Internet address:  http://www.bls.gov/fls  USDL: 06-2020
Technical information:  (202) 691-5654     For Release: 10:00 A.M. EST
Media contact: (202) 691-5902              Thursday, November 30, 2006

INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 2005

    Average hourly compensation costs in U.S. dollars for production 
workers in manufacturing among 32 foreign economies were 80 percent 
of the U.S. level in 2005, virtually unchanged from 79 percent in 
2004, according to data issued by the Bureau of Labor Statistics, 
U.S. Department of Labor. Compensation costs relative to the United 
States rose or remained unchanged in 21 of the economies covered in 
2005.  (See table 1.)  Data for Poland, a relatively low labor cost 
country, are included in this release for the first time.  A note 
on China's labor costs appears on page 5 of this release.

    In the United States, hourly compensation costs for production 
workers in manufacturing increased 3.6 percent in 2005, to $23.65.  
When measured in national currency terms, trade-weighted average 
costs increased 2.9 percent in the combined 32 foreign economies in 
2005.  This was less than the increase in the United States, but 
the value of foreign currencies rose 3.1 percent against the U.S. 
dollar, resulting in a rise in hourly compensation costs in the 
foreign economies of 6.1 percent on a U.S. dollar basis. (See chart 
1 and table A.) 


Chart 1.  Hourly compensation costs in U.S. dollars for
	  production workers in manufacturing, 1975-2005

PRINTED COPY CONTAINS CHART AT THIS POINT.



                                 -2-

Compensation costs expressed in U.S. dollars

    This release provides manufacturing compensation data in terms 
of both national currencies and U.S. dollars.  While data on a 
national currency basis show underlying wage and benefit trends 
within each country, frequent and sometimes sharp changes in 
currency exchange rates can have a large impact on compensation 
costs on a U.S. dollar basis.  Data on a U.S. dollar basis are 
calculated by dividing compensation costs in the national currency 
by the exchange rate (expressed as national currency units per U.S. 
dollar).  Compensation costs on a U.S. dollar basis are often used 
as indicators of competitiveness of manufactured goods in world 
trade and are the focus of the following discussion.

    Compensation costs for production workers in manufacturing 
measured in U.S. dollars continued to rise in 2005 in most of the 
foreign economies-with only one country, Japan, showing a decrease 
in costs.  The rate of compensation increase in a trade-weighted 
average of the 32 foreign economies was 6.1 percent in 2005, above 
the 5.7 percent historical average for the series. (See table A and 
table 3.)

Chart 2. Indexes of hourly compensation costs in U.S. dollars
         for production workers in manufacturing, 2005

PRINTED COPY CONTAINS CHART AT THIS POINT.

    Although average costs in the United States continued to be 
higher than those in most of the economies covered outside of 
Europe, 12 of the European countries had higher hourly compensation 
costs than the United States, in a few cases more than 40 percent 
higher.  With the value of the Euro remaining virtually unchanged 
against the U.S. dollar in 2005 (+0.1 percent), European labor 
costs measured in U.S. dollars showed much weaker growth than in 
the previous three years.  Fifteen of the nineteen European 
countries for which data are available recorded annual growth rates 
in hourly compensation costs of between 1.0 and 4.5 percent in 
2005.  This is in contrast with the 2002 to 2004 period, when most 
European countries exhibited double-digit growth.  The only 



                                 -3-

European countries to have double-digit growth in hourly 
compensation costs on a U.S. dollar basis in 2005 were the Czech 
Republic and Poland (12.1 and 17.9 percent, respectively), both of 
which also experienced strong appreciation of their national 
currencies.  

    Compensation costs in Europe, on average, continued to be almost 
$4 higher on a per hour basis than in the United States.  However, 
there is great variation in the level of compensation costs among 
the European countries covered.  For example, hourly compensation 
costs in Europe ranged from $4.54 in Poland to more than eight 
times that level in Norway ($39.14), the highest labor cost country 
in these comparisons. (See table 2.)

    Outside of Europe, annual percent changes in manufacturing 
compensation costs measured in U.S. dollars varied considerably in 
2005.  Hourly compensation costs in Brazil and the Republic of 
Korea continued to grow strongly in 2005 (29.9 and 21.8 percent, 
respectively), boosted by an appreciation of the Brazilian real and 
Korean won against the U.S. dollar.  Japan was the only country in 
these comparisons to show a decrease in hourly compensation costs 
measured in U.S. dollars (-0.4 percent), despite an increase in 
costs on a national currency basis, due to the depreciation of the 
Japanese yen against the U.S. dollar.

BOX: A note on the measures

	The hourly compensation costs measures in this news release 
are based on statistics available to BLS as of September 2006.  These
measures are prepared specifically for international comparisons of 
employer labor costs in manufacturing.  The methods used, as well as 
the results, differ somewhat from those of other BLS series on U.S. 
compensation costs.

	See the Technical Notes for further information regarding 
definitions, sources, and computation methods, as well as a 
description of the trade-weighted measures for economic groups.

	The data for some countries may have been revised in later 
updates to reflect new or revised data provided to BLS subsequent 
to this news release. See Hourly Compensation Costs for Production 
Workers in Manufacturing, 33 Countries or Areas, 22 Manufacturing 
Industries at http://www.bls.gov/fls/flshcindnaics.htm for the most 
recent data.

END OF BOX: A note on the measures 

Exchange rates

	The trade-weighted 3.1 percent increase in the value of the 
currencies of the 32 foreign economies against the U.S. dollar was 
the smallest increase since 2002 (0.4 percent), but well above the 
average annual change since 1975 (-3.4 percent).  The currencies of 
most economies appreciated in 2005, while the currencies of only 
six countries-Denmark, Israel, Japan, Sweden, Switzerland, and the 
United Kingdom-depreciated against the dollar. (See table 5.)  
	The movements of the foreign currencies relative to the U.S. 
dollar in 2005 had an influence on hourly manufacturing 
compensation costs measured in U.S. dollars.  Hourly compensation 
costs on a national currency basis in the 32 foreign economies rose 
2.9 percent, less than in the United States.  When adjusted for the 
appreciation of the foreign currencies against the U.S. dollar, 
those costs increased 6.1 percent, higher than in the United States. 


