)

     Changes over time in compensation costs in U.S. dollars are affected by the underlying 
national wage and benefit trends measured in national currencies, as well as frequent and 
sometimes sharp changes in currency exchange rates.  A country's compensation costs expressed 
in U.S. dollars are calculated by dividing compensation costs in national currency by the 
exchange rate (expressed as national currency units per U.S. dollar).


BOX: A NOTE ON THE MEASURES

     The hourly compensation measures in this news release are based on statistics available to BLS as of 
September 2004.  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. 

     This is the first release of hourly compensation comparisons on a North American Industry Classification 
System (NAICS) basis.  NAICS is a common industrial classification used by the United States, Canada, 
and Mexico.  Previous versions of this release classified industries on a Standard Industrial 
Classification (SIC) basis, the industrial classification used by the United States before NAICS.  The 
historical series on an SIC basis is available at http://www.bls.gov/fls, updated through May 2004.

     As a result of the switch to the new classification system, data for nearly all economies were revised.
For most economies, the adjustments were minor; hourly compensation cost levels did not change more than 
about one and one-half percent.  For Hong Kong, the switch to NAICS had a somewhat larger effect for recent 
years, resulting in costs that are two to four percent lower on a NAICS basis than on an SIC basis.  
No adjustment was possible for Australia or Sri Lanka.  For further information on NAICS, see the 
"Industrial classification" section of the Technical Notes.

     Total compensation costs include pay for time worked, other direct pay (including holiday and 
vacation pay, bonuses, other direct payments, and the cost of payments in kind), employer expenditures 
for legally required insurance programs and contractual and private benefit plans, and, for some 
countries, other labor taxes.

     Labor cost measures.  The compensation measures are computed in national currency units and are 
converted into U.S. dollars at prevailing commercial market currency exchange rates.  They are 
appropriate measures for comparing levels of employer labor costs, but they do not indicate relative 
living standards of workers or the purchasing power of their incomes.  Prices of goods and services vary 
greatly among countries, and commercial market exchange rates do not reliably indicate relative differences 
in prices.

     Data limitations.  Hourly compensation is partly estimated, and data are subject to revision in the next 
update.  The comparative level figures are averages for all manufacturing industries and are not necessarily 
representative of all component industries.

     See the Technical Notes for further information regarding definitions, sources, and computation methods, 
as well as a description of the trade-weighted measures for economic groups.

     
END OF BOX (A NOTE ON THE MEASURES)


Table A. Hourly compensation costs, in national currency and in U.S. dollars, for production workers in 
manufacturing and exchange rates (U.S. dollars per national currency unit)

Percent change, 2002-2003




                          Hourly                 Hourly
Country                compensation,          compensation,
or area                  national    Exchange     U.S.
                         currency     Rates     dollars
        
Americas        
  United States             4.1          -        4.1
  Brazil                   11.0       -5.0        5.4
  Canada                    3.1       12.1       15.6
  Mexico                    6.2      -10.5       -4.9
               
Asia and Oceania
  Australia                 8.0       19.9       29.4
  Hong Kong SAR 1          -2.3         .2       -2.1
  Israel                    2.4        4.0        6.5
  Japan                      .6        8.0        8.6
  Korea                     9.0        4.9       14.3
  New Zealand               2.5       25.8       29.0
  Singapore                 4.4        2.9        7.4
  Sri Lanka                   -          -          -
  Taiwan                    1.7         .4        2.1
           
Europe
  Austria                   2.5       19.7       22.7
  Belgium                   1.9       19.7       22.0
  Czech Republic            6.1       16.1       23.1
  Denmark                   4.8       19.9       25.6
  Finland                   4.2       19.7       24.7
  France                    3.1       19.7       23.4
  Germany                   2.7       19.7       22.9
  Greece                      -          -          -
  Ireland                   4.5       19.7       25.0
  Italy                     2.4       19.7       22.6
  Luxembourg                3.2       19.7       23.5
  Netherlands               3.7       19.7       24.1
  Norway                    2.5       12.7       15.6
  Portugal                  2.8       19.7       23.0
  Spain                     4.8       19.7       25.5
  Sweden                    3.5       20.3       24.5
  Switzerland               1.0       15.8       16.9
  United Kingdom            4.6        8.8       13.8
           
Trade-weighted measures 2,3   
  All 30 foreign economies  3.6        8.1       11.9
  OECD 4                    3.6        9.1       13.0
  Europe                    3.3       17.1       21.0
  Asian NIEs                4.1        2.3        6.6


1  Hong Kong Special Administrative Region of China.
2  Because data for Germany are not available before 1993, data for only the former West
   Germany are included in the trade-weighted measures.
3  The 2002-2003 percent changes for the trade-weighted measures are based upon the 
   changes for the countries or areas for which 2003 data are available.    
4  OECD refers to the Organization for Economic Cooperation and Development.


     
     The strength of the European currencies in 2003 drove costs in U.S. dollars up more than 20 
percent, even though European compensation costs on a national currency basis increased at a 
slower pace than those in the United States.  Costs in the countries which use the euro as a currency 
rose the most, 22 percent or more, while costs in several of the European countries that do not use 
the euro (Norway, Switzerland, and the United Kingdom) rose in the 13 to 17 percent range.    The 
upward trend in costs in Europe marked the second consecutive year in which European costs rose 
strongly, reversing a 1996-2001 trend in which European costs had been declining on a U.S. dollar 
basis.  Costs in Europe, on average, are now more than $2 higher on a per hour basis than in the 
United States.  Among the European countries covered, the Czech Republic had the lowest level of 
hourly compensation costs at $4.71.  Compensation costs were almost seven times that level in 
Denmark ($32.18), the highest labor cost country in these comparisons. (See table 2.)
     
     Compensation in U.S. dollars in most Asian economies in 2003 also grew at a faster rate than in 
recent years, but the increases were more modest than those in Europe.  Costs in the Asian NIEs 
were up 6.6 percent, led by a 14.3 percent increase in Korea.  Japanese compensation costs grew 8.6 
percent in 2003, following two years of decline.  Among Asian economies, only in Hong Kong did 
costs fail to rise in 2003.  These increases contrasted with 2002, when costs in U.S. dollars in each 
of the NIEs except Korea declined.  The two Oceania countries, Australia and New Zealand, 
experienced the largest increases in compensation costs in 2003, both near the 29 percent mark, the 
biggest increases in those countries since this comparative series began in 1975.

     Compensation costs in U.S. dollars in Canada also grew at historically fast rates, rising 15.6 
percent, the first time in 12 years that Canadian costs have grown at an appreciably faster rate than 
U.S. costs.  In contrast, Mexican costs dropped 4.9 percent, more than any other country included in 
this report.  The drop was associated with a weakening peso and an increase in compensation costs 
on a national currency basis that was lower than historical averages.  

