Internet address:  http://stats.bls.gov/flshome.htm     USDL:  98-38
Technical information:  (202) 606-5654                  For Release: 10:00 A.M. EST
Media contact:  (202) 606-5902                          Monday, February 9, 1998



INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING
UPDATED DATA FOR 1996

	Data from new labor cost surveys for Japan and European Union countries have been 
incorporated on a preliminary basis into the international comparisons series of hourly 
compensation costs for production workers in manufacturing by the Bureau of Labor 
Statistics, U.S. Department of Labor.  The series also include more current earnings and 
additional compensation data for those and other countries.  Also, 1996 data are now 
available for four additional countries.  With the exception of France and Finland, the 
position of each country and country group relative to the United States is similar to that 
presented in the June 27, 1997 News Release (USDL: 97-213).  

	For the 28 foreign economies studied, the trade-weighted average hourly 
compensation costs for production workers in manufacturing were about 90 percent of the 
United States cost level in 1996.  Between 1995 and 1996, costs in Canada rose slightly 
to 94 percent of the U.S. costs, while Mexico's costs declined to 8 percent of U.S. costs.   
Labor costs in Europe and Japan remained above U.S. costs, but costs in Japan fell below 
the average cost level in Europe for the first time since 1992. The Asian newly 
industrialized economies (NIEs) experienced a relative rise in compensation costs to 39 
percent of U.S. costs.  (See charts 1 and 2.)


Chart 1. Hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1975-96

PRINTED COPY CONTAINS CHART AT THIS POINT.


BOX: A NOTE ON THE MEASURES

	The hourly compensation measures in this news release are based on statistics available 
to BLS as of November 1997.  They are prepared specifically for international comparisons of 
employer labor costs in manufacturing.  The methods used, as well as the results, differ 
somewhat from those for other BLS series on U.S. compensation costs.

	Total compensation costs include pay for time worked, other direct pay (including 
holiday and vacation pay, bonuses, other direct payments, and the cost of pay 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:  Because hourly compensation is partly estimated, these statistics should 
not be considered as precise measures of comparative compensation costs.  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.

	For further information regarding definitions, sources, and computation methods and a 
description of the trade-weighted measures and economic groups, see the Technical Notes.

END OF BOX (A NOTE ON THE MEASURES)


1996 compensation costs

	In the United States, hourly compensation costs for manufacturing production 
workers increased 3 percent from 1995 to $17.70 in 1996.  In U.S. dollars, Canada's 
compensation costs rose 3.9 percent to $16.66, and Mexico's declined 0.7 percent to 
$1.50.  (See tables A and 2.)

	Trade-weighted measures of hourly compensation costs in U.S. dollars for Europe 
increased slightly (1.2 percent) to $22.37, whereas the trade-weighted average of the 
Asian NIEs rose 6.9 percent to $6.87.  Overall, the trade-weighted average for the 28 
countries studied remained relatively unchanged.

	Changes over time in relative compensation cost levels in U.S. dollars are affected by 
the differences in underlying national wage and benefit trends measured in national 
currencies, as well as frequent and sometimes sharp changes in relative values of 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). 

	Measured in national currency terms, only Japan and eight European countries 
experienced a slower rate of increase in compensation costs from the previous year than 
the United States.

	The 1995-1996 change for Canada in national currency units was slightly above the 
United States level at 3.2 percent, while Mexico's 18.1 percent increase in hourly 
compensation costs was the highest of all countries studied. 

	The trade-weighted average of wage and benefit increases in Europe, on a national 
currency basis, was 3.3 percent from 1995 to 1996, also slightly above the U.S rate of 
increase.  Among the Asian NIEs, the trade-weighted average compensation cost increase 
was 9.4 percent.  The trade-weighted average increase for all 28 foreign economies was 
5.4 percent.

	The U.S. dollar's strength relative to other nations' currencies offset increases in 
hourly compensation costs measured in national currencies and led to declines or smaller 
increases in hourly compensation costs measured in U.S. dollars.

	Thus, hourly compensation costs in Japan declined by 12.4 percent in 1996 when 
measured in U.S. dollars.  The 18.1 percent increase in Mexican hourly compensation 
costs on a national currency basis was more than offset by Mexico's currency 
depreciation, so that hourly compensation measured in U.S. dollars declined slightly.  In 
contrast, Canada's slight currency appreciation boosted its hourly compensation growth 
rate to almost 4 percent on a U.S. dollar basis. 

	Owing to declines in the average trade-weighted currency values, hourly 
compensation cost increases in 1996 in Europe, the Asian NIEs, and the composite of all 
28 foreign economies studied were lower when measured in U.S. dollars than when 
measured on a national currency basis.  


Chart 2. Indexes of hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1996 (U.S. = 100)

PRINTED COPY CONTAINS CHART AT THIS POINT.


Table A.  Percent change, 1995-96

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)


Country                     National     Exchange        U.S.  
or area                     currency       rates       dollar  


United States                  3.0            -          3.0  
Canada                         3.2           .7          3.9  
Mexico                        18.1        -15.6          -.7  

Australia                      4.9          5.7         10.9  
Hong Kong                      6.5           .0          6.6  
Israel                        13.9         -8.4          4.3  
Japan                          1.4        -13.6        -12.4  
Korea                         15.8         -4.1         11.1  
New Zealand                    4.1          4.8          9.1  
Singapore                     12.9           .5         13.5  
Sri Lanka                      8.3         -7.3           .0  
Taiwan                         3.8         -3.5           .2  

