Internet address:  http://stats.bls.gov    USDL:  97-213
Technical information:  (202) 606-5654     For Release: 10:00 A.M. EDT
Media contact:  (202) 606-5902             Friday, June 27, 1997


INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 1996


     Hourly compensation costs for production workers in manufacturing in the United States in 1996 were 10 percent higher than the average cost level for 28 foreign economies studied by the Bureau of Labor Statistics, U.S. Department of Labor.  Costs in Europe and Japan remained above that in the United States (25 and 19 percent higher, respectively).  Costs in Japan fell below the average cost level in Europe for the first time since 1992.  A gain in hourly compensation costs in Canada brought their cost level to 94 percent of the U.S. costs.  (See charts 1 and 2 and tables 1, 2, and 3.)  Costs for manufacturing production workers in the Asian newly industrializing economies (NIEs) studied rose at a slower rate in 1996 than in the past two years, reaching about 40 percent of the U.S. level.  Labor costs in manufacturing in Mexico declined slightly in U.S. dollar terms in 1996, following a larger decrease in 1995.  Costs in Mexico are now less than 10 percent of the U.S. level.  Overall, the trade-weighted average cost level of all 28 foreign economies studied declined to 91 percent of the U.S. cost level, after reaching a record high of 95 percent in 1995.


Chart 1. Hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1975-96

PRINTED COPY CONTAINS CHART AT THIS POINT.


     The Bureau of Labor Statistics (BLS) has developed comparative measures of hourly compensation costs to provide a basis for assessing international differences in employer labor costs.  The compensation measures are computed in national currency units and are converted into U.S. dollars at prevailing commercial market currency exchange rates.

     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.

     The hourly compensation measures in this news release are based on statistics available to BLS as of May 1997.  The 1996 compensation statistics are preliminary measures; for most of the foreign countries, they are based on less than full-year data.  For further information regarding definitions, sources, and computation methods and a description of the trade-weighted measures and economic groups, see the Technical Notes.

Comparative compensation costs

     In Japan, hourly compensation costs of manufacturing production workers declined from 138 percent of the U.S. cost level in 1995 to 119 percent in 1996, while the trade-weighted average cost level in the European countries declined only 3 percentage points to 125 percent of the U.S. cost level.  Among individual European countries, relative costs remained highest in the former West Germany and Switzerland.

     Hourly compensation costs in Canada rose to 94 percent of the U.S. cost level in 1996, while the cost level in Mexico remained below 10 percent of the U.S. costs.  The trade-weighted average cost level in the Asian NIEs studied-Hong Kong, Korea, Singapore, and Taiwan-continued to rise, reaching 39 percent of U.S. costs.  Relative costs also rose in Australia and New Zealand.

     The trade-weighted average cost level for manufacturing production workers in all 28 foreign economies studied declined 4 percentage points to 91 percent of U.S. costs.

Comparative cost trends in national currencies

     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.

     In the United States, hourly compensation costs for manufacturing production workers increased 3.2 percent in 1996.  In national-currency terms, hourly compensation costs rose at the same rate in Canada; in Japan, the increase was slightly less than in the U.S.  (See table A.)

     The trade-weighted average of the wage and benefit increases in Europe was 3.8 percent in 1996; increases in individual countries ranged from less than 1 1/2 percent in the Netherlands and Switzerland to about 6 1/2 percent in Spain and Sweden.  


Chart 2. Indexes of hourly compensation costs in U.S. dollars
for production workers in manufacturing, 1996

PRINTED COPY CONTAINS CHART AT THIS POINT.


     Among the Asian NIEs, the trade-weighted average cost increase was 9.6 percent in 1996; increases in individual countries ranged widely from about 4 1/2 percent in Taiwan to 16 percent in Korea.  

     The highest cost increase in national currency-terms was the 17.9 percent increase in Mexico.  The trade-weighted average increase for all 28 foreign economies was 5.8 percent.

Cost trends in U.S. dollars

     While compensation costs in national currency in Canada and Japan rose at about the same 3 percent rate as in the United States, after adjustment for exchange rate changes, compensation costs rose slightly more (3.9 percent) in Canada and declined (-11.1 percent) in Japan.  The decline in Japan was the result of a sharp decline in the value of the yen versus the U.S. dollar.  (See tables A, 3, 5 and 7.)