     With the fast growth in hourly compensation costs in Europe, the average for the 18 European 
countries in 2003 rose to more than $24 per hour.  Ten European countries had higher compensation 
costs than the United States, with two countries -- Denmark and Norway -- having costs above $30. 
Costs in Germany nearly reached the $30 level. (See table 2.)
     
	
     
Chart 2. Indexes of hourly compensation costs in U.S. dollars
         for production workers in manufacturing, 2003

PRINTED COPY CONTAINS CHART AT THIS POINT.
        

 
Compensation costs expressed in national currencies

	For the foreign economies, compensation costs for production workers in manufacturing in 
national currency in 2003 grew 3.6 percent, about the same rate as in 2002.  Compensation costs 
grew more slowly in 2002 and 2003 than in any other year since this series began in 1975.  
Compensation cost growth more than doubled in the Asian NIEs from 2002 to 2003, but this was 
offset by slowing rates of growth in Mexico and Canada, which together comprise one-third of the 
trade-weighted compensation cost average. Growth rates in Europe did not change much from 2002. 
(See table 4.)

	Compensation costs in 2003 rose in all the Asian economies except Hong Kong SAR. 
Compensation costs in Japan rose for the first time in 3 years, and costs in Singapore and Taiwan 
increased as well, by 4.4 and 1.7 percent, respectively.  Korea had the highest increase in 
compensation costs among the Asian NIEs, with costs rising 9.0 percent. Overall, costs in the NIEs 
grew 4.1 percent in 2003.

     The pace of growth in compensation costs in the North American competitors, Canada and 
Mexico, slowed in 2003.  The rate of increase in compensation costs in Canada fell one percentage 
point in 2003, to 3.1 percent.  Mexican costs grew at a rate that was one percentage point slower as 
well. 

     Compensation costs in Europe, on average, grew at nearly the same rate in 2003 as in 2002, and 
the rate of growth did not change a great deal in most European countries.  Only in Ireland, Norway, 
and Portugal did the rate of growth change by more than one percentage point.  Among the 
European countries, the largest increase in compensation costs was in the Czech Republic, 6.1 
percent, while the smallest increase was in Switzerland, 1.0 percent.


Exchange rates

     The trade-weighted value of the currencies of the 30 foreign economies against the U.S. dollar 
increased 8.1 percent between 2002 and 2003.  This was the largest increase in trade-weighted 
currency values since this series began in 1975.  The currencies in many countries appreciated 
sharply in 2003, while only two currencies -- the Brazilian real and the Mexican peso -- depreciated 
against the dollar.  (See table 5.)

     In general, the European currencies appreciated the most in 2003, rising 17.1 percent.  The 
euro, which accounts for about 70 percent of the European trade-weighted average, rose by about 20 
percent, as did currencies in Denmark and Sweden.  Currencies in other European countries 
appreciated as well, but not as much as the euro.  The British pound (+8.8 percent) was the only 
European currency that failed to appreciate more than 10 percent.
	
     
BOX: CZECH REPUBLIC

     Beginning with this release, measures of hourly compensation costs for the Czech Republic are included.
Because of data limitations, the measures cover only the years 1995-2003.  The tabulation below shows 
hourly compensation costs for the Czech Republic on a national currency basis, a U.S. dollar basis, and 
as a percentage of the U.S. level.

Czech Republic: Hourly Compensation Costs for Production Workers in Manufacturing

                         
                        National      U.S.       
                        currency     dollar       Index
Year                     basis       basis    (United States 
                        (Koruna)     (US$)        = 100)

1995                     67.14        2.53          15 
1996                     79.92        2.94          17
1997                     88.50        2.79          15
1998                     96.49        2.99          16
1999                     101.4        2.93          16
2000                     109.4        2.83          15
2001                     119.0        3.13          15
2002                     125.3        3.83          18
2003                     132.9        4.71          21


END OF BOX (CZECH REPUBLIC)


     Currency appreciations in Asia were more modest than in Europe.  The value of the Japanese 
yen increased 8.0 percent, and currencies in the Asian NIEs appreciated 2.3 percent.  Currencies in 
Australia (+19.9 percent) and New Zealand (+25.8 percent), however, appreciated strongly against 
the dollar. 

     The movements of the foreign currencies relative to the U.S. dollar in 2003 had a significant 
influence on hourly compensation costs measured in U.S. dollars.  Hourly compensation costs on a 
national currency basis in the 30 foreign economies rose 3.6 percent, less than in the United States, 
but, when adjusted for an 8.1 percent appreciation of the foreign currencies against the U.S. dollar, 
those costs increased 11.9 percent, much higher than in the United States.  The effect that exchange 
rate changes can have on hourly compensation costs is particularly evident when comparing 
European labor costs with those of the Asian NIEs.  On a national currency basis, the increase in 
hourly compensation costs in the Asian NIEs was nearly a percentage point higher than the increase 
in Europe.   When adjusted for changes in exchange rates, however, costs on a U.S. dollar basis in 
Europe increased at a rate triple that of the Asian NIEs. 

Additional data available

     In addition to the compensation cost measures covered in this news release, supplementary 
tables are available for comparative levels of hourly compensation costs, hourly direct pay, pay for 
time worked, and the structure of compensation for production workers in manufacturing for all 
years from 1975 through 2003.  Data are also available for national currency hourly compensation 
and exchange rates from 1975 through 2003 in the supplementary tables (http://www.bls.gov/fls). 

     BLS also computes comparative measures for 39 component manufacturing industries.  Data 
for the component industries are not included in this release; in general, the data limitations for the 
component industries are greater than for total manufacturing.  Data are available upon request and 
via the Internet (http://www.bls.gov/fls).  The data for component industries are currently available 
on a Standard Industrial Classification (SIC) basis only, but will be converted to a North American 
Industry Classification System (NAICS) basis when they are updated to include 2003 data.  

     For further information, contact the Office of Productivity and Technology by phone at 202-
691-5654, by e-mail at flshc@bls.gov, or by mail at Bureau of Labor Statistics, 2 Massachusetts 
Avenue, NE, Room 2150, Washington, DC 20212.

     Information in this release will be made available to sensory impaired individuals upon request.  
Voice phone:  202-691-5200; TDD message referral phone:  1-800-877-8339.

     This material is in the public domain and, with appropriate credit, may be reproduced without 
permission.  It may be translated into foreign languages without permission, with a separate credit 
for the translation.
 