Austria                        3.3         -4.8         -1.7  
Belgium                        2.1         -4.8         -2.9  
Denmark                        4.2         -3.5           .6  
Finland                        2.5         -4.8         -2.4  
France                         2.2         -2.5          -.4  
Germany 1                      3.7         -4.9         -1.3  
Greece                         9.2         -3.7          5.0  
Ireland                        2.4          -.2          2.1  

Italy                          2.4          5.6          8.2  
Luxembourg                     1.5         -4.8         -3.4  
Netherlands                    1.3         -4.9         -3.7  
Norway                         4.7         -1.9          2.7  
Portugal                       7.0         -2.9          3.9  
Spain                          6.1         -1.7          4.4  
Sweden                         6.6          6.5         13.5  
Switzerland                    1.2         -4.4         -3.3  
United Kingdom                 4.5         -1.1          3.4  

Trade-weighted measures
All 28 foreign economies       5.4         -4.9           .1  
OECD 2                         5.1         -5.3          -.6  
  less Mexico, Korea 3         2.8         -4.0         -1.3  
Europe                         3.3         -2.1          1.2  
European Union                 3.4         -2.0          1.4  
Asian NIEs                     9.4         -2.3          6.9  


1  Germany refers to the former West Germany.   
2  OECD refers to the Organization for Economic Cooperation and Development.
3  Mexico joined the OECD in 1994 and Korea joined in 1996.


Long-term trends in comparative compensation costs

	From 1975 to 1996, hourly compensation costs measured in national currency 
increased more rapidly in almost all of the foreign economies than in the United States.  
In only three countries - Japan, the Netherlands, and Switzerland - were average annual 
percent changes in hourly compensation costs below the U.S. rate of 5 percent.  (See table 
5.)

	Mexico and Korea were two of five countries whose hourly compensation costs 
increased at annual rates of more than 15 percent. Canada's hourly compensation costs 
increased 6.5 percent.

	The trade-weighted average increase in compensation costs in national currency for 
Europe was 7.6 percent.  The trade-weighted measure for the Asian NIEs rose 13.4 
percent.

	When compensation costs in national currency are converted to U.S. dollars, 
Canada's hourly compensation costs rose 5 percent annually - remaining essentially 
unchanged relative to the United States over the whole 21-year period - as the 1.4 percent 
average annual decline in Canada's exchange rate partially offset the underlying cost 
increase.  However, the fluctuating exchange rates affected Canada's relative costs in 
U.S. dollars over shorter time periods.  This is also true for most other countries covered.  
(See tables 1, 3, and 7.)

	In the case of Mexico, the declines in currency value more than offset the increases in 
compensation costs in pesos.  Mexico's costs were 23 percent of U.S. costs in 1975, but 
fell to 8 percent of the U.S. level by 1996. 

	In contrast, while Japan had one of the smallest annual average increases in hourly 
compensation costs over the 21-year period measured on a national currency basis, it also 
had the largest increase in relative currency value among the economies studied.  Japan's 
compensation costs rose during the period from 47 percent of the U.S. cost level in 1975 
to 118 percent of the U.S. cost level in 1996.

	For Europe, trade-weighted average compensation costs in U.S. dollars increased at 
virtually the same rate as the average compensation costs in national currencies.  
Comparing 1975 and 1996 levels with those of the United States, the composite measure 
for Europe was 80 percent in 1975 and 126 percent of the United States level in 1996.  

	For the Asian NIEs, trade-weighted labor costs in manufacturing in U.S. dollars 
increased at the same rate as in national currency over the whole period.  From 1975 to 
1996, the Asian NIEs' cost levels rose from 8 percent of the U.S. level to 39 percent. 

	For a composite of all of the foreign economies studied, hourly compensation costs 
rose from 60 percent of U.S. costs in 1975 to 91 percent in 1996.

Recent exchange rates

	Between 1996 (annual average) and mid-December 1997, the currencies of all but 
two of the 28 foreign economies declined in value relative to the U.S. dollar.  The largest 
decline was about 50 percent for the Korean won.  The exchange rate value of the 
Japanese yen and most other Asian and Pacific currencies declined about 15 percent, and 
all European currencies (except the British pound) declined from 10 to 15 percent relative 
to the U.S. dollar.  The Canadian dollar and Mexican peso fell about 5 percent.

	At December 1997 exchange rates, assuming underlying compensation trends in all 
countries were similar to U.S. trends between 1996 and December 1997, Japanese 
compensation costs in U.S. dollars would fall slightly below U.S. costs, and the trade-
weighted average costs of the Asian NIEs would fall to about 30 percent of the U.S. cost 
level.  The European trade-weighted average would fall from 126 percent to 110 percent 
of U.S. costs, and the trade-weighted average of all 28 foreign economies would decline 
from 91 percent to 80 percent of the U.S. cost level.

Additional data available

	In addition to the compensation cost measures covered in this news release, 
additional data are available showing comparative levels of hourly compensation costs, 
hourly direct pay, and pay for time worked and the structure of compensation in 
manufacturing for all years from 1975 through 1996.

	BLS also computes comparative measures for 39 component manufacturing 
industries.  Data are available through 1994.  These data for the component industries are 
not included in this release because, in general, the data limitations are greater than they 
are for the total manufacturing measures.  Nevertheless, these data are made available 
upon request and via the Internet (http://stats.bls.gov/flshome.htm), and there are no 
restrictions on their use.

	For further information, contact the Office of Productivity and Technology, Bureau 
of Labor Statistics, 2 Massachusetts Avenue, NE, Room 2150, Washington, DC 20212-0001
or call 202-606-5654.

	Information in this report is available to sensory impaired individuals upon request.  
Voice phone: 202-606-STAT; TDD phone: 202-606-5897; TDD message referral phone: 
1-800-326-2577.