                                 -4-

Table A. Hourly compensation costs, in national currency and in U.S. 
dollars, for production workers in manufacturing and exchange rates 
(U.S. dollars per national currency unit)

Percent change, 2004-2005

                          Hourly                 Hourly
Country                compensation,          compensation,
or area                  national    Exchange     U.S.
                         currency     Rates     dollars
        
Americas        
  United States             3.6          -        3.6
  Brazil                    8.1       20.2       29.9
  Canada                    1.9        7.4        9.4
  Mexico                    4.1        3.7        7.9
               
Asia and Oceania
  Australia                 2.9        3.6        6.5
  Hong Kong SAR (1)         2.4         .1        2.6
  Israel                    3.6        -.1        3.5
  Japan                     1.4       -1.7        -.4
  Korea                     8.9       11.8       21.8
  New Zealand               3.4        6.1        9.7
  Singapore                 2.2        1.6        3.8
  Sri Lanka                   -          -          -
  Taiwan                    2.8        3.9        6.8
           
Europe
  Austria                   3.0         .1        3.1
  Belgium                   2.5         .1        2.6
  Czech Republic            4.5        7.3       12.1
  Denmark                   3.0        -.1        2.9
  Finland                   4.0         .1        4.1
  France                    3.0         .1        3.1
  Germany                   1.4         .1        1.5
  Greece                      -          -          -
  Hungary		    6.2	       1.6	  7.8
  Ireland                   3.6         .1        3.7
  Italy                     2.7         .1        2.8
  Luxembourg                4.1         .1        4.2
  Netherlands               3.3         .1        3.4
  Norway                    2.7        4.6        7.5
  Poland                    4.3       13.0       17.9
  Portugal                  4.4         .1        4.5
  Spain                     3.7         .1        3.8
  Sweden                    2.8       -1.6        1.1
  Switzerland               1.2        -.2        1.0
  United Kingdom            4.3        -.6        3.6
           
Trade-weighted measures (2)   
  All foreign economies     2.9        3.1        6.1
  OECD (3)                  2.9        3.2        6.2
  Europe                    2.9        -.1        2.8
  Asian NIEs                5.0        6.0       11.5


1 Hong Kong Special Administrative Region of China.
2 The 2004-2005 percent changes for the trade-weighted measures are 
based upon the changes for the countries or areas for which 2005 
data are available.   
3 OECD refers to the Organization for Economic Cooperation and 
Development.



                                 -5-

BOX: China

     Acknowledging the importance of China as one of the United 
States' largest trading partners, BLS is including data for China in 
this release for the first time.  Due to data limitations, data are 
presented separately and only for 2002-2004.

     The compensation costs data presented for China are not 
directly comparable with the data for other countries found in this 
release.  China's data refer to all employees while data for other 
countries only refer to production workers.  Since non-production 
workers in manufacturing often are compensated at higher rates than 
their production worker counterparts, the inclusion of non-
production workers in China's data may affect comparability with 
other countries.  In addition, it is likely that certain groups of 
workers are not fully captured in the annual administrative data 
published by China's National Bureau of Statistics, specifically 
migrant workers and workers employed in small-scale and private 
enterprises and the informal sector.
 
     Data for 2002 are from Judith Banister's August 2005 article in 
the Monthly Labor Review, found on the BLS website at 
http://www.bls.gov/opub/mlr/2005/08/art3full.pdf.  In general, the 
methods used to update the hourly compensation costs estimates to 
2003 and 2004 are the same as the methods used in the Banister 
article.  A more detailed explanation and analysis of the 2003 and 
2004 data for China will be available in a forthcoming article in 
the November 2006 issue of the Monthly Labor Review.

China: Hourly Compensation Costs for All Employees in 
Manufacturing, 2002-2004


               National           U.S.           Index	
Year           Currency           Dollar         (United 
               Basis              Basis          States
               (Yuan)             (US$)          =100)

2002           4.73               0.57           3
2003           5.17               0.62           3
2004           5.50               0.67           3


END OF BOX: China

The effect that exchange rate changes can have on hourly 
compensation costs is particularly evident when comparing the labor 
costs of Canada with those of the United States.  On a national 
currency basis, the increase in hourly compensation costs in Canada 
(1.9 percent) was less than the increase in the United States (3.6 
percent).  When adjusted for changes in exchange rates, however, 
the increase in costs on a U.S. dollar basis was significantly 
higher in Canada than in the United States (9.4 percent versus 3.6 
percent). 

Additional data available

	In addition to the compensation cost measures covered in this 
news release, supplementary tables are available for comparative 
levels of hourly compensation costs, hourly direct pay, pay for 
time worked, and the structure of compensation for production 
workers in manufacturing for all years from 1975 through 2005.  
Data also are available for national currency hourly compensation 
and exchange rates from 1975 through 2005 in the supplementary 
tables (http://www.bls.gov/fls). 


                                 -6-

	BLS also computes comparative measures for 22 component 
manufacturing industries.  Data for the component industries are 
not included in this release; in general, the data limitations for 
the component industries are greater than for total manufacturing.  
Data are available upon request and via the Internet 
(http://www.bls.gov/fls).  The data for component industries 
currently are available on a North American Industry Classification 
System (NAICS) basis from 1992 to 2004. 

	For further information, contact the Office of Productivity and 
Technology by phone at 202-691-5654, by e-mail at flshc@bls.gov, or 
by mail at Bureau of Labor Statistics, 2 Massachusetts Avenue, NE, 
Room 2150, Washington, DC 20212.

    Information in this release will be made available to sensory 
impaired individuals upon request.  Voice phone:  202-691-5200; TDD 
message referral phone:  1-800-877-8339.

    This material is in the public domain and, with appropriate 
credit, may be reproduced without permission.  It may be translated 
into foreign languages without permission, with a separate credit 
for the translation. 
    