  
 
   Table 1. Indexes of hourly compensation costs for production workers in manufacturing,
   31 countries or areas and selected economic groups, selected years, 1975-2003


   Country or area                 1975    1980    1985    1990    1995    2000    2001    2002    2003


   Americas
   United States.............       100     100     100     100     100     100     100     100     100
   Brazil....................         -       -       -       -       -      18      14      12      12
   Canada....................        99      92      88     111      97      85      80      79      88
   Mexico....................        24      23      13      11       9      11      12      12      11

   Asia and Oceania
   Australia.................        91      88      65      89      91      74      66      73      91
   Hong Kong SAR (1).........        12      16      14      22      28      28      28      27      25
   Israel....................        33      35      29      52      56      59      60      52      53
   Japan.....................        48      57      49      85     138     112      95      88      91
   Korea.....................         5      10      10      25      43      42      38      43      47
   New Zealand...............        50      53      34      54      57      41      37      41      51
   Singapore.................        14      15      19      25      42      38      36      33      34
   Sri Lanka.................         5       2       2       2       3       2       2       2       -
   Taiwan....................         6      11      12      26      35      32      30      27      27

   Europe
   Austria...................        73      92      60     122     148      99      94      98     116
   Belgium...................       104     136      70     130     162     111     103     108     126
   Czech Republic............         -       -       -       -      15      15      15      18      21
   Denmark...................       101     112      64     125     149     117     115     121     146
   Finland...................        75      86      65     144     143     100      98     103     124
   France....................        73      92      59     104     113      79      77      81      96
   Germany, Former West......       102     126      74     148     184     122     116     121     142
   Germany...................         -       -       -       -     177     116     111     115     136
   Greece....................        27      39      29      45      53       -       -       -       -
   Ireland...................        50      63      47      80      81      66      67      73      87 

   Italy.....................        75      84      60     117      93      72      68      71      84
   Luxembourg................       101     120      59     109     137      90      85      89     105
   Netherlands...............       107     125      69     122     141      99      97     102     122
   Norway....................       112     123      82     148     146     116     115     129     144
   Portugal..................        25      21      12      24      30      23      23      24      28
   Spain.....................        41      61      36      77      75      55      53      56      68
   Sweden....................       116     129      76     141     126     104      91      96     115
   Switzerland...............        98     114      75     140     170     108     106     113     127
   United Kingdom............        55      78      49      86      81      86      81      85      93

   Trade-weighted measures (2,3)
   All 30 foreign economies..         -       -       -       -       -      73      68      67      75
    less Brazil, Czech
     Republic................        63      68      53      81      90      74      69      68      76
   OECD (4,5)................        68      74      57      88      96      78      72      73      81
   Europe (5)................        81     101      62     116     127      95      90      95     110
   European Union-15 (6).....        80     100      61     115     125      94      90      94     109
   Asian NIEs (7)............         8      12      13      25      38      36      33      33      34

   Dash means data not available.
   (1) Hong Kong special administrative region of China.
   (2) Because data for Germany are not available before 1993, data for the former West
       Germany only are included in the trade-weighted measures.
   (3) For description of trade-weighted measures and economic groups, see the Technical
       Notes preceding these tables.
   (4) Organization for Economic Cooperation and Development.
   (5) Data for the Czech Republic are not included for 1975-1994.
   (6) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (7) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2004.
 
  
 
   Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
   31 countries or areas and selected economic groups, selected years, 1975-2003


   Country or area                 1975    1980    1985    1990    1995    2000    2001    2002    2003


   Americas
   United States.............      6.16    9.63   12.71   14.72   17.02   19.46   20.29   21.11   21.97
   Brazil....................         -       -       -       -       -    3.50    2.94    2.53    2.67
   Canada....................      6.11    8.87   11.20   16.33   16.50   16.48   16.24   16.68   19.28
   Mexico....................      1.47    2.21    1.59    1.58    1.46    2.19    2.51    2.60    2.48

   Asia and Oceania
   Australia.................      5.62    8.47    8.21   13.14   15.42   14.48   13.31   15.50   20.05
   Hong Kong SAR (1).........      0.75    1.50    1.73    3.22    4.80    5.45    5.74    5.66    5.54
   Israel....................      2.03    3.41    3.66    7.71    9.50   11.49   12.26   11.01   11.73
   Japan.....................      2.97    5.46    6.27   12.54   23.55   21.89   19.25   18.49   20.09
   Korea.....................      0.32    0.95    1.23    3.69    7.26    8.23    7.69    9.00   10.28
   New Zealand...............      3.10    5.14    4.30    8.01    9.78    7.91    7.53    8.63   11.13
   Singapore.................      0.84    1.48    2.45    3.73    7.23    7.36    7.28    6.90    7.41
   Sri Lanka.................      0.28    0.22    0.28    0.35    0.48    0.48    0.45    0.49       -
   Taiwan....................      0.38    1.02    1.50    3.89    5.88    6.18    6.03    5.73    5.84

   Europe
   Austria...................      4.50    8.87    7.57   17.91   25.26   19.17   19.08   20.69   25.38
   Belgium...................      6.39   13.07    8.94   19.10   27.53   21.53   20.98   22.74   27.73
   Czech Republic............         -       -       -       -    2.53    2.83    3.13    3.83    4.71
   Denmark...................      6.24   10.77    8.10   18.35   25.43   22.76   23.26   25.62   32.18
   Finland...................      4.63    8.30    8.20   21.15   24.31   19.44   19.85   21.78   27.17
   France....................      4.50    8.90    7.48   15.36   19.26   15.46   15.65   17.12   21.13
   Germany, Former West......      6.26   12.16    9.46   21.71   31.40   23.66   23.55   25.44   31.25
   Germany...................         -       -       -       -   30.08   22.65   22.54   24.34   29.91
   Greece....................      1.69    3.72    3.65    6.69    8.94       -       -       -       -
   Ireland...................      3.06    6.03    6.00   11.78   13.77   12.76   13.64   15.31   19.14
   Italy.....................      4.64    8.09    7.56   17.28   15.91   14.05   13.81   14.97   18.35
   Luxembourg................      6.22   11.51    7.48   16.00   23.36   17.51   17.21   18.71   23.11
   Netherlands...............      6.58   12.05    8.73   17.98   24.03   19.33   19.65   21.62   26.84
   Norway....................      6.90   11.80   10.47   21.76   24.84   22.66   23.29   27.29   31.55
   Portugal..................      1.52    1.98    1.46    3.59    5.09    4.49    4.59    5.07    6.23
   Spain.....................      2.52    5.86    4.64   11.30   12.70   10.66   10.76   11.93   14.96
   Sweden....................      7.14   12.44    9.61   20.82   21.46   20.18   18.39   20.23   25.18
   Switzerland...............      6.03   10.96    9.55   20.63   28.99   21.02   21.60   23.84   27.87
   United Kingdom............      3.39    7.52    6.23   12.62   13.79   16.82   16.50   17.89   20.37