	This material is in the public domain and, with appropriate credit, may be reproduced 
without permission.


BOX: REVISED MEASURES

	The hourly compensation costs series for Japan and selected European Union 
countries (Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the 
Netherlands, Spain, and the United Kingdom) were revised to incorporate data from new 
labor cost surveys.  These revisions are preliminary calculations for Belgium, Denmark, 
France, Greece, Italy, and the United Kingdom.  Data are subject to revision in the next 
update.

	For Japan, statistics for 1992 to 1996 were revised to incorporate the results of a 
1995 labor cost survey.  For the European Union countries, statistics were revised for 
1989 to 1996 (1975 to 1996 for Luxembourg) to incorporate data from harmonized 1992 
labor cost surveys. 

	The 1992 labor cost surveys for the European Union countries were conducted with a 
new model questionnaire; industry data were published using a revised industrial 
classification; and data were published by the Statistical Office of the European 
Communities (Eurostat) for all employees only.  Only Germany collected and published 
separate data for all employees and production workers.  

	For Luxembourg, BLS used all-employee compensation structure data to recompute 
benchmark adjustment factors from earlier labor cost surveys and to revise additional 
compensation costs for 1975 to1996.  Additional compensation data for France, Ireland, 
the Netherlands, Spain, and the United Kingdom already related to all employees. 

	For Belgium, Denmark, Greece, and Italy, BLS made preliminary calculations using 
the changes in all-employee compensation structure to estimate 1992 benchmark 
adjustment factors for production workers, and revised the additional compensation 
adjustment factor time series for 1989 to 1996.  For the United Kingdom, BLS made 
preliminary calculations which included adjustments for changes in the measurement of 
selected cost items.

	For France, the revised cost levels from 1989 to 1996 reflect an increase in bonus 
payments as reported in the 1992 labor cost survey.  However, a change in collection 
procedures for the 1992 survey likely resulted in a discontinuity in compensation 
structure.  For Finland, revised data for 1995-96 reflect the results of new information on 
social insurance expenditures.

END OF BOX (REVISED MEASURES)

Table 1. Indexes of hourly compensation costs for production workers in 
manufacturing, 29 countries or areas and selected economic groups, selected 
years, 1975-96
(Index, United States = 100)
______________________________________________________________________________

Country or area           1975  1980  1985  1990  1992  1993  1994  1995  1996
______________________________________________________________________________

United States ......       100   100   100   100   100   100   100   100   100

Canada .............        94    88    84   106   106   100    94    93    94
Mexico .............        23    22    12    11    13    15    15     9     8

Australia ..........        88    86    63    88    81    76    83    88    94
Hong Kong ..........        12    15    13    21    24    26    27    28    29
Israel .............        35    38    31    57    56    53    54    61    62
Japan ..............        47    56    49    86   102   116   126   138   118

Korea ..............         5    10     9    25    32    34    38    43    46
New Zealand ........        50    54    34    56    49    49    53    59    62
Singapore ..........        13    15    19    25    31    32    37    43    47
Sri Lanka ..........         4     2     2     2     2     3     3     3     3
Taiwan .............         6    10    12    26    32    31    33    34    33

Austria ............        71    90    58   119   126   122   128   148   141
Belgium ............       101   133    69   129   137   130   137   155   146
Denmark ............        99   110    62   121   126   116   121   140   137
Finland ............        72    83    63   141   124   101   113   140   133

France 1 ...........        71    91    58   107   115   108   111   124   120
Germany 2 ..........       100   125    74   148   159   154   161   188   180
Greece .............        27    38    28    45    47    44    46    53    54
Ireland ............        48    60    46    78    82    72    73    79    78

Italy ..............        73    83    59   117   120    96    94    94    99
Luxembourg .........       102   122    60   112   119   114   121   136   127
Netherlands ........       103   122    67   121   125   122   123   140   131
Norway .............       106   117    80   144   143   122   124   142   141

Portugal ...........        25    21    12    25    32    27    27    31    32
Spain ..............        40    60    36    76    84    70    68    75    76
Sweden .............       113   127    74   140   153   107   112   126   139
Switzerland ........        96   112    74   140   144   137   148   170   160
United Kingdom .....        53    77    48    85    89    75    76    80    80

Trade-weighted measures 3
All 28 foreign economies .. 60    67    52    83    89    87    89    96    91
OECD 4 .................... 67    74    57    90    97    95    97   104    98
  less Mexico, Korea 5 .... 76    84    65   104   111   108   110   119   113
Europe .................... 80   101    61   117   123   112   116   130   126
European Union ............ 79   100    60   115   122   111   114   128   125
Asian NIEs ................  8    12    13    25    30    31    34    37    39
______________________________________________________________________________

1 Discontinuity in compensation costs beginning in 1989.  See Revised
Measures box.
2 Former West Germany.
3 For description of trade-weighted measures and economic groups, see technical notes.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.
Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
29 countries or areas and selected economic groups, selected years, 1975-96
__________________________________________________________________________________________

Country or area              1975   1980   1985   1990   1992   1993   1994   1995   1996
__________________________________________________________________________________________

United States ......        $6.36  $9.87 $13.01 $14.91 $16.09 $16.51 $16.87 $17.19 $17.70

Canada .............         5.96   8.67  10.94  15.84  17.03  16.44  15.85  16.04  16.66
Mexico .............         1.47   2.21   1.59   1.58   2.17   2.40   2.47   1.51   1.50

Australia ..........         5.62   8.47   8.20  13.07  13.02  12.49  14.02  15.05  16.69
Hong Kong ..........          .76   1.51   1.73   3.20   3.92   4.29   4.61   4.82   5.14
Israel .............         2.25   3.79   4.06   8.55   9.09   8.82   9.19  10.54  10.99
Japan ..............         3.00   5.52   6.34  12.80  16.34  19.14  21.29  23.78  20.84