                                                     -12-

   Table 1. Indexes of hourly compensation costs for production workers in manufacturing,
   33 countries or areas and selected economic groups, selected years, 1975-2005


   Country or area                 1975    1980    1985    1990    1995    2000    2002    2003    2004    2005


   Americas
   United States.............       100     100     100     100     100     100     100     100     100     100
   Brazil....................         -       -       -       -       -      18      12      12      14      17
   Canada....................        99      92      88     110      96      84      78      88      95     101
   Mexico....................        24      23      12      11      10      11      12      11      11      11

   Asia and Oceania
   Australia.................        91      88      64      88      89      73      72      89     102     105
   Hong Kong SAR (1).........        12      16      14      22      28      28      27      25      24      24
   Israel....................        33      35      29      52      55      58      52      52      53      53
   Japan.....................        48      57      49      85     137     112      87      91      96      92
   Korea, Republic of........         5      10      10      25      42      42      41      44      49      57
   New Zealand...............        53      56      36      57      60      43      43      53      60      63
   Singapore.................        13      16      20      25      44      37      31      32      32      32
   Sri Lanka.................         5       2       2       2       3       2       2       2       2       -
   Taiwan....................         6      11      12      26      35      32      26      26      26      27

   Europe
   Austria...................        73      92      60     121     147      97      97     115     125     124
   Belgium...................        94     122      65     121     149     102     102     120     132     130
   Czech Republic............         -       -       -       -      15      14      18      21      24      26
   Denmark...................       101     112      64     124     147     111     114     136     151     150
   Finland...................        75      86      65     143     142      99     102     122     134     135
   France....................        73      92      59     104     112      79      80      95     105     104
   Germany...................         -       -       -       -     175     115     114     134     142     140
   Greece....................        27      39      29      46      53       -       -       -       -       -
   Hungary...................         -       -       -       -      16      14      18      21      25      26
   Ireland...................        50      63      47      79      80      65      72      86      96      96
   Italy.....................        75      84      60     117      91      70      69      82      90      89
   Luxembourg................       101     120      59     108     137      89      88     104     116     117
   Netherlands...............       107     125      69     121     140      98     104     124     135     135
   Norway....................       112     123      82     147     145     115     131     147     160     166
   Poland....................         -       -       -       -       -      14      15      16      17      19
   Portugal..................        25      21      12      24      30      23      24      28      31      31
   Spain.....................        41      61      36      76      74      54      56      68      75      75
   Sweden....................       116     129      76     140     126     103      95     113     125     121
   Switzerland...............        98     114      75     139     168     107     111     125     132     129
   United Kingdom............        54      78      49      85      80      86      86      96     109     109

   Trade-weighted measures (2)
   All foreign economies (3).        62      67      52      80      87      70      65      73      79      80
   OECD (3,4)................        67      73      56      85      92      74      70      79      85      86
   Europe (3)................        79      99      61     113     123      90      91     107     117     116
   European Union-15 (5).....        78      98      60     112     123      91      92     107     118     116
   Asian NIEs (6)............         8      12      13      25      39      36      33      34      36      39

   Dash means data not available.
   (1) Hong Kong Special Administrative Region of China.
   (2) For a description of trade-weighted measures and economic groups, see the Technical
       Notes preceding these tables.
   (3) Data for the Czech Republic for 1975-1994, for Hungary for 1975-1993, and for Poland
       1975-1996 are not included.
   (4) Organization for Economic Cooperation and Development.
   (5) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (6) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.


                                                     -13-

   Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
   33 countries or areas and selected economic groups, selected years, 1975-2005


   Country or area                 1975    1980    1985    1990    1995    2000    2002    2003    2004    2005


   Americas
   United States.............      6.16    9.63   12.71   14.81   17.17   19.65   21.33   22.20   22.82   23.65
   Brazil....................         -       -       -       -       -    3.50    2.57    2.74    3.15    4.09
   Canada....................      6.11    8.87   11.20   16.33   16.50   16.48   16.72   19.53   21.77   23.82
   Mexico....................      1.46    2.20    1.59    1.57    1.70    2.07    2.49    2.44    2.44    2.63

   Asia and Oceania
   Australia.................      5.60    8.44    8.18   13.09   15.36   14.40   15.38   19.79   23.38   24.91
   Hong Kong SAR (1).........      0.75    1.50    1.73    3.22    4.80    5.45    5.66    5.54    5.51    5.65
   Israel....................      2.02    3.41    3.65    7.69    9.41   11.41   11.00   11.62   12.01   12.42
   Japan.....................      2.97    5.46    6.27   12.59   23.47   21.93   18.60   20.26   21.84   21.76
   Korea, Republic of........      0.32    0.95    1.23    3.70    7.28    8.23    8.77    9.69   11.13   13.56
   New Zealand...............      3.28    5.44    4.55    8.48   10.35    8.38    9.10   11.69   13.65   14.97
   Singapore.................      0.83    1.53    2.52    3.74    7.57    7.18    6.71    7.18    7.38    7.66
   Sri Lanka.................      0.28    0.22    0.28    0.35    0.48    0.48    0.49    0.51    0.52       -
   Taiwan....................      0.38    1.03    1.51    3.91    5.99    6.19    5.64    5.69    5.98    6.38

   Europe
   Austria...................      4.50    8.87    7.57   17.91   25.26   19.14   20.71   25.51   28.53   29.42
   Belgium...................      5.77   11.74    8.21   17.85   25.67   20.13   21.77   26.55   30.01   30.79
   Czech Republic............         -       -       -       -    2.63    2.83    3.83    4.72    5.45    6.11
   Denmark...................      6.24   10.77    8.10   18.35   25.28   21.87   24.31   30.22   34.46   35.47
   Finland...................      4.63    8.30    8.20   21.15   24.31   19.44   21.78   27.10   30.67   31.93
   France....................      4.50    8.90    7.48   15.36   19.26   15.46   17.13   21.14   23.89   24.63
   Germany...................         -       -       -       -   30.10   22.67   24.22   29.64   32.50   33.00
   Greece....................      1.69    3.73    3.67    6.82    9.07       -       -       -       -       -
   Hungary...................         -       -       -       -    2.69    2.79    3.92    4.76    5.63    6.07
   Ireland...................      3.06    6.02    6.00   11.77   13.75   12.72   15.26   19.09   21.94   22.76
   Italy.....................      4.64    8.09    7.56   17.28   15.69   13.84   14.75   18.11   20.48   21.05
   Luxembourg................      6.22   11.51    7.48   16.00   23.56   17.51   18.71   23.12   26.57   27.68
   Netherlands...............      6.58   12.05    8.73   17.98   24.03   19.33   22.12   27.47   30.76   31.81
   Norway....................      6.90   11.80   10.47   21.76   24.84   22.56   27.93   32.73   36.41   39.14
   Poland....................         -       -       -       -       -    2.81    3.29    3.52    3.85    4.54
   Portugal..................      1.52    1.98    1.46    3.59    5.09    4.49    5.07    6.24    7.02    7.33
   Spain.....................      2.52    5.86    4.64   11.30   12.70   10.65   11.95   15.01   17.14   17.78
   Sweden....................      7.14   12.44    9.61   20.81   21.68   20.18   20.23   25.19   28.42   28.73
   Switzerland...............      6.03   10.96    9.55   20.63   28.90   20.95   23.77   27.78   30.21   30.50
   United Kingdom............      3.35    7.52    6.22   12.61   13.79   16.84   18.36   21.33   24.76   25.66

