Internet address:  
http://stats.bls.gov/flshome.htm           USDL:  00-07
Technical information:  (202) 691-5654     For Release: 10:00 A.M. EST
Media contact:  (202) 691-5902             Tuesday, January 11, 2000

INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
FOR PRODUCTION WORKERS IN MANUFACTURING, 1998

  Average hourly compensation costs for manufacturing production 
workers in 28 foreign economies fell to 79 percent of the U.S. level 
in 1998, down from 95 percent in 1995, according to the Bureau of 
Labor Statistics, U.S. Department of Labor.  The trade-weighted costs 
relative to the U.S. declined 5 percentage points from 1997, the third 
consecutive yearly decline, reaching the lowest relative position 
since 1989, when it was 77 percent. The widening gap reflected the 
continued appreciation of the U.S. dollar against most foreign 
currencies, particularly the Asian currencies. (See chart 1.)

  When measured in U.S. dollars, trade-weighted hourly 
compensation costs for production workers in manufacturing increased 
1.9 percent in the United States from 1997 to 1998 and declined 4.1 
percent in the 28 foreign economies studied by BLS.  Costs in Europe 
increased 1.4 percent, but costs decreased 4.7 percent in Canada, 6.8 
percent in Japan, and 13.6 percent in the Asian newly industrializing 
economies (NIEs) of Hong Kong, Korea, Singapore, and Taiwan.  On a 
national currency basis, there were moderate increases of about 3 
percent or less in Canada, Japan, Europe, and the Asian NIEs.  The 
U.S. dollar's appreciation of 7.6 percent against the foreign 
currencies offset these increases and led to the decline of costs on a 
U.S. dollar basis in the foreign economies.  (See table A.)

Chart 1. Hourly compensation costs in U.S. dollars for
production workers in manufacturing, 1975-98

PRINTED COPY CONTAINS CHART AT THIS POINT.

BOX: A NOTE ON THE MEASURES

  The hourly compensation measures in this news release are based on 
statistics available to BLS as of October 1999.  The 1998 compensation 
statistics are preliminary measures; for some of the foreign countries, 
they are based on less than full-year data.  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 for other BLS series on U.S. compensation 
costs.

  Total compensation costs include pay for time worked, other direct 
pay (including holiday and vacation pay, bonuses, other direct 
payments, and the cost of pay in kind), employer expenditures for 
legally required insurance programs and contractual and private benefit 
plans, and, for some countries, other labor taxes.

  Labor cost measures.  The compensation measures are computed in 
national currency units and are converted into U.S. dollars at 
prevailing commercial market currency exchange rates.  They are 
appropriate measures for comparing levels of employer labor costs, but 
they do not indicate relative living standards of workers or the 
purchasing power of their incomes.  Prices of goods and services vary 
greatly among countries, and commercial market exchange rates do not 
reliably indicate relative differences in prices.

  Data limitations.  Hourly compensation is partly estimated, and data 
are subject to revision in the next update.  The comparative level 
figures are averages for all manufacturing industries and are not 
necessarily representative of all component industries.

  For further information regarding definitions, sources, and 
computation methods and a description of the trade-weighted measures 
and economic groups, see the Technical Notes.

END OF BOX (A NOTE ON THE MEASURES)


Comparative compensation costs in U.S. dollars

  Measured in U.S dollars, hourly compensation costs for production 
workers in manufacturing increased in 1998 in 13 of the economies 
studied, including the United States.  This was in sharp contrast to 
1997, when only four countries in addition to the United States showed 
an increase.  In the United States, hourly compensation costs rose to 
$18.56, 1.9 percent higher than in 1997.

  Hourly compensation costs in Europe rebounded in 1998 after a sharp 
decline in 1997.  Of the 16 European countries for which data are 
available, only the United Kingdom had an increase in costs in 1997.  
In 1998, however, the picture looked different.  Despite generally 
declining currency values, compensation costs rose in nine European 
countries, and two countries (Denmark and the United Kingdom) had 
percentage increases larger than the U.S. increase.  (See tables A and 
2.) 