   Trade-weighted measures (2,3)
   All 30 foreign economies..         -       -       -       -       -   14.16   13.70   14.22   16.42
    less Brazil, Czech
     Republic................      3.86    6.54    6.73   11.99   15.35   14.37   13.92   14.45   16.69
   OECD (4,5)................      4.21    7.11    7.26   12.88   16.35   15.20   14.69   15.32   17.79
   Europe (5)................      5.01    9.75    7.88   17.10   21.66   18.42   18.34   20.00   24.22
   European Union-15 (6).....      4.94    9.67    7.77   16.88   21.33   18.31   18.19   19.80   24.05
   Asian NIEs (7)............      0.51    1.16    1.64    3.70    6.46    6.99    6.79    7.02    7.57

   Dash means data not available.
   (1) Hong Kong special administrative region of China.
   (2) Because data for Germany are not available before 1993, data for the former West
       Germany only are included in the trade-weighted measures.
   (3) For description of trade-weighted measures and economic groups, see the Technical
       Notes preceding these tables.
   (4) Organization for Economic Cooperation and Development.
   (5) Data for the Czech Republic are not included for 1975-1994.
   (6) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (7) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2004.
 
 




                                                     

 
 
   Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production
   workers in manufacturing, 31 countries or areas and selected economic groups, selected
   years, 1975-2003


   Country or area                 1975-   1975-   1980-   1985-   1990-   1995-   2000-   2002    2003
                                   2003(1) 1980    1985    1990    1995    2000    2003 

   Americas
   United States.............       4.6     9.3     5.7     3.0     3.0     2.7     4.1     4.0     4.1
   Brazil....................         -       -       -       -       -       -    -8.6   -13.7     5.4
   Canada....................       4.2     7.7     4.8     7.8      .2      .0     5.4     2.7    15.6
   Mexico....................       1.9     8.5    -6.3     -.2    -1.5     8.4     4.2     3.6    -4.9

   Asia and Oceania
   Australia.................       4.6     8.6     -.6     9.9     3.3    -1.3    11.5    16.4    29.4
   Hong Kong SAR (2).........       7.4    14.8     2.8    13.2     8.3     2.6      .6    -1.4    -2.1
   Israel....................       6.5    11.0     1.4    16.1     4.3     3.9      .7   -10.2     6.5
   Japan.....................       7.1    13.0     2.8    14.8    13.4    -1.5    -2.8    -4.0     8.6
   Korea.....................      13.2    24.3     5.2    24.6    14.5     2.5     7.7    17.0    14.3
   New Zealand...............       4.7    10.7    -3.5    13.3     4.1    -4.1    12.0    14.6    29.0
   Singapore.................       8.1    12.0    10.6     8.8    14.2      .4      .2    -5.2     7.4
   Sri Lanka.................       2.1    -5.0     5.2     4.7     6.4      .0       -    10.1       -
   Taiwan....................      10.3    21.9     8.1    21.0     8.6     1.0    -1.9    -5.1     2.1

   Europe
   Austria...................       6.4    14.5    -3.1    18.8     7.1    -5.4     9.8     8.4    22.7
   Belgium...................       5.4    15.4    -7.3    16.4     7.6    -4.8     8.8     8.4    22.0
   Czech Republic............         -       -       -       -       -     2.3    18.5    22.3    23.1
   Denmark...................       6.0    11.5    -5.5    17.8     6.7    -2.2    12.2    10.2    25.6
   Finland...................       6.5    12.4     -.2    20.9     2.8    -4.4    11.8     9.7    24.7
   France....................       5.7    14.6    -3.4    15.5     4.6    -4.3    11.0     9.4    23.4
   Germany, Former West......       5.9    14.2    -4.9    18.1     7.7    -5.5     9.7     8.0    22.9
   Germany...................         -       -       -       -       -    -5.5     9.7     8.0    22.9
   Greece....................       7.4    17.2     -.4    12.9     6.0       -       -       -       -
   Ireland...................       6.8    14.5     -.1    14.5     3.2    -1.5    14.5    12.2    25.0
   Italy.....................       5.0    11.8    -1.3    18.0    -1.6    -2.5     9.3     8.4    22.6
   Luxembourg................       4.8    13.1    -8.3    16.4     7.9    -5.6     9.7     8.7    23.5
   Netherlands...............       5.2    12.9    -6.2    15.6     6.0    -4.3    11.6    10.0    24.1
   Norway....................       5.6    11.3    -2.4    15.8     2.7    -1.8    11.7    17.2    15.6
   Portugal..................       5.2     5.4    -5.8    19.7     7.3    -2.5    11.6    10.3    23.0
   Spain.....................       6.6    18.4    -4.6    19.5     2.4    -3.4    12.0    10.8    25.5
   Sweden....................       4.6    11.7    -5.0    16.7      .6    -1.2     7.7    10.0    24.5
   Switzerland...............       5.6    12.7    -2.7    16.7     7.0    -6.2     9.9    10.4    16.9
   United Kingdom............       6.6    17.3    -3.7    15.2     1.8     4.1     6.6     8.4    13.8

   Trade-weighted measures (3,4)
   All 30 foreign economies..         -       -       -       -       -       -     4.5     3.4    11.9
    less Brazil, Czech
     Republic................       5.6    12.1      .6    11.7     4.7      .5     4.8     3.7    12.0
   OECD (5,6)................       5.2    11.6     -.2    11.3     4.1      .4     5.4     4.7    13.0
   Europe (6)................       5.9    14.5    -4.0    16.6     4.4    -2.5     9.6     9.1    21.0
   European Union-15 (7).....       5.9    14.6    -4.0    16.6     4.2    -2.3     9.5     8.9    21.2
   Asian NIEs (8)............      10.4    19.6     7.0    18.5    11.7     1.6     2.0     2.5     6.6

   Rates of change based on compound rate method.
   Dash means data not available.
   (1) 1975-2002 for Sri Lanka.  1975-1998 for Greece.
   (2) Hong Kong special administrative region of China.
   (3) Because data for Germany are not available before 1993, data for the former West
       Germany only are included in the trade-weighted measures.
   (4) Trade-weighted percent changes computed as the trade-weighted average of the rates
       of change for the individual countries or areas.  For description of trade-weighted
       measures and economic groups, see the Technical Notes preceding these tables.
   (5) Organization for Economic Cooperation and Development.
   (6) Data for the Czech Republic are not included for 1975-2003, 1975-1980, 1980-1985,
       1985-1990, and 1990-1995.
   (7) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (8) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2004.
 