   Trade-weighted measures (2)
   All foreign economies (3).      3.82    6.49    6.61   11.83   14.99   13.66   13.90   16.19   17.95   18.89
   OECD (3,4)................      4.13    7.00    7.08   12.62   15.85   14.59   14.92   17.47   19.43   20.43
   Europe (3)................      4.87    9.49    7.72   16.80   21.19   17.77   19.48   23.70   26.62   27.33
   European Union-15 (5).....      4.80    9.40    7.61   16.58   21.07   17.89   19.53   23.83   26.81   27.52
   Asian NIEs (6)............      0.49    1.15    1.62    3.71    6.62    7.06    7.04    7.49    8.16    9.28

   Dash means data not available.
   (1) Hong Kong Special Administrative Region of China.
   (2) For a description of trade-weighted measures and economic groups, see the Technical
       Notes preceding these tables.
   (3) Data for the Czech Republic for 1975-1994, for Hungary for 1975-1993, and for Poland
       1975-1996 are not included.
   (4) Organization for Economic Cooperation and Development.
   (5) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (6) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.


                                                     -14-

   Table 3. Annual percent change in hourly compensation costs in U.S. dollars for production
   workers in manufacturing, 33 countries or areas and selected economic groups, selected
   years, 1975-2005


   Country or area                 1975-   1975-   1980-   1985-   1990-   1995-   2000-   2003    2004    2005
                                   2005(1) 1980    1985    1990    1995    2000    2005 

   Americas
   United States.............       4.6     9.3     5.7     3.1     3.0     2.7     3.8     4.1     2.8     3.6
   Brazil....................         -       -       -       -       -       -     3.2     6.7    14.9    29.9
   Canada....................       4.6     7.7     4.8     7.8      .2      .0     7.6    16.8    11.4     9.4
   Mexico....................       2.0     8.5    -6.3     -.2     1.5     4.0     4.9    -2.0      .0     7.9

   Asia and Oceania
   Australia.................       5.1     8.6     -.6     9.9     3.3    -1.3    11.6    28.7    18.1     6.5
   Hong Kong SAR (2).........       6.9    14.8     2.8    13.2     8.3     2.6      .7    -2.2     -.6     2.6
   Israel....................       6.2    11.0     1.4    16.1     4.1     3.9     1.7     5.6     3.4     3.5
   Japan.....................       6.9    13.0     2.8    14.9    13.3    -1.3     -.2     8.9     7.8     -.4
   Korea, Republic of........      13.3    24.3     5.2    24.6    14.5     2.5    10.5    10.5    14.9    21.8
   New Zealand...............       5.2    10.7    -3.5    13.3     4.1    -4.1    12.3    28.5    16.8     9.7
   Singapore.................       7.7    12.9    10.6     8.2    15.1    -1.0     1.3     7.0     2.8     3.8
   Sri Lanka.................       2.1    -5.0     5.2     4.7     6.4      .0       -     3.1     1.9       -
   Taiwan....................       9.8    21.8     8.0    21.0     8.9      .7      .6     1.0     4.9     6.8

   Europe
   Austria...................       6.5    14.5    -3.1    18.8     7.1    -5.4     9.0    23.2    11.8     3.1
   Belgium...................       5.7    15.3    -6.9    16.8     7.5    -4.7     8.9    21.9    13.1     2.6
   Czech Republic............         -       -       -       -       -     1.5    16.6    23.3    15.4    12.1
   Denmark...................       6.0    11.5    -5.5    17.8     6.6    -2.8    10.1    24.3    14.0     2.9
   Finland...................       6.6    12.4     -.2    20.9     2.8    -4.4    10.4    24.4    13.2     4.1
   France....................       5.8    14.6    -3.4    15.5     4.6    -4.3     9.8    23.5    13.0     3.1
   Germany...................         -       -       -       -       -    -5.5     7.8    22.4     9.7     1.5
   Greece....................       7.4    17.2     -.3    13.2     5.9       -       -       -       -       -
   Hungary...................         -       -       -       -       -      .8    16.8    21.3    18.3     7.8
   Ireland...................       6.9    14.5     -.1    14.4     3.2    -1.5    12.3    25.1    14.9     3.7
   Italy.....................       5.2    11.8    -1.3    18.0    -1.9    -2.5     8.7    22.8    13.1     2.8
   Luxembourg................       5.1    13.1    -8.3    16.4     8.0    -5.8     9.6    23.6    14.9     4.2
   Netherlands...............       5.4    12.9    -6.2    15.6     6.0    -4.3    10.5    24.2    12.0     3.4
   Norway....................       6.0    11.3    -2.4    15.8     2.7    -1.9    11.7    17.2    11.2     7.5
   Poland....................         -       -       -       -       -       -    10.1     6.9     9.3    17.9
   Portugal..................       5.4     5.4    -5.8    19.7     7.3    -2.5    10.3    23.1    12.6     4.5
   Spain.....................       6.7    18.4    -4.6    19.5     2.4    -3.5    10.8    25.6    14.2     3.8
   Sweden....................       4.8    11.7    -5.0    16.7      .8    -1.4     7.3    24.5    12.8     1.1
   Switzerland...............       5.6    12.7    -2.7    16.7     7.0    -6.2     7.8    16.9     8.7     1.0
   United Kingdom............       7.0    17.5    -3.7    15.2     1.8     4.1     8.8    16.2    16.1     3.6

   Trade-weighted measures (3)
   All foreign economies (4).       5.7    12.1      .2    11.6     4.9     -.1     6.3    12.9     9.0     6.1
   OECD (4,5)................       5.4    11.7     -.4    11.3     4.4     -.3     6.8    13.9     9.6     6.2
   Europe (4)................       6.1    14.5    -3.8    16.7     4.5    -2.7     9.1    21.7    12.6     2.8
   European Union-15 (6).....       6.1    14.6    -3.9    16.7     4.4    -2.6     9.1    22.0    12.8     2.8
   Asian NIEs (7)............      10.4    20.2     6.7    19.0    12.1     1.3     4.6     5.3     7.6    11.5

   Rates of change based on compound rate method.
   Dash means data not available.
   (1) 1975-2004 for Sri Lanka.  1975-1998 for Greece.
   (2) Hong Kong Special Administrative Region of China.
   (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 preceding these tables.
   (4) Data for the Czech Republic, Hungary, and Poland are not included for 1975-2004,
       1975-1980, 1980-1985, 1985-1990, and 1990-1995.  Data for Poland also are not included
       for 1995-2000.
   (5) Organization for Economic Cooperation and Development.
   (6) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (7) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.