  European hourly compensation costs are still 11 percent higher than 
those in the United States, although this is much lower than the peak 
in 1995, when compensation costs in Europe exceeded those in the 
United States by 28 percent.  The relative gap between Europe and the 
United States has not been narrower since 1989, when European costs 
were marginally lower than U.S. costs.


Table A.  Percent change, 1997-98

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            1.9        -       1.9
Canada                   2.1     -6.7      -4.7
Mexico                  18.8    -13.5       2.8
               
Australia                6.4    -15.4     -10.0
Hong Kong SAR 1          1.0      -.1        .9
Israel                  10.0     -9.2       -.2
Japan                     .8     -7.6      -6.8
Korea                    1.0    -32.1     -31.4
New Zealand              3.1    -19.1     -16.6
Singapore                6.0    -11.1      -5.7
Sri Lanka               12.1     -8.7       2.2
Taiwan                   4.0    -14.2     -10.7
           
Austria                  2.6     -1.4       1.1
Belgium                  2.7     -1.4       1.3
Denmark                  4.5     -1.4       3.0
Finland                  3.9     -2.8        .9
France                   2.7     -1.0       1.6
Germany, Former West     2.4     -1.4        .9
Germany, Unified         2.6     -1.4       1.1
Greece                   4.7     -7.6      -3.2
Ireland                  4.7     -6.0      -1.6
              
Italy                    -.8     -1.9      -2.6
Luxembourg                 -        -         -
Netherlands              1.4     -1.6       -.2
Norway                   6.5     -6.2       -.1
Portugal                 4.7     -2.7       1.9
Spain                    1.2     -1.9       -.8
Sweden                   3.1     -3.9       -.9
Switzerland               .8       .0        .8
United Kingdom           5.0      1.2       6.2
           
Trade-weighted measures 2,3   
All 28 foreign economies 3.9     -7.6      -4.1
OECD 4                   3.8     -7.2      -3.8
   less Mexico, Korea 5  2.1     -5.0      -3.1
Europe                   2.6     -1.2       1.4
European Union           2.7     -1.2       1.5
Asian NIEs               3.1    -16.3     -13.6


Dash means data not available.
1  Hong Kong Special Administrative Region of China.
2  The 1997-98 percent changes for the trade weighted measures are
   based upon the changes for the countries or areas for which 1998
   data are available.    
3  German data included in the trade-weighted measures relate to the
   former West Germany.
4  OECD refers to the Organization for Economic Cooperation and
   Development.
5  Mexico joined the OECD in 1994 and Korea joined in 1996.


  Despite the recent convergence of compensation cost levels between 
Europe and the United States, many European countries continue to have 
the highest costs among the countries studied.  Hourly compensation 
costs in the former West Germany were 51 percent higher than those in 
the United States, and eight European countries had costs that were 
more than 15 percent higher than the United States.  (See chart 2.)

  Hourly compensation costs in Japan decreased for the third 
consecutive year in 1998 to $18.05 and were lower than U.S. costs for 
the first time since 1991.  In Canada, the decrease in costs by 4.7 
percent was the largest one-year decline in that country since the 
Bureau of Labor Statistics began the series in 1975.

  The steepest declines in compensation costs came in the Asian NIEs, 
which saw their costs drop significantly (31.4, 10.7, and 5.7 percent 
in Korea, Taiwan, and Singapore, respectively), while costs in Hong 
Kong rose only slightly.  The declines were largely attributable to 
the depreciation of the currencies of these economies against the 
dollar, as well as to moderate increases in compensation costs when 
measured in national currencies.  As a group, the Asian NIEs now have 
hourly costs of less than one-third the U.S. level.

BOX: HOURLY COMPENSATION MEASURES FOR UNIFIED GERMANY

  In past issues of this news release, data for Germany related to the 
former West Germany only.  BLS has now prepared estimates of hourly 
compensation costs in Unified Germany.  Hourly compensation costs for 
Unified Germany and the former West Germany are shown in the 
tabulation below.  The close relationship between the figures for 
Unified Germany and the former West Germany is due to the large 
proportion of manufacturing employment in Unified Germany accounted 
for by the former West Germany.