     In Europe, the trade-weighted average currency exchange rate declined 2.1 percent in 1996, and hourly compensation costs measured in U.S. dollars rose 1.7 percent.  Currency exchange rates rose relative to the U.S. dollar only in Italy and Sweden, and their compensation costs in U.S. dollars showed the largest European cost increases.  In contrast, after adjustment for currency exchange rates, hourly compensation costs declined 3 percent or more in Belgium, the Netherlands, and Switzerland.

     In Mexico, hourly compensation costs in U.S. dollars were essentially unchanged from 1995 to 1996 because the decline in the U.S. dollar value of the peso offset the national compensation cost increase.

     Among the Asian NIEs, currency exchange rates declined in Korea and Taiwan and remained essentially unchanged from 1995 levels in Hong Kong and Singapore.  For Taiwan, the exchange rate decline offset most of the moderate cost increase in national currency, and hourly compensation costs in U.S. dollars rose less than 1 percent.  In the other NIE economies, hourly compensation costs in U.S. dollars rose from 6 1/2 percent in Hong Kong to 13 1/2 percent in Singapore, and the trade-weighted average cost increase was 7.1 percent.

     In the other Pacific Rim economies of Australia and New Zealand, while hourly compensation measured in national currency rose at less than half the average rate for the Asian NIEs, their currency exchange rates rose in 1996 and their hourly compensation costs measured in U.S. dollars increased about 10 percent-higher than the NIE average.

     For all 28 foreign economies, the average exchange rate decline of 4.9 percent offset most of the average compensation cost increase of 5.8 percent measured in national currency terms.


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                  3.2            -          3.2  
Canada                         3.2           .7          3.9  
Mexico                        17.9        -15.6          -.7  

Australia                      4.0          5.7         10.0  
Hong Kong                      6.5           .0          6.6  
Israel                        13.8         -8.4          4.2  
Japan                          3.0        -13.6        -11.1  
Korea                         16.0         -4.1         11.2  
New Zealand                    4.1          4.8          9.1  
Singapore                     12.9           .5         13.5  
Sri Lanka                        -            -            -  
Taiwan                         4.3         -3.5           .7  

Austria                        3.3         -4.8         -1.7  
Belgium                        1.9         -4.8         -3.0  
Denmark                        4.1         -3.5           .5  
Finland                        3.4         -4.8         -1.5  
France                         2.6         -2.5           .0  
Germany 1                      5.2         -4.9           .1  
Greece                           -            -            -  
Ireland                        2.3          -.2          2.1  

Italy                          3.7          5.6          9.4  
Luxembourg                       -            -            -  
Netherlands                    1.4         -4.9         -3.5  
Norway                         4.4         -1.9          2.3  
Portugal                         -            -            -  
Spain                          6.4         -1.7          4.6  
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 2
All 28 foreign economies       5.8         -4.9           .5  
OECD 3                         5.6         -5.3          -.2  
  less Mexico, Korea 4         3.4         -4.0          -.8  
Europe                         3.8         -2.1          1.7  
European Union                 3.9         -2.0          1.9  
Asian NIEs                     9.6         -2.3          7.1  

Dash means data not available.
1  Germany refers to the former West Germany.
2  The 1995-96 percent changes for the trade weighted measures are based upon the changes for the 24 countries or areas for which 1996 data are available.
3  OECD refers to the Organization for Economic Cooperation and Development.
4  Mexico joined the OECD in 1994 and Korea joined in 1996.


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), 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.