Korea ..............          .32    .96   1.23   3.71   5.22   5.64   6.40   7.40   8.22
New Zealand ........         3.21   5.33   4.47   8.33   7.91   8.01   8.93  10.11  11.03
Singapore ..........          .84   1.49   2.47   3.78   4.95   5.25   6.29   7.33   8.32
Sri Lanka ..........          .28    .22    .28    .35    .40    .42    .45    .48    .48
Taiwan .............          .40   1.00   1.50   3.93   5.09   5.19   5.49   5.81   5.82

Austria ............         4.51   8.88   7.58  17.75  20.29  20.16  21.51  25.38  24.95
Belgium ............         6.41  13.11   8.97  19.17  22.05  21.44  23.07  26.65  25.89
Denmark ............         6.28  10.83   8.13  18.02  20.20  19.16  20.36  24.10  24.24
Finland ............         4.61   8.24   8.16  21.03  19.92  16.63  19.06  24.14  23.56

France 1 ...........         4.52   8.94   7.52  15.98  18.58  17.86  18.74  21.28  21.19
Germany 2 ..........         6.35  12.33   9.60  22.03  25.56  25.50  27.19  32.28  31.87
Greece .............         1.69   3.73   3.66   6.76   7.60   7.23   7.73   9.17   9.63
Ireland ............         3.03   5.95   5.92  11.66  13.12  11.89  12.39  13.57  13.85

Italy ..............         4.67   8.15   7.63  17.45  19.35  15.79  15.84  16.16  17.48
Luxembourg .........         6.50  12.03   7.81  16.74  19.10  18.74  20.33  23.35  22.55
Netherlands ........         6.58  12.06   8.75  18.06  20.10  20.08  20.80  24.02  23.14
Norway .............         6.77  11.59  10.37  21.47  23.03  20.21  20.97  24.38  25.03

Portugal ...........         1.58   2.06   1.53   3.77   5.17   4.50   4.60   5.37   5.58
Spain ..............         2.53   5.89   4.66  11.38  13.50  11.62  11.51  12.83  13.40
Sweden .............         7.18  12.51   9.66  20.93  24.59  17.70  18.86  21.64  24.56
Switzerland ........         6.09  11.09   9.66  20.86  23.23  22.63  24.91  29.30  28.34
United Kingdom .....         3.37   7.56   6.27  12.70  14.37  12.42  12.80  13.67  14.13

Trade-weighted measures 3
All 28 foreign economies ..  3.83   6.60   6.75  12.36  14.28  14.36  15.05  16.43  16.13
OECD 4 ....................  4.25   7.30   7.40  13.49  15.54  15.60  16.32  17.81  17.42
  less Mexico, Korea 5 ...   4.83   8.31   8.48  15.55  17.81  17.84  18.63  20.46  19.95
Europe ..................... 5.10   9.92   7.98  17.41  19.86  18.55  19.52  22.29  22.37
European Union ............. 5.04   9.85   7.87  17.20  19.67  18.34  19.25  21.95  22.06
Asian NIEs .................  .52   1.17   1.65   3.72   4.91   5.18   5.76   6.39   6.87
__________________________________________________________________________________________

1 Discontinuity in compensation costs beginning in 1989.  See Revised Measures box.
2 Former West Germany.
3 For description of trade-weighted measures and economic groups, see technical notes.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.
Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production 
workers in manufacturing, 29 countries or areas and selected economic groups, selected periods, 
1975-96
________________________________________________________________________________________________

Country or area          1975-96 1975-80 1980-85 1985-90 1990-96    1993    1994    1995    1996
________________________________________________________________________________________________

United States ......         5.0     9.2     5.7     2.8     2.9     2.6     2.2     1.9     3.0

Canada .............         5.0     7.8     4.8     7.7      .8    -3.5    -3.6     1.2     3.9
Mexico .............          .1     8.5    -6.4     -.1     -.9    10.6     2.9   -38.9     -.7

Australia ..........         5.3     8.5     -.6     9.8     4.2    -4.1    12.2     7.3    10.9
Hong Kong ..........         9.5    14.7     2.8    13.1     8.2     9.4     7.5     4.6     6.6
Israel .............         7.8    11.0     1.4    16.1     4.3    -3.0     4.2    14.7     4.3
Japan ..............         9.7    13.0     2.8    15.1     8.5    17.1    11.2    11.7   -12.4

Korea ..............        16.7    24.6     5.1    24.7    14.2     8.0    13.5    15.6    11.1
New Zealand ........         6.1    10.7    -3.5    13.3     4.8     1.3    11.5    13.2     9.1
Singapore ..........        11.5    12.1    10.6     8.9    14.1     6.1    19.8    16.5    13.5
Sri Lanka ..........         2.6    -4.7     4.9     4.6     5.4     5.0     7.1     6.7      .0
Taiwan .............        13.6    20.1     8.4    21.2     6.8     2.0     5.8     5.8      .2

Austria ............         8.5    14.5    -3.1    18.6     5.8     -.6     6.7    18.0    -1.7
Belgium ............         6.9    15.4    -7.3    16.4     5.1    -2.8     7.6    15.5    -2.9
Denmark ............         6.6    11.5    -5.6    17.3     5.1    -5.1     6.3    18.4      .6
Finland ............         8.1    12.3     -.2    20.8     1.9   -16.5    14.6    26.7    -2.4