Hourly Compensation Costs for Production Workers in Manufacturing
            in Unified Germany and the Former West Germany

Year   Unified Germany   Former West Germany      Unified Germany
            (US$)              (US$)            (West Germany = 100)
1993        24.44              25.25                  96.8
1994        25.96              26.80                  96.9
1995        30.83              31.76                  97.1
1996        30.26              31.20                  97.0
1997        26.90              27.74                  97.0
1998        27.20              27.99                  97.2

END OF BOX (HOURLY COMPENSATION MEASURES FOR UNIFIED GERMANY)

Chart 2. Indexes of hourly compensation costs in U.S. dollars for
         for production workers in manufacturing, 1998

PRINTED COPY CONTAINS CHART AT THIS POINT.


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.  A country's compensation costs expressed in U.S. 
dollars are calculated by dividing compensation costs in national 
currency by the exchange rate (expressed as national currency units 
per U.S. dollar).

  Although much of the decline in compensation costs on a U.S. dollar 
basis can be attributed to the strength of the dollar, modest 
increases in costs on a national currency basis also contributed to 
slow compensation growth in many countries. The trade-weighted average 
cost increase of 3.9 percent measured in national currency terms for 
the 28 foreign economies was the smallest since this series began in 
1975.

  The 1.9-percent increase in compensation costs in the United States 
was lower than that of all but seven economies when measured in 
national currency terms.  Some of the smallest increases occurred in 
Asia, where costs rose 1 percent or less in Hong Kong, Japan, and 
Korea.  The slow growth in Asia continued a trend: in the first half 
of the decade, hourly compensation costs in the Asian NIEs grew at an 
annual average rate of more than 10 percent; since 1995, however, the 
rate of growth in these economies has been halved.

  Compensation costs in Europe rose at a historically low rate of only 
2.6 percent.  The slowest growth occurred in Spain and Switzerland, 
while compensation costs in national currency actually declined in 
Italy.  The decline in Italy was attributable in large part to the 
substantial reduction of employer contributions to legally required 
social insurance programs.

  Mexico had the largest increase in hourly compensation costs of all 
countries studied, 18.8 percent.  Costs also increased by 10 percent 
or more in Israel and Sri Lanka. These increases were not out of line 
with recent experience in these countries.  Cost increases in national 
currency have historically been high in Israel and Mexico, with a 
significant impact on the trade-weighted cost measures for the 28 
foreign economies.  When Israel and Mexico are excluded, the trade-
weighted average increase in national currency compensation costs in 
1998 is reduced from 3.9 percent to 2.3 percent.

Exchange rates

  The appreciation of the dollar against the currencies of nearly all 
the foreign countries studied continued for the third consecutive year 
in 1998.  As in 1997, the British pound was the only currency against 
which the dollar declined in value.  The increase in the dollar's 
value in 1998 was the highest since 1984, and the trade-weighted value 
of the dollar rose an average of 6.5 percent per year since 1995, the 
largest three-year increase since the mid-1980s. 

  Currency values of the three largest trading partners of the United 
States in the study (as measured by trade weights) declined sharply in 
1998. The Canadian dollar lost 6.7 percent and the Mexican peso lost 
13.5 percent of their values relative to the U.S. dollar.  The 
weakness of the Japanese yen continued as well, dropping 7.6 percent 
in 1998; the value of the yen has fallen nearly 30 percent in three 
years.

  Except for Hong Kong, where the local currency is pegged to the U.S. 
dollar, the currencies of the Asian NIEs lost further ground against 
the U.S. currency.  The currencies of Korea, Singapore, and Taiwan 
depreciated 32.1, 11.1, and 14.2 percent, respectively.  These 
declines were more than double the rates of 1997 and were the largest 
depreciation against the U.S. dollar these countries have experienced 
since the beginning of these measures in 1975.

  In contrast to 1997 when the European currencies exhibited the 
largest depreciation against the U.S. dollar among all currencies 
studied, European countries in 1998 saw their currencies depreciate 
against the dollar by a moderate 1.2 percent.  The 1998 drop was 
substantially less than the 1997 depreciation of 9.1 percent.