 


                                                

 
 
   Table 4. Annual percent change in hourly compensation costs in national currency for
   production workers in manufacturing, 31 countries or areas and selected economic groups,
   selected years, 1975-2003


   Country or area                 1975-   1975-   1980-   1985-   1990-   1995-   2000-   2002    2003
                                   2003(1) 1980    1985    1990    1995    2000    2003 

   Americas
   United States.............       4.6     9.3     5.7     3.0     3.0     2.7     4.1     4.0     4.1
   Brazil....................         -       -       -       -       -       -     8.6     7.2    11.0
   Canada....................       5.4    10.8     8.1     4.5     3.5     1.6     3.3     4.1     3.1
   Mexico....................      29.7    22.5    51.8    61.1    16.2    17.2     8.8     7.2     6.2

   Asia and Oceania
   Australia.................       7.3    11.6     9.6     7.5     4.3     3.6     7.3    10.6     8.0
   Hong Kong SAR (2).........       9.1    14.9    12.5    13.2     8.2     2.7      .6    -1.4    -2.3
   Israel....................      46.2    68.3   200.9    29.2    13.0    10.4     4.5     1.2     2.4
   Japan.....................       3.5     7.0     3.9     4.0     4.0     1.3     -.4    -1.1      .6
   Korea.....................      16.9    30.0    13.1    19.6    16.5    10.7     9.6    13.2     9.0
   New Zealand...............       7.4    15.6    10.3     9.2     2.1     3.0     3.2     3.7     2.5
   Singapore.................       6.9     9.8    11.2     4.6     8.7     4.4      .5    -5.3     4.4
   Sri Lanka.................      12.5    12.7    16.2    13.1    11.7     8.5       -    17.8       -
   Taiwan....................       9.9    20.6    10.3    11.9     8.3     4.4     1.3    -3.1     1.7

   Europe
   Austria...................       5.0     7.9     6.4     5.3     4.7     2.3     2.6     2.7     2.5
   Belgium...................       5.3    10.2     6.8     3.8     4.9     3.0     1.7     2.6     1.9
   Czech Republic............         -       -       -       -       -    10.3     6.7     5.3     6.1
   Denmark...................       6.6    11.1     7.2     5.8     4.6     5.3     4.8     4.3     4.8
   Finland...................       7.9    12.7    10.5     9.8     5.6     3.3     4.5     3.9     4.2
   France....................       6.8    14.3    12.3     4.5     2.8     2.7     3.7     3.6     3.1
   Germany, Former West......       4.6     7.5     4.8     4.8     5.1     2.2     2.5     2.3     2.7
   Germany...................         -       -       -       -       -     2.2     2.5     2.3     2.7
   Greece....................      18.2    23.9    26.0    16.0    14.3       -       -       -       -
   Ireland...................       8.4    16.3    13.9     4.8     3.9     4.9     7.0     6.3     4.5
   Italy.....................       8.7    18.0    15.8     7.5     4.6     2.6     2.1     2.6     2.4
   Luxembourg................       4.7     8.0     5.7     3.8     5.2     2.1     2.5     3.0     3.2
   Netherlands...............       4.2     7.6     3.9     2.5     3.3     3.7     4.2     4.2     3.7
   Norway....................       6.7    10.1     9.1     8.6     3.0     4.9     3.8     4.0     2.5
   Portugal..................      12.7    20.7    20.5    15.3     8.3     5.0     4.2     4.4     2.8
   Spain.....................      10.2    23.8    13.4     7.9     6.6     4.0     4.6     4.9     4.8
   Sweden....................       7.1    12.2     9.5     8.3     4.4     3.9     3.2     3.4     3.5
   Switzerland...............       3.2     3.4     5.0     4.1     3.6      .7     1.8     1.7     1.0
   United Kingdom............       7.8    16.2     8.2     8.1     4.3     4.9     3.9     3.9     4.6

   Trade-weighted measures (3,4)
   All 30 foreign economies..         -       -       -       -       -       -     3.8     3.5     3.6
    less Brazil, Czech
     Republic................      10.4    14.5    17.2    14.6     6.8     5.1     3.7     3.4     3.5
   OECD (5,6)................      10.0    13.5    15.0    14.8     6.5     5.1     4.0     4.1     3.6
   Europe (6)................       6.5    12.4     8.7     5.8     4.4     3.3     3.4     3.4     3.3
   European Union-15 (7).....       6.6    12.8     8.8     5.9     4.4     3.4     3.5     3.5     3.4
   Asian NIEs (8)............      11.4    20.6    11.7    13.1    11.0     6.2     3.7     1.9     4.1

   Rates of change based on compound rate method.
   Dash means data not available.
   (1) 1975-2002 for Sri Lanka.  1975-1998 for Greece.
   (2) Hong Kong special administrative region of China.
   (3) Because data for Germany are not available before 1993, data for the former West
       Germany only are included in the trade-weighted measures.
   (4) Trade-weighted percent changes computed as the trade-weighted average of the rates
       of change for the individual countries or areas.  For description of trade-weighted
       measures and economic groups, see the Technical Notes preceding these tables.
   (5) Organization for Economic Cooperation and Development.
   (6) Data for the Czech Republic are not included for 1975-2003, 1975-1980, 1980-1985,
       1985-1990, and 1990-1995.
   (7) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (8) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2004.
 
 




                                                    

 
 
   Table 5. Annual percent change in exchange rates (U.S. dollars per national currency
   unit), 31 countries or areas and selected economic groups, selected years, 1975-2003


   Country or area                 1975-   1975-   1980-   1985-   1990-   1995-   2000-   2002    2003
                                   2003(1) 1980    1985    1990    1995    2000    2003 

   Americas
   United States.............         -       -       -       -       -       -       -       -       -
   Brazil....................         -       -       -       -       -       -   -15.9   -19.4    -5.0
   Canada....................      -1.1    -2.7    -3.1     3.2    -3.2    -1.6     2.0    -1.3    12.1
   Mexico....................     -21.5   -11.5   -38.3   -38.0   -15.2    -7.5    -4.3    -3.4   -10.5

   Asia and Oceania
   Australia.................      -2.5    -2.7    -9.3     2.2    -1.0    -4.7     3.9     5.2    19.9
   Hong Kong SAR (2).........      -1.6     -.1    -8.6      .0      .1     -.1      .0      .0      .2
   Israel....................     -27.2   -34.1   -66.3   -10.2    -7.7    -5.9    -3.6   -11.2     4.0
   Japan.....................       3.4     5.6    -1.1    10.5     9.1    -2.7    -2.4    -2.9     8.0
   Korea.....................      -3.2    -4.4    -6.9     4.2    -1.7    -7.4    -1.7     3.4     4.9
   New Zealand...............      -2.6    -4.3   -12.6     3.7     1.9    -7.0     8.5    10.5    25.8
   Singapore.................       1.1     2.1     -.5     3.9     5.1    -3.9     -.3      .1     2.9
   Sri Lanka.................      -9.2   -15.7    -9.5    -7.5    -4.8    -7.8       -    -6.6       -
   Taiwan....................        .4     1.1    -2.0     8.2      .3    -3.2    -3.1    -2.1      .4