                                                     -15-

   Table 4. Annual percent change in hourly compensation costs in national currency for
   production workers in manufacturing, 33 countries or areas and selected economic groups,
   selected years, 1975-2005


   Country or area                 1975-   1975-   1980-   1985-   1990-   1995-   2000-   2003    2004    2005
                                   2005(1) 1980    1985    1990    1995    2000    2005 

   Americas
   United States.............       4.6     9.3     5.7     3.1     3.0     2.7     3.8     4.1     2.8     3.6
   Brazil....................         -       -       -       -       -       -     9.2    12.3     9.3     8.1
   Canada....................       5.3    10.8     8.1     4.5     3.5     1.6     3.3     4.2     3.6     1.9
   Mexico....................      27.8    22.5    51.8    61.1    19.7    12.4     7.9     9.4     4.6     4.1

   Asia and Oceania
   Australia.................       7.0    11.6     9.6     7.5     4.3     3.6     5.7     7.2     4.6     2.9
   Hong Kong SAR (2).........       8.6    14.9    12.5    13.2     8.2     2.7      .7    -2.3     -.6     2.4
   Israel....................      42.7    68.3   200.9    29.2    12.8    10.4     3.7     1.5     1.7     3.6
   Japan.....................       3.4     7.0     3.9     4.1     3.8     1.4      .3      .8      .6     1.4
   Korea, Republic of........      16.1    30.0    13.1    19.6    16.5    10.6     8.3     5.4    10.3     8.9
   New Zealand...............       7.1    15.6    10.3     9.2     2.1     3.0     3.0     2.5     2.3     3.4
   Singapore.................       6.4    10.6    11.2     4.1     9.6     2.9      .6     4.1     -.3     2.2
   Sri Lanka.................      12.0    12.7    16.2    13.1    11.7     8.5       -     4.0     6.8       -
   Taiwan....................       9.2    20.5    10.2    11.8     8.5     4.1     1.2      .6     1.8     2.8

   Europe
   Austria...................       4.9     7.9     6.4     5.3     4.6     2.3     2.7     2.9     1.8     3.0
   Belgium...................       5.3    10.1     7.3     4.1     4.9     3.1     2.6     1.8     2.9     2.5
   Czech Republic............         -       -       -       -       -     9.4     6.0     6.2     5.2     4.5
   Denmark...................       6.1    11.1     7.2     5.8     4.5     4.6     3.7     3.7     3.8     3.0
   Finland...................       7.6    12.7    10.5     9.8     5.6     3.3     4.0     3.9     3.0     4.0
   France....................       6.6    14.3    12.3     4.5     2.8     2.7     3.4     3.1     2.9     3.0
   Germany...................         -       -       -       -       -     2.2     1.5     2.2     -.2     1.4
   Greece....................      18.3    23.9    26.1    16.4    14.2       -       -       -       -       -
   Hungary...................         -       -       -       -       -    18.5     9.0     5.5     7.0     6.2
   Ireland...................       8.1    16.2    14.0     4.8     3.8     4.8     5.8     4.5     4.6     3.6
   Italy.....................       8.3    18.0    15.8     7.5     4.3     2.6     2.4     2.6     2.9     2.7
   Luxembourg................       4.7     8.0     5.7     3.8     5.4     2.0     3.2     3.2     4.6     4.1
   Netherlands...............       4.2     7.6     3.9     2.5     3.3     3.7     4.1     3.7     1.9     3.3
   Norway....................       6.7    10.1     9.1     8.6     3.0     4.8     4.9     3.9     5.9     2.7
   Poland....................         -       -       -       -       -       -     3.7     1.9     2.8     4.3
   Portugal..................      12.1    20.7    20.5    15.3     8.3     5.0     3.9     2.8     2.5     4.4
   Spain.....................       9.8    23.8    13.4     7.9     6.6     3.9     4.4     4.8     3.9     3.7
   Sweden....................       6.8    12.2     9.5     8.3     4.7     3.6     3.0     3.5     2.6     2.8
   Switzerland...............       3.0     3.4     5.0     4.1     3.5      .7     1.4     1.0      .5     1.2
   United Kingdom............       7.7    16.5     8.2     8.1     4.3     4.9     4.9     6.7     3.5     4.3

   Trade-weighted measures (3)
   All foreign economies (4).      10.2    15.0    18.4    15.6     7.6     3.7     3.8     4.3     3.1     2.9
   OECD (4,5)................       9.8    14.0    15.9    15.8     7.5     3.6     4.0     4.6     3.3     2.9
   Europe (4)................       5.7    12.4     8.8     5.8     4.4      .3     3.3     3.6     2.3     2.9
   European Union-15 (6).....       5.8    12.8     9.0     5.8     4.5      .2     3.4     3.7     2.4     3.0
   Asian NIEs (7)............      11.3    21.6    11.8    13.6    11.8     6.2     3.7     2.7     4.4     5.0

   Rates of change based on compound rate method.
   Dash means data not available.
   (1) 1975-2004 for Sri Lanka.  1975-1998 for Greece.
   (2) Hong Kong Special Administrative Region of China.
   (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 preceding these tables.
   (4) Data for the Czech Republic, Hungary, and Poland are not included for 1975-2004,
       1975-1980, 1980-1985, 1985-1990, and 1990-1995.  Data for Poland also are not included
       for 1995-2000.
   (5) Organization for Economic Cooperation and Development.
   (6) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (7) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.