France 1 ...........         7.6    14.6    -3.4    16.3     4.8    -3.9     4.9    13.6     -.4
Germany 2 ..........         8.0    14.2    -4.9    18.1     6.3     -.2     6.6    18.7    -1.3
Greece .............         8.6    17.2     -.4    13.1     6.1    -4.9     6.9    18.6     5.0
Ireland ............         7.5    14.4     -.1    14.5     2.9    -9.4     4.2     9.5     2.1

Italy ..............         6.5    11.8    -1.3    18.0      .0   -18.4      .3     2.0     8.2
Luxembourg .........         6.1    13.1    -8.3    16.5     5.1    -1.9     8.5    14.9    -3.4
Netherlands ........         6.2    12.9    -6.2    15.6     4.2     -.1     3.6    15.5    -3.7
Norway .............         6.4    11.4    -2.2    15.7     2.6   -12.2     3.8    16.3     2.7

Portugal ...........         6.2     5.4    -5.8    19.8     6.8   -13.0     2.2    16.7     3.9
Spain ..............         8.3    18.4    -4.6    19.6     2.8   -13.9     -.9    11.5     4.4
Sweden .............         6.0    11.7    -5.0    16.7     2.7   -28.0     6.6    14.7    13.5
Switzerland ........         7.6    12.7    -2.7    16.6     5.2    -2.6    10.1    17.6    -3.3
United Kingdom .....         7.1    17.5    -3.7    15.2     1.8   -13.6     3.1     6.8     3.4

Trade-weighted measures 3
All 28 foreign economies ..  7.4    12.5     1.0    12.8     4.6     2.1     5.0     4.6      .1
  less Mexico, Israel .....  8.2    13.0     1.7    14.1     5.2     1.3     5.2     9.0      .1
OECD 4 ....................  6.8    12.0      .1    12.4     4.1     1.9     4.3     4.0     -.6
  less Mexico, Korea 5 ....  7.1    11.8      .6    13.3     4.1      .4     4.0     8.8    -1.3
Europe ....................  7.3    14.5    -4.1    16.8     3.9    -7.4     4.7    13.0     1.2
European Union ............  7.3    14.6    -4.1    16.8     3.9    -7.6     4.5    12.7     1.4
Asian NIEs ................ 13.4    18.9     7.0    18.4    10.5     5.7    11.0    10.5     6.9
________________________________________________________________________________________________

Rates of change based on compound rate method.
1 Discontinuity in compensation costs beginning in 1989.  See Revised Measures box.
2 Former West Germany.
3 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.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.
Table 4. Hourly compensation costs in national currency for production workers in 
manufacturing, 29 countries or areas, selected years, 1975-96

_________________________________________________________________________________________

Country or area      1975    1980    1985    1990    1992    1993    1994    1995    1996
_________________________________________________________________________________________

United States  ..    6.36    9.87   13.01   14.91   16.09   16.51   16.87   17.19   17.70

Canada  .........    6.07   10.13   14.94   18.49   20.59   21.21   21.66   22.02   22.73
Mexico  .........      18      51     409    4440    6716    7.48    8.34    9.66   11.41

Australia  ......    4.30    7.43   11.70   16.74   17.71   18.37   19.16   20.32   21.31
Hong Kong  ......    3.73    7.50   13.46   24.91   30.31   33.19   35.65   37.30   39.74
Israel  .........    1.44   19.42    4.79   17.24   22.36   24.97   27.66   31.73   36.14
Japan  ..........     889    1245    1512    1856    2072    2127    2176    2235    2267

Korea  ..........     157     583    1074    2623    4075    4531    5141    5710    6610
New Zealand  ....    2.65    5.48    8.98   13.98   14.70   14.79   15.06   15.41   16.04
Singapore  ......    2.00    3.20    5.43    6.85    8.07    8.49    9.61   10.39   11.73
Sri Lanka  ......    1.97    3.58    7.58   14.05   17.51   20.20   22.32   24.45   26.49
Taiwan  .........   15.17   36.13   59.60  105.68  128.02  137.00  145.44  153.98  159.90

Austria  ........   78.46  114.78  156.75  201.07  222.93  234.70  245.38  255.87  264.22
Belgium  ........  235.10  382.88  532.39  640.60  709.06  741.27  771.23  785.47  801.77
Denmark  ........   36.00   60.98   86.18  111.56  121.96  124.27  129.43  134.98  140.59
Finland  ........   16.88   30.64   50.56   80.56   89.40   95.19   99.76  105.65  108.24

France 1 ........   19.34   37.73   67.49   87.05   98.36  101.20  103.96  106.10  108.42
Germany 2  ......   15.59   22.39   28.23   35.62   39.92   42.20   44.10   46.23   47.96
Greece  .........      55     159     506    1071    1449    1659    1876    2124    2319
Ireland  ........    1.36    2.89    5.55    7.03    7.70    8.12    8.28    8.46    8.66

Italy  ..........    3048    6966   14563   20900   23841   24845   25526   26331   26976
Luxembourg  .....     239     352     464     559     614     648     680     688     698
Netherlands  ....   16.59   23.93   29.04   32.90   35.35   37.32   37.84   38.52   39.01
Norway  .........   35.29   57.20   89.11  134.26  143.13  143.47  147.92  154.46  161.67

Portugal  .......   40.26  103.28  263.37  538.11  697.80  724.15  763.09  804.35  860.39
Spain  ..........     145     422     792    1161    1383    1481    1541    1599    1697
Sweden  .........   29.73   52.91   83.12  123.98  143.26  137.99  145.55  154.51  164.73
Switzerland  ....   15.72   18.57   23.71   29.00   32.66   33.45   34.06   34.61   35.03
United Kingdom  .    1.52    3.25    4.84    7.12    8.14    8.27    8.36    8.66    9.05
_________________________________________________________________________________________