   Europe
   Austria...................       1.3     6.1    -9.0    12.8     2.4    -7.5     7.0     5.6    19.7
   Belgium...................        .1     4.7   -13.2    12.2     2.5    -7.6     7.0     5.6    19.7
   Czech Republic............         -       -       -       -       -    -7.2    11.0    16.2    16.1
   Denmark...................       -.5      .4   -11.9    11.4     2.0    -7.1     7.2     5.7    19.9
   Finland...................      -1.3     -.3    -9.7    10.1    -2.6    -7.4     7.0     5.6    19.7
   France....................      -1.1      .3   -14.0    10.5     1.8    -6.8     7.0     5.6    19.7
   Germany, Former West......       1.3     6.2    -9.2    12.7     2.5    -7.5     7.0     5.6    19.7
   Germany...................         -       -       -       -       -    -7.5     7.0     5.6    19.7
   Greece....................      -9.2    -5.4   -21.0    -2.7    -7.3       -       -       -       -
   Ireland...................      -1.5    -1.5   -12.3     9.2     -.7    -6.1     7.0     5.6    19.7
   Italy.....................      -3.4    -5.3   -14.8     9.8    -6.0    -4.9     7.0     5.6    19.7
   Luxembourg................        .1     4.7   -13.2    12.2     2.5    -7.6     7.0     5.6    19.7
   Netherlands...............        .9     4.9    -9.8    12.7     2.6    -7.6     7.0     5.6    19.7
   Norway....................      -1.1     1.1   -10.5     6.6     -.3    -6.4     7.6    12.7    12.7
   Portugal..................      -6.7   -12.7   -21.9     3.8    -1.0    -7.1     7.0     5.6    19.7
   Spain.....................      -3.3    -4.3   -15.9    10.8    -3.9    -7.1     7.0     5.6    19.7
   Sweden....................      -2.4     -.4   -13.2     7.8    -3.7    -4.9     4.3     6.4    20.3
   Switzerland...............       2.4     9.0    -7.4    12.0     3.3    -6.9     7.9     8.5    15.8
   United Kingdom............      -1.1      .9   -11.0     6.6    -2.4     -.8     2.5     4.3     8.8

   Trade-weighted measures (3,4)
   All 30 foreign economies..         -       -       -       -       -       -      .7     -.1     8.1
    less Brazil, Czech
     Republic................      -3.6    -1.6   -11.4      .2    -1.8    -4.2     1.0      .3     8.3
   OECD (5,6)................      -3.6    -1.4   -11.4     -.1    -2.0    -4.3     1.4      .6     9.1
   Europe (6)................       -.5     2.1   -11.5    10.2      .0    -5.6     6.0     5.6    17.1
   European Union-15 (7).....       -.7     1.7   -11.7    10.2     -.2    -5.6     5.9     5.3    17.3
   Asian NIEs (8)............       -.9     -.7    -4.2     4.9      .6    -4.3    -1.7      .4     2.3

   Rates of change based on compound rate method.
   Dash means data not available.
   (1) 1975-2002 for Sri Lanka.  1975-1998 for Greece.
   (2) Hong Kong special administrative region of China.
   (3) Because data for Germany are not available before 1993, data for the former West
       Germany only are included in the trade-weighted measures.
   (4) Trade-weighted percent changes computed as the trade-weighted average of the rates
       of change for the individual countries or areas.  For description of trade-weighted
       measures and economic groups, see the Technical Notes preceding these tables.
   (5) Organization for Economic Cooperation and Development.
   (6) Data for the Czech Republic are not included for 1975-2003, 1975-1980, 1980-1985,
       1985-1990, and 1990-1995.
   (7) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (8) The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2004.
 
 




                                                   

  
  
   Table 6. Hourly compensation costs in national currency units and exchange rates, 31
   countries or areas, 2003


    Country or area        Compensation costs       Exchange Rates

   Americas
   United States.............   21.97                     1.000
   Brazil....................    8.22                     3.076
   Canada....................   27.01                     1.401
   Mexico....................   26.71                     10.79

   Asia and Oceania
   Australia.................   30.76                     1.534
   Hong Kong SAR (1).........   43.15                     7.788
   Israel....................   53.42                     4.554
   Japan.....................    2329                     116.0
   Korea.....................   12258                      1192
   New Zealand...............   19.05                     1.712
   Singapore.................   12.90                     1.741
   Sri Lanka.................       -                         -
   Taiwan....................   201.1                     34.41

   Europe
   Austria...................   22.43                     .8838
   Belgium...................   24.51                     .8838
   Czech Republic............   132.9                     28.21
   Denmark...................   211.8                     6.580
   Finland...................   24.01                     .8838
   France....................   18.67                     .8838
   Germany...................   26.44                     .8838
   Greece....................       -                         -
   Ireland...................   16.92                     .8838
   Italy.....................   16.22                     .8838
   Luxembourg................   20.43                     .8838
   Netherlands...............   23.72                     .8838
   Norway....................   223.4                     7.082
   Portugal..................    5.51                     .8838
   Spain.....................   13.22                     .8838
   Sweden....................   203.5                     8.082
   Switzerland...............   37.48                     1.345
   United Kingdom............   12.46                     .6120

   Dash means data not available.
   (1) Hong Kong special administrative region of China.

   National currency units are: United States, dollar; Canada, dollar;
   Brazil, real; Mexico, peso; Australia, dollar; Hong Kong, dollar;
   Israel, new shekel; Japan, yen; Korea, won; New Zealand, dollar;
   Singapore, dollar; Sri Lanka, rupee; Taiwan, dollar; Austria, euro;
   Belgium, euro; Czech Republic, koruna; Denmark, krone; Finland, euro;
   France, euro; Germany, euro; Greece, euro; Ireland, euro; Italy, euro;
   Luxembourg, euro; Netherlands, euro; Norway, krone; Portugal, euro;
   Spain, euro; Sweden, krona; Switzerland, franc; United Kingdom, pound.

   Note: For data for all years 1975-2003, see the supplementary tables to this
         news release at http://www.bls.gov/fls.
         

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2004.
 