                                                     -16-

   Table 5. Annual percent change in exchange rates (U.S. dollars per national currency
   unit), 33 countries or areas and selected economic groups, selected years, 1975-2005


   Country or area                 1975-   1975-   1980-   1985-   1990-   1995-   2000-   2003    2004    2005
                                   2005(1) 1980    1985    1990    1995    2000    2005 

   Americas
   United States.............         -       -       -       -       -       -       -       -       -       -
   Brazil....................         -       -       -       -       -       -    -5.6    -5.0     5.1    20.2
   Canada....................       -.6    -2.7    -3.1     3.2    -3.2    -1.6     4.2    12.1     7.6     7.4
   Mexico....................     -20.2   -11.5   -38.3   -38.0   -15.2    -7.5    -2.8   -10.5    -4.4     3.7

   Asia and Oceania
   Australia.................      -1.8    -2.7    -9.3     2.2    -1.0    -4.7     5.6    20.0    12.9     3.6
   Hong Kong SAR (2).........      -1.5     -.1    -8.6      .0      .1     -.1      .0      .2      .0      .1
   Israel....................     -25.6   -34.1   -66.3   -10.2    -7.7    -5.9    -1.9     4.0     1.6     -.1
   Japan.....................       3.4     5.6    -1.1    10.5     9.1    -2.7     -.4     8.0     7.1    -1.7
   Korea, Republic of........      -2.5    -4.4    -6.9     4.2    -1.7    -7.4     2.0     4.9     4.1    11.8
   New Zealand...............      -1.8    -4.3   -12.6     3.7     1.9    -7.0     9.1    25.3    14.2     6.1
   Singapore.................       1.2     2.1     -.5     3.9     5.1    -3.9      .7     2.8     3.1     1.6
   Sri Lanka.................      -8.8   -15.7    -9.5    -7.5    -4.8    -7.8       -     -.9    -4.6       -
   Taiwan....................        .6     1.1    -2.0     8.2      .3    -3.2     -.5      .4     3.1     3.9

   Europe
   Austria...................       1.5     6.1    -9.0    12.8     2.4    -7.5     6.2    19.8     9.9      .1
   Belgium...................        .4     4.7   -13.2    12.2     2.5    -7.6     6.2    19.8     9.9      .1
   Czech Republic............         -       -       -       -       -    -7.2    10.0    16.1     9.8     7.3
   Denmark...................       -.1      .4   -11.9    11.4     2.0    -7.1     6.2    19.9     9.8     -.1
   Finland...................       -.9     -.3    -9.7    10.1    -2.6    -7.4     6.2    19.8     9.9      .1
   France....................       -.7      .3   -14.0    10.5     1.8    -6.8     6.2    19.8     9.9      .1
   Germany...................         -       -       -       -       -    -7.5     6.2    19.8     9.9      .1
   Greece....................      -9.2    -5.4   -21.0    -2.7    -7.3       -       -       -       -       -
   Hungary...................         -       -       -       -       -   -14.9     7.2    15.0    10.6     1.6
   Ireland...................      -1.1    -1.5   -12.3     9.2     -.7    -6.1     6.2    19.8     9.9      .1
   Italy.....................      -2.9    -5.3   -14.8     9.8    -6.0    -4.9     6.2    19.8     9.9      .1
   Luxembourg................        .4     4.7   -13.2    12.2     2.5    -7.6     6.2    19.8     9.9      .1
   Netherlands...............       1.2     4.9    -9.8    12.7     2.6    -7.6     6.2    19.8     9.9      .1
   Norway....................       -.7     1.1   -10.5     6.6     -.3    -6.4     6.5    12.8     5.0     4.6
   Poland....................         -       -       -       -       -       -     6.1     4.9     6.3    13.0
   Portugal..................      -6.0   -12.7   -21.9     3.8    -1.0    -7.1     6.2    19.8     9.9      .1
   Spain.....................      -2.8    -4.3   -15.9    10.8    -3.9    -7.1     6.2    19.8     9.9      .1
   Sweden....................      -1.9     -.4   -13.2     7.8    -3.7    -4.9     4.2    20.3    10.0    -1.6
   Switzerland...............       2.5     9.0    -7.4    12.0     3.3    -6.9     6.3    15.8     8.2     -.2
   United Kingdom............       -.7      .9   -11.0     6.6    -2.4     -.8     3.7     8.9    12.1     -.6

   Trade-weighted measures (3)
   All foreign economies (4).      -3.4    -2.0   -12.4     -.4    -2.2    -3.5     2.4     8.4     5.8     3.1
   OECD (4,5)................      -3.4    -1.7   -12.2     -.7    -2.5    -3.5     2.7     9.1     6.1     3.2
   Europe (4)................        .4     2.0   -11.6    10.4      .1    -2.7     5.6    17.6    10.0     -.1
   European Union-15 (6).....        .3     1.7   -11.8    10.3     -.1    -2.5     5.6    17.7    10.1     -.1
   Asian NIEs (7)............       -.8    -1.0    -4.5     4.8      .4    -4.5      .7     2.5     3.1     6.0

   Rates of change based on compound rate method.
   Dash means data not available.
   (1) 1975-2004 for Sri Lanka.  1975-1998 for Greece.
   (2) Hong Kong Special Administrative Region of China.
   (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 preceding these tables.
   (4) Data for the Czech Republic, Hungary, and Poland are not included for 1975-2004,
       1975-1980, 1980-1985, 1985-1990, and 1990-1995.  Data for Poland also are not included
       for 1995-2000.
   (5) Organization for Economic Cooperation and Development.
   (6) European Union-15 refers to European Union member countries prior to the expansion
       of the European Union to 25 countries on May 1, 2004.
   (7) The Asian NIEs are Hong Kong SAR, the Republic of Korea, Singapore and Taiwan.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.


                                                    -17-

   Table 6. Hourly compensation costs in national currency units and exchange rates, 33
   countries or areas, 2005


    Country or area        Compensation costs       Exchange Rates

   Americas
   United States.............   23.65                        ..
   Brazil....................    9.97                     2.435
   Canada....................   28.87                     1.212
   Mexico....................   28.67                     10.89

   Asia and Oceania
   Australia.................   32.65                     1.311
   Hong Kong SAR (1).........   43.94                     7.778
   Israel....................   55.76                     4.488
   Japan.....................    2395                     110.1
   Korea, Republic of........   13881                      1024
   New Zealand...............   21.24                     1.419
   Singapore.................   12.74                     1.664
   Sri Lanka.................       -                         -
   Taiwan....................   205.0                     32.13

   Europe
   Austria...................   23.63                     .8033
   Belgium...................   24.74                     .8033
   Czech Republic............   146.4                     23.96
   Denmark...................   212.6                     5.995
   Finland...................   25.65                     .8033
   France....................   19.78                     .8033
   Germany...................   26.51                     .8033
   Greece....................       -                         -
   Hungary...................    1212                     199.6
   Ireland...................   18.28                     .8033
   Italy.....................   16.91                     .8033
   Luxembourg................   22.23                     .8033
   Netherlands...............   25.55                     .8033
   Norway....................   252.1                     6.441
   Poland....................   14.68                     3.236
   Portugal..................    5.89                     .8033
   Spain.....................   14.29                     .8033
   Sweden....................   214.6                     7.471
   Switzerland...............   38.00                     1.246
   United Kingdom............   14.09                     .5490

   Dash means data not available.
   (1) Hong Kong Special Administrative Region of China.