For currency units, see note to table 6.
1 Discontinuity in compensation costs beginning in 1989.  See Revised Measures box.
2 Former West Germany.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.
Table 5. Annual percent change in hourly compensation costs in national currency for
production workers in manufacturing, 29 countries or areas and selected economic
groups, selected periods, 1975-96
________________________________________________________________________________________________

Country or area          1975-96 1975-80 1980-85 1985-90 1990-96    1993    1994    1995    1996
________________________________________________________________________________________________

United States ......         5.0     9.2     5.7     2.8     2.9     2.6     2.2     1.9     3.0

Canada .............         6.5    10.8     8.1     4.4     3.5     3.0     2.1     1.7     3.2
Mexico .............        36.0    23.2    51.6    61.1    17.0    11.4    11.5    15.8    18.1

Australia ..........         7.9    11.6     9.5     7.4     4.1     3.7     4.3     6.1     4.9
Hong Kong ..........        11.9    15.0    12.4    13.1     8.1     9.5     7.4     4.6     6.5
Israel .............        62.0    68.3   200.9    29.2    13.1    11.7    10.8    14.7    13.9
Japan ..............         4.6     7.0     4.0     4.2     3.4     2.7     2.3     2.7     1.4

Korea ..............        19.5    30.0    13.0    19.6    16.7    11.2    13.5    11.1    15.8
New Zealand ........         9.0    15.6    10.4     9.3     2.3      .6     1.8     2.3     4.1
Singapore ..........         8.8     9.9    11.2     4.8     9.4     5.2    13.2     8.1    12.9
Sri Lanka ..........        13.2    12.7    16.2    13.1    11.1    15.4    10.5     9.5     8.3
Taiwan .............        11.9    19.0    10.5    12.1     7.1     7.0     6.2     5.9     3.8

Austria ............         6.0     7.9     6.4     5.1     4.7     5.3     4.6     4.3     3.3
Belgium ............         6.0    10.2     6.8     3.8     3.8     4.5     4.0     1.8     2.1
Denmark ............         6.7    11.1     7.2     5.3     3.9     1.9     4.2     4.3     4.2
Finland ............         9.3    12.7    10.5     9.8     5.0     6.5     4.8     5.9     2.5

France 1 ...........         8.6    14.3    12.3     5.2     3.7     2.9     2.7     2.1     2.2
Germany 2 ..........         5.5     7.5     4.7     4.8     5.1     5.7     4.5     4.8     3.7
Greece .............        19.5    23.7    26.1    16.2    13.7    14.5    13.1    13.2     9.2
Ireland ............         9.2    16.3    13.9     4.8     3.5     5.5     2.0     2.2     2.4

Italy ..............        10.9    18.0    15.9     7.5     4.3     4.2     2.7     3.2     2.4
Luxembourg .........         5.2     8.1     5.7     3.8     3.8     5.5     4.9     1.2     1.5
Netherlands ........         4.2     7.6     3.9     2.5     2.9     5.6     1.4     1.8     1.3
Norway .............         7.5    10.1     9.3     8.5     3.1      .2     3.1     4.4     4.7

Portugal ...........        15.7    20.7    20.6    15.4     8.1     3.8     5.4     5.4     7.0
Spain ..............        12.4    23.8    13.4     7.9     6.5     7.1     4.1     3.8     6.1
Sweden .............         8.5    12.2     9.5     8.3     4.9    -3.7     5.5     6.2     6.6
Switzerland ........         3.9     3.4     5.0     4.1     3.2     2.4     1.8     1.6     1.2
United Kingdom .....         8.9    16.4     8.3     8.0     4.1     1.6     1.1     3.6     4.5

Trade-weighted measures 3
All 28 foreign economies .. 10.8    13.6    14.0    11.7     6.1     4.8     4.6     4.8     5.4
   less Mexico, Israel ....  7.6    12.0     8.0     6.4     4.9     4.1     3.8     3.6     3.9
OECD 4 .................... 10.2    12.7    12.3    11.7     5.8     4.5     4.0     4.5     5.1
   less Mexico, Korea 5 ...  6.5    10.5     7.3     5.0     3.8     3.2     2.6     2.7     2.8
Europe ....................  7.6    12.4     8.7     5.9     4.3     3.8     3.0     3.4     3.3
European Union ............  7.8    12.8     8.9     5.9     4.4     3.9     3.1     3.5     3.4
Asian NIEs ................ 13.4    19.6    11.6    12.9    10.4     8.2     9.8     7.6     9.4
________________________________________________________________________________________________

Rates of change based on compound rate method.
1 Discontinuity in compensation costs beginning in 1989.  See Revised Measures box.
2 Former West Germany.
3 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.
4 Organization for Economic Cooperation and Development.
5 Mexico joined the OECD in 1994 and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.
Table 6.  Exchange rates, 29 countries or areas, selected years, 1975-96
(National currency units per U.S. dollar)

__________________________________________________________________________________

Country or area       1975   1980   1985   1990   1992   1993   1994   1995   1996
__________________________________________________________________________________

United States ..     1.000  1.000  1.000  1.000  1.000  1.000  1.000  1.000  1.000

Canada .........     1.017  1.169  1.366  1.167  1.209  1.290  1.366  1.373  1.364
Mexico .........     12.50  22.97  256.9   2813   3095  3.116  3.375  6.419  7.601