 
 
 
TECHNICAL NOTES
 
     The tables in this news release present international comparisons of hourly compensation costs for 
production workers in manufacturing in selected countries or areas.  The total compensation measures are 
prepared by the Bureau of Labor Statistics in order to assess international differences in employer labor 
costs.  Comparisons based on the more readily available average earnings statistics published by many 
countries can be very misleading.  National definitions of average earnings differ considerably; average 
earnings do not include all items of labor compensation; and the omitted items of compensation frequently 
represent a large proportion of total compensation.

     The compensation measures are computed in national currency units and are converted into U.S. dollars 
at prevailing commercial market currency exchange rates.  The foreign currency exchange rates used in the 
calculations are the average daily exchange rates for the reference period.  They are appropriate measures 
for comparing levels of employer labor costs.  They do not indicate relative living standards of workers or 
the purchasing power of their income.  Prices of goods and services vary greatly among countries, and 
commercial market exchange rates are not reliable indicators of relative differences in prices.

Definitions

     Hourly compensation costs include (1) hourly direct pay and (2) employer social insurance expenditures 
and other labor taxes.  Hourly direct pay includes all payments made directly to the worker, before payroll 
deductions of any kind, consisting of (a) pay for time worked (basic time and piece rates plus overtime 
premiums, shift differentials, other premiums and bonuses paid regularly each pay period, and cost-of-
living adjustments) and (b) other direct pay (pay for time not worked (vacations, holidays, and other leave, 
except sick leave), seasonal or irregular bonuses and other special payments, selected social allowances, 
and the cost of payments in kind).  Social insurance expenditures and other labor taxes include (c) 
employer expenditures for legally required insurance programs and contractual and private benefit plans 
(retirement and disability pensions, health insurance, income guarantee insurance and sick leave, life and 
accident insurance, occupational injury and illness compensation, unemployment insurance, and family 
allowances) and, for some countries, (d) other labor taxes (other taxes on payrolls or employment (or 
reductions to reflect subsidies), even if they do not finance programs that directly benefit workers, because 
such taxes are regarded as labor costs).  For consistency, compensation is measured on an hours-worked 
basis for every country.

     The BLS definition of hourly compensation costs is not the same as the International Labor Office (ILO) 
definition of total labor costs.  Hourly compensation costs do not include all items of labor costs.  The costs 
of recruitment, employee training, and plant facilities and services-such as cafeterias and medical clinics-
are not included because data are not available for many countries.  The labor costs not included account 
for no more than 4 percent of total labor costs in any country for which the data are available.

     Production workers generally include those employees who are engaged in fabricating, assembly, and 
related activities; material handling, warehousing, and shipping; maintenance and repair; janitorial and 
guard services; auxiliary production (for example, powerplants); and other services closely related to the 
above activities.  Working supervisors are generally included; apprentices and other trainees are generally 
excluded.

Methods

     Total compensation is computed by adjusting each country's average earnings series for items of direct 
pay not included in earnings and for employer expenditures for legally required insurance, contractual and 
private benefit plans, and other labor taxes.  For the United States and other countries that measure earnings 
on an hours-paid basis, the figures are also adjusted in order to approximate compensation per hour worked.

     Earnings statistics are obtained from surveys of employment, hours, and earnings or from surveys or 
censuses of manufactures.

     Adjustment factors are obtained from periodic labor cost surveys and interpolated or projected to non-
survey years on the basis of other information for most countries.  The information used includes 
tabulations of employer social security contribution rates provided by the International Social Security 
Association, information on contractual and legislated fringe benefit changes from labor bulletins, and 
statistical series on indirect labor costs.  For other countries, adjustment factors are obtained from surveys 
or censuses of manufactures or from reports on fringe-benefit systems and social security.  For the United 
States, the adjustment factors are special calculations for international comparisons based on data from 
several surveys.

     The statistics are also adjusted, where necessary, 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.  Nevertheless, some differences in industrial coverage remain and, 
with the exception of the United States, Canada, and several other countries, the data exclude very small 
establishments (less than 5 employees in Japan and less than 10 employees in most European and some 
other countries).  For the United States, the methods used, as well as the results, differ somewhat from 
those for other BLS series on U.S. compensation costs.

     Hourly compensation costs are converted to U.S. dollars using the average daily exchange rate for the 
reference period.  The exchange rates used are prevailing commercial market exchange rates as published 
by either the U.S. Federal Reserve Board or the International Monetary Fund.

     On January 1, 1999, several European countries joined the European Monetary Union (EMU): Austria, 
Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.  
Greece joined on January 1, 2001.  Currencies of EMU members were established at fixed conversion rates 
to the euro, the official currency of the EMU. Currencies of EMU members were established at fixed 
conversion rates to the euro, the official currency of the EMU.  In this release, data on hourly compensation 
costs in national currency and exchange rates for the EMU countries relate to euros for 1999 to present;  for 
the years 1975-1998 these data are published in the old national currencies used in each country before the 
euro was adopted.  In order to include data on trends in national currency compensation costs and exchange 
rates for the entire time period, BLS converts national currency for 1975-1998 to a "euro" basis for 
calculation.  The conversions for all years 1975-1998 are made using the official fixed conversion rates for 
1999.

Industrial classification

     The hourly compensation measures relate to manufacturing on a North American Industry Classification 
System (NAICS) basis.  NAICS is a common industrial classification used by the United States, Canada, 
and Mexico.  The NAICS definition of manufacturing differs somewhat from the definition of 
manufacturing used in other countries.  Some industries that are not included in the NAICS definition of 
manufacturing, such as publishing of books and sound recordings, some repair and maintenance of 
equipment, and some business support services, are included in the definition of manufacturing in most 
other industrial classifications.   Other industries, such as some processing of foods, some packaging, and 
retail sales of bakery products from the production facility, are included in the NAICS definition of 
manufacturing but not in the definition of manufacturing for most foreign economies.  Most of the 
differences other than the treatment of publishing are very minor and do not have a noticeable impact on 
overall manufacturing averages.

     BLS makes adjustments to remove publishing from manufacturing for the foreign economies which do 
not use NAICS, except for Taiwan, which does not include publishing in manufacturing, and for Australia 
and Sri Lanka, for which the data necessary to remove publishing are not available.  For the countries for 
which adjustments are made, the effect of publishing on manufacturing wages was estimated and removed 
using data from national sources, the United Nations Industrial Statistics Database, the International Labor 
Office (ILO), and other sources.  Except for Hong Kong, the effect of removing publishing from 
manufacturing does not change the level of hourly compensation costs for any economy more than 1.5 
percent.  For Hong Kong, the effect of the adjustments is 2 to 4 percent in several years.

Country notes 

     The following are exceptions to the standard coverage and definitions explained above:

     Australia.  Compensation relates to production workers and non-production workers other than those in 
managerial, executive, professional, and higher supervisory positions.