   National currency units are: United States, dollar; Brazil, real;
   Canada, dollar;  Mexico, peso; Australia, dollar; Hong Kong, dollar;
   Israel, new shekel; Japan, yen; Republic of Korea, won; New Zealand, dollar;
   Singapore, dollar; Sri Lanka, rupee; Taiwan, dollar; Austria, euro;
   Belgium, euro; Czech Republic, koruna; Denmark, krone; Finland, euro;
   France, euro; Germany, euro; Greece, euro; Hungary, forint; Ireland, euro;
   Italy, euro; Luxembourg, euro; Netherlands, euro; Norway, krone;
   Poland, zloty; Portugal, euro; Spain, euro; Sweden, krona; Switzerland, franc;
   United Kingdom, pound.

   Note: For data for all years 1975-2005, see the supplementary tables to this
         news release at http://www.bls.gov/fls.

   Source: U.S. Department of Labor, Bureau of Labor Statistics, November 2006.


                                 -7-

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.

     The compensation measures in this news release are based on 
statistics available to BLS as of September 2006.   These measures 
may be revised as data are collected to update compensation measures 
for component industries.

     Beginning with this release, BLS has prepared measures of 
hourly compensation costs for Poland.  Because of data limitations, 
the measures cover only the years 1997-2005. 



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 and (b) other direct pay.  Pay for time worked includes 
basic time and piece rates plus overtime premiums, shift 
differentials, other premiums and bonuses paid regularly each pay 
period, and cost-of-living adjustments.  Other direct pay includes 
pay for time not worked (vacation, 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 and (d) other labor taxes.  
Social insurance expenditures include employer expenditures for 
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.   Other labor taxes includes 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.  

     The BLS definition of hourly compensation costs is not the same 
as the International Labor Office (ILO) definition of total labor 
costs.  Hourly compensation costs do not include all items of labor 
costs.  The costs of recruitment, employee training, and plant 
facilities and services-such as cafeterias and medical clinics-are 
not included because data are not available for many countries.  The 
labor costs not included account for no more than 4 percent of total 
labor costs in any country for which the data are available.

     Production workers generally include those employees who are 
engaged in fabricating, assembly, and related activities; material 
handling, warehousing, and shipping; maintenance and repair; 
janitorial and guard services; auxiliary production (for example, 
power plants); and other services closely related to the above 
activities.  Working supervisors are generally included; apprentices 
and other trainees are generally excluded.



Methods

     Total compensation is computed by adjusting each country's 
average earnings series for items of direct pay not included in 
earnings and for employer expenditures for legally required 
insurance, contractual and private benefit plans, and other labor 
taxes.  For the United States and other countries that measure 
earnings on an hours-paid basis, the figures are also adjusted in 
order to approximate compensation per hour worked.

     Earnings statistics are obtained from surveys of employment, 
hours, and earnings or from surveys or censuses of manufactures.

     Adjustment factors are obtained from periodic labor cost 
surveys and interpolated or projected to non-survey years on the 
basis of other information for most countries.  The information used 
includes tabulations of employer social security contribution rates 
provided by the International Social Security Association, 
information on contractual and legislated fringe benefit changes 
from labor bulletins, and statistical series on indirect labor costs.  
For other countries, adjustment factors are obtained from surveys or 


                                 -8-

censuses of manufactures or from reports on fringe-benefit systems 
and social security.  For the United States, the adjustment factors 
are special calculations for international comparisons based on data 
from several surveys.

     The statistics are also adjusted, where necessary, to account 
for major differences in worker coverage; differences in industrial 
classification systems; and changes over time in survey coverage, 
sample benchmarks, or frequency of surveys.  Nevertheless, some 
differences in industrial coverage remain and, with the exception of 
the United States, Canada, and several other countries, the data 
exclude very small establishments (less than 5 employees in Japan 
and less than 10 employees in most European and some other 
countries).  For the United States, the methods used, as well as the 
results, differ somewhat from those for other BLS series on U.S. 
compensation costs.

     Hourly compensation costs are converted to U.S. dollars using 
the average daily exchange rate for the reference period.  The 
exchange rates used are prevailing commercial market exchange rates 
as published by either the U.S. Federal Reserve Board or the 
International Monetary Fund.

     On January 1, 1999, several European countries joined the 
European Monetary Union (EMU): Austria, Belgium, Finland, France, 
Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and 
Spain.  Greece joined on January 1, 2001.  Currencies of EMU members 
were established at fixed conversion rates to the euro, the official 
currency of the EMU. In this release, data on hourly compensation 
costs in national currency and exchange rates for the EMU countries 
relate to euros for 1999 to present; for the years 1975-1998 these 
data are published in the old national currencies used in each 
country before the euro was adopted.  In order to include data on 
trends in national currency compensation costs and exchange rates 
for the entire time period, BLS converts national currency for 1975-
1998 to a "euro" basis for calculation.  The conversions for all 
years 1975-1998 are made using the official fixed conversion rates 
for 1999.



Industrial classification

     The hourly compensation measures relate to manufacturing on a 
North American Industry Classification System (NAICS) basis.  NAICS 
is the common industrial classification used by the United States, 
Canada, and Mexico.  The NAICS definition of manufacturing differs 
somewhat from the definition of manufacturing used in other 
countries.  Some industries that are not included in the NAICS 
definition of manufacturing, such as publishing of books and sound 
recordings, some repair and maintenance of equipment, and some 
business support services, are included in the definition of 
manufacturing in most other industrial classifications.   Other 
industries, such as some processing of foods, some packaging, and 
retail sales of bakery products from the production facility, are 
included in the NAICS definition of manufacturing but not in the 
definition of manufacturing for most foreign economies.  Most of the 
differences other than the treatment of publishing are very minor 
and do not have a noticeable impact on overall manufacturing 
averages.