Australia ......     .7647  .8772  1.428  1.281  1.360  1.471  1.367  1.350  1.277
Hong Kong ......     4.939  4.976  7.791  7.790  7.740  7.736  7.729  7.736  7.735
Israel .........     .6390  5.124  1.179  2.016  2.459  2.830  3.011  3.011  3.288
Japan ..........     296.7  225.7  238.5  145.0  126.8  111.1  102.2  93.96  108.8

Korea ..........     484.0  607.4  870.0  707.8  780.6  802.7  803.5  771.3  804.5
New Zealand ....     .8254  1.027  2.010  1.677  1.859  1.847  1.685  1.524  1.454
Singapore ......     2.371  2.141  2.200  1.813  1.629  1.616  1.527  1.417  1.410
Sri Lanka ......     7.050  16.53  27.16  40.06  43.83  48.32  49.42  51.25  55.27
Taiwan .........     38.00  36.02  39.85  26.92  25.16  26.42  26.47  26.50  27.47

Austria ........     17.40  12.93  20.68  11.33  10.99  11.64  11.41  10.08  10.59
Belgium ........     36.69  29.20  59.34  33.42  32.15  34.58  33.43  29.47  30.97
Denmark ........     5.735  5.629  10.60  6.190  6.037  6.486  6.356  5.600  5.801
Finland ........     3.665  3.719  6.197  3.830  4.487  5.725  5.234  4.376  4.595

France .........     4.282  4.220  8.980  5.447  5.294  5.667  5.546  4.986  5.116
Germany 1 ......     2.455  1.815  2.942  1.617  1.562  1.655  1.622  1.432  1.505
Greece .........     32.29  42.62  138.1  158.5  190.6  229.3  242.6  231.7  240.7
Ireland ........     .4500  .4860  .9379  .6033  .5868  .6827  .6680  .6236  .6250

Italy ..........     652.4  855.1   1909   1198   1232   1573   1611   1629   1543
Luxembourg .....     36.78  29.24  59.38  33.42  32.15  34.60  33.46  29.48  30.96
Netherlands ....     2.523  1.985  3.318  1.822  1.759  1.858  1.819  1.604  1.686
Norway .........     5.214  4.936  8.593  6.254  6.214  7.098  7.055  6.336  6.459

Portugal .......     25.45  50.05  172.1  142.7  135.1  161.1  165.9  149.9  154.3
Spain ..........     57.39  71.64  170.0  102.0  102.4  127.5  133.9  124.6  126.7
Sweden .........     4.142  4.229  8.603  5.923  5.826  7.796  7.716  7.141  6.708
Switzerland ....     2.581  1.675  2.455  1.390  1.406  1.478  1.367  1.181  1.236
United Kingdom .     .4501  .4300  .7708  .5605  .5662  .6660  .6528  .6335  .6407
__________________________________________________________________________________

1 Former West Germany. 

Note:  National currency units are: United States, dollar; Canada, dollar; 
Mexico, old peso (1975-92), new peso (1993-96); Australia, dollar; Hong
Kong, dollar; Israel, shekel (1975-84), new shekel (1985-96); Japan, yen;  
Korea, won; New Zealand, dollar; Singapore, dollar; Sri Lanka, rupee; 
Taiwan, dollar; Austria, schilling; Belgium, franc; Denmark, krone; 
Finland, markka; France, franc; Germany, mark; Greece, drachma;
Ireland, pound; Italy, lira; Luxembourg, franc; Netherlands, guilder; 
Norway,krone; Portugal, escudo; Spain, peseta; Sweden, krona;  
Switzerland, franc; United Kingdom, pound.


Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.
Table 7.  Annual percent change in exchange rates (U.S. dollars per national currency unit),
29 countries or areas and selected economic groups, selected years, 1975-96
________________________________________________________________________________________________

Country or area          1975-96 1975-80 1980-85 1985-90 1990-96    1993    1994    1995    1996
________________________________________________________________________________________________
	
United States ......           -       -       -       -       -       -       -       -       -

Canada .............        -1.4    -2.7    -3.1     3.2    -2.6    -6.3    -5.6     -.5      .7
Mexico .............       -26.3   -11.5   -38.3   -38.0   -15.3     -.7    -7.7   -47.4   -15.6

Australia ..........        -2.4    -2.7    -9.3     2.2      .1    -7.5     7.6     1.3     5.7
Hong Kong ..........        -2.1     -.1    -8.6      .0      .1     .1       .1     -.1      .0
Israel .............       -29.3   -34.1   -66.3   -10.2    -7.8   -13.1    -6.0      .0    -8.4
Japan ..............         4.9     5.6    -1.1    10.5     4.9    14.1     8.7     8.8   -13.6

Korea ..............        -2.4    -4.4    -6.9     4.2    -2.1    -2.8     -.1     4.2    -4.1
New Zealand ........        -2.7    -4.3   -12.6     3.7     2.4      .6     9.6    10.6     4.8
Singapore ..........         2.5     2.1     -.5     3.9     4.3      .8     5.8     7.8      .5
Sri Lanka ..........        -9.3   -15.7    -9.5    -7.5    -5.2    -9.3    -2.2    -3.6    -7.3
Taiwan .............         1.6     1.1    -2.0     8.2     -.3    -4.8     -.2     -.1    -3.5

Austria ............         2.4     6.1    -9.0    12.8     1.1    -5.6     2.0    13.2    -4.8
Belgium ............          .8     4.7   -13.2    12.2     1.3    -7.0     3.4    13.4    -4.8
Denmark ............         -.1      .4   -11.9    11.4     1.1    -6.9     2.0    13.5    -3.5
Finland ............        -1.1     -.3    -9.7    10.1    -3.0   -21.6     9.4    19.6    -4.8