-1-


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       93
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      101      115      125      138      119

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        -
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      138      131      138      156      147
Denmark                             99      110       62      120      124      116      121      141      137
Finland                             72       83       63      141      124      101      113      144      138

France                              71       91       58      102      105       98      101      113      109
Germany 1                          100      125       74      147      158      154      159      185      180
Greece                              27       38       28       45       46       43       45       52        -
Ireland                             48       60       46       79       83       73       75       80       80

Italy                               73       83       59      119      122       97       95       96      102
Luxembourg                         100      121       59      110      117      112      119      134        -
Netherlands                        103      122       67      123      126      121      124      141      132
Norway                             106      117       80      144      143      122      124      142      141

Portugal                            25       21       12       25       32       27       27       31        -
Spain                               40       60       36       76       83       70       68       74       75
Sweden                             113      127       74      140      153      107      112      126      138
Switzerland                         96      112       74      140      144      137      148      170      160
United Kingdom                      53       77       48       85       90       76       76       80       80

Trade-weighted measures 2
All 28 foreign economies            60       67       52       83       88       86       89       95       91
OECD 3                              67       74       57       90       96       94       96      103       98
  less Mexico, Korea 4              76       84       65      104      110      107      110      118      112
Europe                              80      101       61      116      122      111      114      128      125
European Union                      79      100       60      115      121      110      113      126      124
Asian NIEs                           8       12       13       25       30       31       34       37       39


Dash means data not available.
1  Former West Germany.
2  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, June 1997.
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   $17.74

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    16.55
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    10.98
Japan                             3.00     5.52     6.34    12.80    16.28    19.01    21.07    23.66    21.04

Korea                              .32      .96     1.23     3.71     5.22     5.64     6.40     7.40     8.23
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        -
Taiwan                             .40     1.00     1.50     3.93     5.09     5.19     5.49     5.82     5.86

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    19.22    22.23    21.62    23.25    26.88    26.07
Denmark                           6.28    10.83     8.13    17.96    20.02    19.11    20.40    24.26    24.38
Finland                           4.61     8.24     8.16    21.03    19.92    16.63    19.06    24.83    24.45

France                            4.52     8.94     7.52    15.23    16.89    16.23    17.04    19.34    19.34
Germany 1                         6.35    12.33     9.60    21.96    25.40    25.36    26.90    31.85    31.87
Greece                            1.69     3.73     3.66     6.71     7.46     7.02     7.51     8.90        -
Ireland                           3.03     5.95     5.92    11.76    13.37    12.12    12.63    13.83    14.12

Italy                             4.67     8.15     7.63    17.74    19.60    16.00    16.10    16.52    18.08
Luxembourg                        6.35    11.98     7.72    16.37    18.85    18.49    20.06    23.12        -
Netherlands                       6.58    12.06     8.75    18.29    20.34    20.05    20.92    24.18    23.33
Norway                            6.77    11.59    10.37    21.47    23.03    20.21    20.97    24.38    24.95

Portugal                          1.58     2.06     1.53     3.77     5.17     4.50     4.60     5.37        -
Spain                             2.53     5.89     4.66    11.33    13.37    11.50    11.39    12.70    13.29
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    12.71    14.44    12.47    12.86    13.73    14.19

Trade-weighted measures 2
All 28 foreign economies          3.83     6.60     6.75    12.34    14.21    14.27    14.94    16.32    16.13
OECD 3                            4.25     7.30     7.40    13.47    15.46    15.50    16.19    17.69    17.41
  less Mexico, Korea 4            4.83     8.31     8.48    15.52    17.72    17.72    18.48    20.32    19.95
Europe                            5.10     9.92     7.98    17.34    19.66    18.33    19.28    22.01    22.22
European Union                    5.04     9.85     7.87    17.13    19.45    18.11    19.00    21.65    21.91
Asian NIEs                         .52     1.17     1.65     3.72     4.91     5.18     5.76     6.39     6.89


Dash means data not available.
1  Former West Germany.
2  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, June 1997.
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      3.2

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      4.0     -4.1     12.2      7.3     10.0
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      4.2
Japan                              9.7     13.0      2.8     15.1      8.6     16.8     10.8     12.3    -11.1

Korea                             16.7     24.6      5.1     24.7     14.2      8.0     13.5     15.6     11.2
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                       1/ 2.7     -4.7      4.9      4.6        -      5.0      7.1      6.7        -
Taiwan                            13.6     20.1      8.4     21.2      6.9      2.0      5.8      6.0       .7

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     16.5      5.2     -2.7      7.5     15.6     -3.0
Denmark                            6.7     11.5     -5.6     17.2      5.2     -4.5      6.8     18.9       .5
Finland                            8.3     12.3      -.2     20.8      2.5    -16.5     14.6     30.3     -1.5