     BLS makes adjustments to remove publishing from manufacturing 
for the foreign economies in which it is classified as a part of 
manufacturing, except for Sri Lanka, for which the data necessary to 
remove publishing are not available.  For the countries for which 
adjustments are made, the effect of publishing on manufacturing 
wages was estimated and removed using data from national sources, 
the United Nations Industrial Statistics Database, the International 
Labor Office (ILO), and other sources.  Except for Hong Kong, the 
effect of removing publishing from manufacturing does not change the 
level of hourly compensation costs for any economy more than 1.5 
percent.  For Hong Kong, the effect of the adjustments is 2 to 4 
percent in several years.


Country notes 

     The following are exceptions to the standard coverage and 
definitions explained above:

     Australia.  Compensation relates to production workers and non-
production workers other than those in managerial, executive, 
professional, and higher supervisory positions.

      Hong Kong SAR.  Average of selected manufacturing industries.  
The industries covered accounted for about 63 percent of all persons 
employed in manufacturing in 2001. Compensation excludes overtime 
pay.  Hong Kong became a Special Administrative Region (SAR) of 
China in July 1997.

     Austria.  Excludes workers in establishments considered 
handicraft manufacturers.  In 1986, handicraft employment was about 
35 percent of all manufacturing employment.  In 2003, the handicraft 
blue collar workers' average monthly gross wage was $1,893.  The 
average monthly gross wage of manufacturing blue-collar workers was 
$2,156.

     Finland.  Data are for industrial workers and include workers 
in mining and electrical power plants which account for around 3 
percent of industrial employment.  For comparability with other 
countries, compensation excludes some obligatory training and plant 
facilities costs; in 1994, these costs would add 1.6 percent to 
average hourly compensation costs.



                                 -9-

     Germany.  Excludes workers in establishments considered 
handicraft manufacturers.  Handicraft employment in Germany was 20.3 
percent of all employment in manufacturing in 1994.  Average hourly 
earnings of production workers were about 3 percent lower in 
manufacturing including handicrafts than in manufacturing excluding 
handicrafts in 1990.

     Ireland.  Data refer to September for 1975.

     Mexico.  Compensation costs data for Mexico exclude petroleum 
and coal products manufacturing.

     Norway.  For comparability with other countries, compensation 
excludes some obligatory training and plant facilities costs; in 
1994, these costs would add 2.2 percent to average hourly 
compensation costs.



Trade-weighted measures

     The trade weights used to compute the average compensation cost 
measures for selected economic groups are weights based on the 
relative dollar value of U.S. trade in manufactured commodities 
(exports plus imports) with each country or area in 2004.  (See the 
following table.)  The trade data are compiled by the U.S. Census 
Bureau.

      The only countries not covered in the trade-weighted measures 
of this report that accounted for as much as one percent of such 
trade are China, Malaysia, Thailand, and India.  Hourly compensation 
costs data for China are included in this report in a special text 
box.  In addition, an article on manufacturing compensation costs in 
China is available on the BLS website at 
http://www.bls.gov/opub/mlr/2005/08/art3full.pdf.  The compensation 
data on China are not directly comparable with the data for other 
countries found in this new release.

     The countries included in the Organization for Economic 
Cooperation and Development (OECD) trade-weighted measure are Canada, 
Mexico, Australia, Japan, the Republic of Korea, New Zealand, and 
all European countries.  The group labeled "European Union-15" 
consists of the 15 members of the European Union before the 
expansion to 25 countries on May 1, 2004 (Austria, Belgium, Denmark, 
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the 
Netherlands, Portugal, Spain, Sweden, and the United Kingdom).  The 
group labeled "Europe" consists of the 15 members of the European 
Union-15, the Czech Republic, Hungary, Norway, Poland, and 
Switzerland. The group labeled "Asian NIEs" consists of the four 
newly industrialized economies of Hong Kong SAR, the Republic of 
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 32 
foreign economies are computed both including and excluding Brazil, 
the Czech Republic, Hungary, and Poland because a lack of data for 
these countries prior to the mid-1990s.

     The trade-weighted average rates of change are computed as the 
trade-weighted arithmetic average of the rates of change for the 
individual countries or areas; the trade-weighted average hourly 
compensation costs are computed as the trade-weighted arithmetic 
average of cost levels for the individual countries or areas.  Rates 
of change derived from the trade-weighted average hourly 
compensation cost levels need not be the same as the trade-weighted 
average rates of change.



                                 -10-

Share of total U.S. imports and exports of manufactured products in 
2004
(in percent)

Country or area           2004        Country or area             2004
and economic             trade        and economic               trade
group                    share        group                      share


Brazil                     1.7        Greece                       0.1
Canada                    20.0        Hungary                      0.2
Mexico                    12.5        Ireland                      1.9
                                      Italy                        2.0
Australia                  1.1        Luxembourg                   0.1
Hong Kong SAR(1)           1.3        Netherlands                  1.8
Israel                     1.2        Norway                       0.2
Japan                      9.4        Poland                       0.1
Korea, Republic of         3.7        Portugal                     0.2
New Zealand                0.2        Spain                        0.7
Singapore                  1.8        Sweden                       0.8
Sri Lanka                  0.1        Switzerland                  1.0
Taiwan                     2.9        United Kingdom               3.8

Austria                    0.4
Belgium                    1.5        Economic Groups
Czech Republic             0.1        32 foreign economies        74.7
Denmark                    0.3        OECD(2)                     66.2
Finland                    0.3        Europe                      22.4
France                     2.7        European Union-15(3)        20.8
Germany                    5.6        Asian NIEs                   9.1

1 Hong Kong Special Administrative Region of China.
2 Organization for Economic Cooperation and Development.
3 Includes the 15 European Union members prior to expansion on May 1, 
2004.



Data limitations

     Because compensation is partly estimated, the statistics should 
not be considered as precise measures of comparative compensation 
costs.  In addition, the figures are subject to revision as the 
results of new labor cost surveys or other data used to estimate 
compensation costs become available.

     The comparative level figures in this report are averages for 
all manufacturing industries and are not necessarily representative 
of all component industries.  In the United States and some other 
countries, such as Japan, differentials in hourly compensation cost 
levels by industry are fairly wide.  



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 



                                 -11-

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.