     Hong Kong SAR.  Average of selected manufacturing industries.  The industries covered accounted for 
about 70 percent of all persons employed in manufacturing in 1988.  Compensation excludes overtime pay.  
Hong Kong became a Special Administrative Region (SAR) of China in July 1997.

     Austria.  Excludes workers in establishments considered handicraft manufacturers.  (All printing and 
publishing and miscellaneous manufacturing establishments are classified in handicrafts.)  In 1986, 
handicraft employment was about 35 percent of all manufacturing employment.  Average compensation per 
employee was about 10 percent lower in manufacturing including handicrafts than in manufacturing 
excluding handicrafts.

     Finland.  Includes workers in mining and electrical power plants.  For comparability with other 
countries, compensation excludes some obligatory training and plant facilities costs; these costs would add 
1.6 percent to average hourly compensation costs in 1994.

     Germany.  Excludes workers in establishments considered handicraft manufacturers.  In 1990, 
handicraft employment in the former West Germany was about 25 percent of all manufacturing 
employment.  Average hourly earnings of production workers were about 3 percent lower in manufacturing 
including handicrafts than in manufacturing excluding handicrafts.

     Ireland.  Data refer to September for 1975.

     Norway.  For comparability with other countries, compensation excludes some obligatory training and 
plant facilities costs; these costs would add 2.2 percent to average hourly compensation costs in 1994.  

Trade-weighted measures

     The trade weights used to compute the average compensation cost measures for selected economic 
groups are relative importances derived from the sum of U.S. imports of manufactured products for 
consumption (customs value) and U.S. exports of domestic manufactured products (free along side {f.a.s.} 
value) in 1999 for each country or area and each economic group.  See table below.
			
Share of total U.S. imports and exports 
of manufactured products in 1999
(in percent)


Country or area       1999       Country or area        1999
      and             trade             and             trade
economic group        share       economic group        share

Brazil                 1.5    Greece                      .1
Canada                21.5    Ireland                    1.1
Mexico                11.8    Italy                      2.0
Australia              1.0    Luxembourg                  .1
Hong Kong SAR 1        1.5    Netherlands                1.6
Israel                 1.1    Norway                      .2
Japan                 11.8    Portugal                    .2
Korea                  3.4    Spain                       .7
New Zealand             .2    Sweden                      .8
Singapore              2.2    Switzerland                1.1
Sri Lanka               .1    United Kingdom             4.6
Taiwan                 3.4  
Austria                 .4  Economic groups:
Belgium                1.3    30 foreign
Czech Republic         0.1    economies                 82.3
Denmark                 .3  OECD 3                      72.5
Finland                 .3  Europe                      22.7
France                 2.7  European Union 4            21.4
Germany 2              5.2  Asian NIEs                  10.5
 

1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
3 Organization for Economic Cooperation and Development.
4 Includes the 15 European Union members prior to expansion on May 1, 2004.

     The trade data used to compute the weights are U.S. Bureau of the Census statistics of U.S. imports and 
exports converted to a Standard Industrial Classification (SIC) basis from data initially collected under the 
Harmonized Tariff Schedule commodity classification system.

     The countries included in the Organization for Economic Cooperation and Development (OECD) trade-
weighted measure are Canada, Mexico, Australia, Japan, Korea, New Zealand, and all European countries.  
The group labeled "European Union-15" consists of the 15 members of the European Union before the 
expansion to 25 countries on May 1, 2004 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, 
Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom).  The 
group labeled "Europe" consists of the 15 members of the European Union-15, the Czech Republic, 
Norway, and Switzerland. The group labeled "Asian NIEs" consists of the four newly industrializing 
economies of Hong Kong SAR, Korea, Singapore, and Taiwan.

     The trade-weighted measures relate to all the countries or areas covered in the series.  In these measures, 
data for Germany relate to the former West Germany.  Estimates are computed for missing country data 
using the average trend in other economies to estimate the missing data.  Trade weighted average percent 
changes for the 30 foreign economies are computed both including and excluding Brazil, Mexico and Israel 
because their rapid rates of inflation and currency changes in several years distort the trade-weighted 
averages.

     The trade-weighted average rates of change are computed as the trade-weighted arithmetic average of 
the rates of change for the individual countries or areas; the trade-weighted average hourly compensation 
costs are computed as the trade-weighted arithmetic average of cost levels for the individual countries or 
areas.  Rates of change derived from the trade-weighted average hourly compensation cost levels need not 
be the same as the trade-weighted average rates of change.

Data limitations

     Because compensation is partly estimated, the statistics should not be considered as precise measures of 
comparative compensation costs.  In addition, the figures are subject to revision as the results of new labor 
cost surveys or other data used to estimate compensation costs become available.

     The comparative level figures in this report are averages for all manufacturing industries and are not 
necessarily representative of all component industries.  In the United States and some other countries, such 
as Japan, differentials in hourly compensation cost levels by industry are fairly wide.  In contrast, some 
countries, such as Denmark and Sweden, have narrow differentials, while others, such as Brazil and 
Mexico, have very wide differentials.

Labor costs versus labor income

     The hourly compensation figures in U.S. dollars shown in the tables provide comparative measures of 
employer labor costs; they do not provide intercountry comparisons of the purchasing power of worker 
incomes.  Prices of goods and services vary greatly among countries, and the commercial market exchange 
rates used to compare employer labor costs do not reliably indicate relative differences in prices.  
Purchasing power parities that is, the number of foreign currency units required to buy goods and services 
equivalent to what can be purchased with one unit of U.S. or other base-country currency must be used for 
meaningful international comparisons of the relative purchasing power of worker incomes.

     Total compensation converted to U.S. dollars at purchasing power parities would provide one measure 
for comparing relative real levels of labor income.  It should be noted, however, that total compensation 
includes employer payments to funds for the benefit of workers in addition to payments made directly to 
workers.  (For a few countries, the compensation measures also include taxes or subsidies on payrolls or 
employment even if they do not finance programs which directly benefit workers.)  Payments into these 
funds provide either deferred income (for example, payments to retirement funds), a type of insurance (for 
example, payments to unemployment or health benefit funds), or current social benefits (for example, 
family allowances), and the relationship between employer payments and current or future worker benefits 
is indirect.  On the other hand, excluding these payments would understate the total value of income 
derived from work because they substitute for worker savings or self-insurance to cover retirement, medical 
costs, etc.

     Total compensation, because it takes account of employer payments into funds for the benefit of 
workers, is a broader income concept than either total direct earnings or direct spendable earnings.  An 
even broader concept would take account of all social benefits available to workers, including those 
financed out of general revenues as well as those financed through employment or payroll taxes.