France .............         -.8      .3   -14.0    10.5     1.1    -6.6     2.2    11.2    -2.5
Germany 1 ..........         2.4     6.2    -9.2    12.7     1.2    -5.6     2.0    13.3    -4.9
Greece .............        -9.1    -5.4   -21.0    -2.7    -6.7   -16.9    -5.5     4.7    -3.7
Ireland ............        -1.6    -1.5   -12.3     9.2     -.6   -14.0     2.2     7.1     -.2

Italy ..............        -4.0    -5.3   -14.8     9.8    -4.1   -21.7    -2.4    -1.1     5.6
Luxembourg .........          .8     4.7   -13.2    12.2     1.3    -7.1     3.4    13.5    -4.8
Netherlands ........         1.9     4.9    -9.8    12.7     1.3    -5.3     2.1    13.4    -4.9
Norway .............        -1.0     1.1   -10.5     6.6     -.5   -12.5      .6    11.3    -1.9

Portugal ...........        -8.2   -12.7   -21.9     3.8    -1.3   -16.1    -2.9    10.7    -2.9
Spain ..............        -3.7    -4.3   -15.9    10.8    -3.5   -19.7    -4.8     7.5    -1.7
Sweden .............        -2.3     -.4   -13.2     7.8    -2.1   -25.3     1.0     8.1     6.5
Switzerland ........         3.6     9.0    -7.4    12.0     2.0    -4.9     8.1    15.7    -4.4
United Kingdom .....        -1.7      .9   -11.0     6.6    -2.2   -15.0     2.0     3.0    -1.1

Trade-weighted measures 2
All 28 foreign economies..  -2.3     -.5    -9.4     2.9    -1.2    -2.6      .4      .3    -4.9
   less Mexico, Israel ...    .6     1.0    -5.8     7.3      .3    -2.6     1.3     5.3    -3.8
OECD 3 ...................  -2.4     -.3    -9.6     2.8    -1.4    -2.5      .4      .0    -5.3
   less Mexico, Korea 4 ..    .7     1.3    -6.1     7.9      .3    -2.7     1.4     5.8    -4.0
Europe ...................   -.3     2.0   -11.7    10.3     -.4   -10.9     1.7     9.2    -2.1
European Union ...........   -.4     1.7   -11.9    10.3     -.5   -11.1     1.4     8.9    -2.0
Asian NIEs ...............    .0     -.5    -4.2     4.9      .2    -2.3     1.1     2.6    -2.3
________________________________________________________________________________________________

Rates of change based on compound rate method.
1  Former West Germany.
2  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.
3  Organization for Economic Cooperation and Development.
4  Mexico joined the OECD in 1994 and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 1998.

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 Labour 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 most 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 nonsurvey years on the basis of other information 
for most countries.  The information used includes annual tabulations on 
employer social security contribution rates provided by the International 
Studies Staff of the U.S. Social Security Administration, information on 
contractual and legislated fringe benefit changes from ILO and national 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.

     For further details on survey sources and on special estimation procedures 
for some countries because of incomplete data, see International Comparisons of 
Hourly Compensation Costs for Production Workers in Manufacturing, 1995 (Report 
909, Bureau of Labor Statistics, September 1996).

Country notes 

The following are exceptions to the standard coverage and definitions explained 
above:

Australia.  Compensation relates to production workers and nonproduction workers 
other than those in managerial, executive, professional, and higher supervisory 
positions.

Hong Kong.  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.  

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.  Refers to former West Germany.  Excludes workers in establishments 
considered handicraft manufacturers.  In 1990, handicraft employment 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 country or economic groups are 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 1992 for each 
country or area and each economic group.  See table A.

     The trade data used to compute the weights are U.S. Bureau of the Census 
statistics of U.S. imports and exports converted to an industrial classification 
basis from data initially collected under the Harmonized Tariff Schedule 
commodity classification system.

     The Organization for Economic Cooperation and Development (OECD) includes 
Canada, Mexico, Australia, Japan, Korea, New Zealand, and all European 
countries.  The European Union (EU) consists of Austria, Belgium, Denmark, 
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, 
Portugal, Spain, Sweden, and the United Kingdom.  Europe includes the EU 
countries plus Norway and Switzerland.  The group labeled "Asian NIEs" consists 
of the four newly industrializing economies of Hong Kong, Korea, Singapore, and 
Taiwan.

     The trade weighted measures relate to all the countries or areas covered in 
the series.  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 28 foreign economies are computed both including and 
excluding Mexico and Israel because their rapid rates of inflation and currency 
changes in several years distort the trade-weighted averages.

Table A.  Share of total U.S. imports and exports 
of manufactured products in 1992
(in percent)

Country or area    1992       Country or area    1992 
     and          trade            and          trade 
economic group    share       economic group    share 

Canada             19.2       Greece               .1 
Mexico              7.6       Ireland              .6 
                              Italy               2.3 
Australia           1.4       Luxembourg           .1 
Hong Kong           2.0       Netherlands         1.9 
Israel               .8       Norway               .3 
Japan              15.8                               
                              Portugal             .2 
Korea               3.4       Spain                .8 
New Zealand          .3       Sweden               .8 
Singapore           2.4       Switzerland         1.0 
Sri Lanka            .1       United Kingdom      4.4 
Taiwan              4.4                               
                              Economic groups         
Austria              .3       28 foreign              
Belgium             1.5         economies        80.8 
Denmark              .3       OECD 2/            71.1 
Finland              .2       Europe             23.4 
France              3.2       European Union     22.1 
Germany 1/          5.4       Asian NIEs         12.2 

1/  Former West Germany.
2/  Organization for Economic Cooperation and Development.

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 quite wide.  In 
contrast, other countries, such as Germany and Sweden, have narrow 
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.