France                             7.2     14.6     -3.4     15.2      4.1     -3.9      5.0     13.5       .0
Germany 2                          8.0     14.2     -4.9     18.0      6.4      -.2      6.1     18.4       .1
Greece                          1/ 8.7     17.2      -.4     12.9        -     -5.9      7.0     18.5        -
Ireland                            7.6     14.4      -.1     14.7      3.1     -9.3      4.2      9.5      2.1

Italy                              6.7     11.8     -1.3     18.4       .3    -18.4       .6      2.6      9.4
Luxembourg                      1/ 6.7     13.5     -8.4     16.2        -     -1.9      8.5     15.3        -
Netherlands                        6.2     12.9     -6.2     15.9      4.1     -1.4      4.3     15.6     -3.5
Norway                             6.4     11.4     -2.2     15.7      2.5    -12.2      3.8     16.3      2.3

Portugal                        1/ 6.3      5.4     -5.8     19.8        -    -13.0      2.2     16.7        -
Spain                              8.2     18.4     -4.6     19.4      2.7    -14.0     -1.0     11.5      4.6
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      1.9    -13.6      3.1      6.8      3.4

Trade-weighted measures 3
All 28 foreign economies           7.4     12.5      1.0     12.8      4.7      2.0      4.9      4.7       .5
    less Mexico, Israel            8.2     13.0      1.7     14.1      5.2      1.2      5.1      9.2       .6
OECD 4                             6.8     12.0       .1     12.3      4.1      1.8      4.2      4.1      -.2
  less Mexico, Korea 5             7.1     11.8       .6     13.2      4.2       .3      3.9      8.9      -.8
Europe                             7.2     14.5     -4.1     16.7      3.9     -7.5      4.7     13.0      1.7
European Union                     7.2     14.6     -4.1     16.7      3.8     -7.7      4.5     12.8      1.9
Asian NIEs                        13.4     18.9      7.0     18.4     10.6      5.7     11.0     10.5      7.1


Rates of change based on compound rate method.
Dash means data not available.
1  1975-95.
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, June 1997.
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    17.74

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    11.39

Australia                         4.30     7.43    11.70    16.74    17.71    18.37    19.16    20.32    21.13
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    36.10
Japan                              889     1245     1512     1856     2065     2112     2154     2223     2289

Korea                              157      583     1074     2623     4075     4531     5141     5710     6624
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        -
Taiwan                           15.17    36.13    59.60   105.68   128.02   137.00   145.44   154.26   160.87

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   642.30   714.70   747.53   777.32   792.10   807.26
Denmark                          36.00    60.98    86.18   111.18   120.84   123.96   129.64   135.86   141.40
Finland                          16.88    30.64    50.56    80.56    89.40    95.19    99.76   108.64   112.35

France                           19.34    37.73    67.49    82.97    89.41    91.98    94.48    96.45    98.96
Germany 1                        15.59    22.39    28.23    35.50    39.67    41.96    43.63    45.61    47.96
Greece                              55      159      506     1064     1422     1610     1821     2062        -
Ireland                           1.36     2.89     5.55     7.10     7.85     8.27     8.43     8.62     8.82

Italy                             3048     6966    14563    21258    24146    25175    25943    26911    27894
Luxembourg                         233      350      458      547      606      640      671      682        -
Netherlands                      16.59    23.93    29.04    33.32    35.78    37.25    38.06    38.79    39.33
Norway                           35.29    57.20    89.11   134.26   143.13   143.47   147.92   154.46   161.18

Portugal                         40.26   103.28   263.37   538.11   697.80   724.15   763.09   804.35        -
Spain                              145      422      792     1156     1369     1466     1525     1582     1684
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     7.13     8.17     8.31     8.40     8.70     9.09


Dash means data not available.
For currency units, see note to table 6.
1  Former West Germany.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
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      3.2

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     17.9

Australia                          7.9     11.6      9.5      7.4      4.0      3.7      4.3      6.1      4.0
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     13.8
Japan                              4.6      7.0      4.0      4.2      3.6      2.3      2.0      3.2      3.0

Korea                             19.5     30.0     13.0     19.6     16.7     11.2     13.5     11.1     16.0
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                      1/ 13.4     12.7     16.2     13.1        -     15.4     10.5      9.5        -
Taiwan                            11.9     19.0     10.5     12.1      7.3      7.0      6.2      6.1      4.3

Austria                            6.0      7.9      6.4      5.1      4.7      5.3      4.6      4.3      3.3
Belgium                            6.1     10.2      6.8      3.8      3.9      4.6      4.0      1.9      1.9
Denmark                            6.7     11.1      7.2      5.2      4.1      2.6      4.6      4.8      4.1
Finland                            9.4     12.7     10.5      9.8      5.7      6.5      4.8      8.9      3.4

France                             8.1     14.3     12.3      4.2      3.0      2.9      2.7      2.1      2.6
Germany 2                          5.5      7.5      4.7      4.7      5.1      5.8      4.0      4.5      5.2
Greece                         1/ 19.9     23.9     26.0     16.1        -     13.2     13.1     13.2        -
Ireland                            9.3     16.3     13.9      5.0      3.7      5.4      1.9      2.3      2.3

Italy                             11.1     18.0     15.9      7.9      4.6      4.3      3.1      3.7      3.7
Luxembourg                     1/  5.5      8.5      5.5      3.6        -      5.6      4.8      1.6        -
Netherlands                        4.2      7.6      3.9      2.8      2.8      4.1      2.2      1.9      1.4
Norway                             7.5     10.1      9.3      8.5      3.1       .2      3.1      4.4      4.4

Portugal                       1/ 16.2     20.7     20.6     15.4        -      3.8      5.4      5.4        -
Spain                             12.4     23.8     13.4      7.9      6.5      7.1      4.0      3.7      6.4
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      8.1      4.1      1.7      1.1      3.6      4.5

Trade-weighted measures 3
All 28 foreign economies          10.8     13.6     14.0     11.7      6.2      4.8      4.5      4.9      5.8
    less Mexico, Israel            7.6     12.0      8.0      6.3      4.9      4.0      3.7      3.7      4.4
OECD 4                            10.2     12.7     12.3     11.7      5.8      4.4      4.0      4.7      5.6
  less Mexico, Korea 5             6.5     10.5      7.3      5.0      3.8      3.1      2.5      2.9      3.4
Europe                             7.6     12.4      8.7      5.8      4.3      3.7      3.0      3.5      3.8
European Union                     7.7     12.8      8.9      5.9      4.3      3.8      3.1      3.5      3.9
Asian NIEs                        13.4     19.6     11.6     12.9     10.4      8.2      9.8      7.6      9.6


Rates of change based on compound rate method.
Dash means data not available.
1  1975-95.
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, June 1997.
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        -
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        -
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        -
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        -
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 (1993-95); Australia, dollar; Hong Kong, dollar; Israel, shekel (1975-84), new shekel (1985-95);
Japan, yen; Korea, won; New Zealand, dollar; Singapore, dollar; Sri Lanka, rupee; Taiwan, dollar;
Austria, shilling; Belgium, franc; Denmark, krone; Finland, markkaa; France,    franc; Germany, mark;
Greece, drachma; Ireland, pound, Italy, lira; Luxembourg, franc; Netherlands, guilder; Norway, krone;
Portugal, escuado; Spain, peseta; Sweden, krona; Switzerland, franc; United Kingdom, pound.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, June 1997.
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                      1/ -9.4    -15.7     -9.5     -7.5        -     -9.3     -2.2     -3.6        -
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 2                          2.4      6.2     -9.2     12.7      1.2     -5.6      2.0     13.3     -4.9
Greece                         1/ -9.4     -5.4    -21.0     -2.7        -    -16.9     -5.5      4.7        -
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                     1/  1.1      4.7    -13.2     12.2        -     -7.1      3.4     13.5        -
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                       1/ -8.5    -12.7    -21.9      3.8        -    -16.1     -2.9     10.7        -
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 3
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     -3.7
OECD 4                            -2.4      -.3     -9.6      2.8     -1.4     -2.5       .4       .0     -5.3
  less Mexico, Korea 5              .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  1975-95.
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, June 1997.
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.