  The weakness of the foreign currencies relative to the U.S. dollar 
in 1998 offset increases in hourly compensation costs in national 
currencies and led to declines or smaller increases in hourly 
compensation costs measured in U.S. dollars.  Thus, trade-weighted 
hourly compensation costs for the 28 foreign economies studied 
increased 3.9 percent from 1997 to 1998 in national currency terms, 
but fell 4.1 percent when measured in U.S. dollars.  The impact of 
exchange rates on compensation costs was particularly evident in the 
Asian NIEs:  Hourly compensation costs on a national currency basis in 
these countries rose 3.1 percent, but, when adjusted for sharp 
declines in currency value relative to the U.S. dollar, costs declined 
13.6 percent.

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 1998.

  BLS also computes comparative measures for 39 component 
manufacturing industries.  Data are available through 1996.  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 World Wide Web 
(http://stats.bls.gov/flshome.htm), and there are no restrictions on 
their use.

  For further information, contact the Office of Productivity and 
Technology, Bureau of Labor Statistics, 2 Massachusetts Avenue, NE, 
Room 2150, Washington, DC 20212 or call 202-691-5654.

  Information in this report is available to sensory impaired 
individuals upon request.  Voice phone: 202-606-5886; TDD message
referral phone: 1-800-877-8339.

  This material is in the public domain and, with appropriate credit, 
may be reproduced without permission.


BOX: REVISED MEASURES

  The hourly compensation costs series for Australia, Austria, Canada, 
Germany, Japan, and Sweden were revised to incorporate new labor cost 
surveys and to make other adjustments.

  Data for West Germany were revised to incorporate 1996 labor cost 
survey data.  In addition, BLS constructed hourly compensation 
measures for Unified Germany for 1993 to 1998.  The Unified Germany 
measures incorporate average hourly earnings data available from 1993 
and data from the 1992 and 1996 labor cost surveys.

  For Canada, data were revised back to 1975 to reflect revisions to 
the Supplementary Labor Income series.  One revision is that payroll 
taxes paid into general revenues are no longer considered to be social 
security taxes by Statistics Canada and are not included in the 
Canadian national accounts.  BLS made special estimates of additional 
compensation by incorporating these taxes. The inclusion of these 
taxes by BLS is consistent with methodology used in constructing the 
Canadian compensation measures in the past.

  For Australia, revisions were made to incorporate 1993-94 and 1996-
97 major labor cost survey data.

  For Austria, the hourly compensation measures were revised to 
incorporate the results of a 1996 labor cost survey.  

  For Japan, monthly labor survey benchmarks made every three years 
were incorporated in the BLS calculations from 1996.

  For Sweden, BLS methods of estimating holiday pay and sick leave 
were adjusted for 1997 and 1998 to reflect changes in Statistics 
Sweden data collection. 

END OF BOX (REVISED MEASURES)
Table 1. Indexes of hourly compensation costs in U.S. dollars for production workers
in manufacturing, 29 countries or areas and selected economic groups, selected years, 1975-98
(Index, United States = 100)


Country or area       1975   1980   1985   1990   1994   1995   1996   1997   1998


United States ......   100    100    100    100    100    100    100    100    100

Canada .............    94     88     84    107     94     94     94     90     85
Mexico .............    23     22     12     11     15      9      9     10     10

Australia ..........    88     86     63     88     84     89     95     91     80
Hong Kong SAR 1 ....    12     15     13     21     27     28     29     30     29
Israel .............    35     38     31     57     54     61     64     66     65
Japan ..............    47     56     49     86    127    139    118    106     97

Korea ..............     5     10      9     25     38     42     46     40     27
New Zealand ........    50     54     34     56     53     59     62     61     50
Singapore ..........    13     15     19     25     37     43     47     45     42
Sri Lanka ..........     4      2      2      2      3      3      3      3      3
Taiwan .............     6     10     12     26     33     34     34     32     28

Austria ............    71     90     58    119    128    147    140    120    119
Belgium ............   101    133     69    129    137    155    146    125    125
Denmark ............    99    110     62    121    120    140    136    121    122
Finland ............    72     83     63    141    113    140    133    117    116

France .............    71     91     58    104    105    116    113     99     98
Germany, Former West    99    124     73    147    159    185    176    152    151
Germany, Unified....   -      -      -      -      154    179    171    148    147
Greece .............    27     38     28     45     46     53     54     51     48
Ireland ............    48     60     46     78     73     79     78     74     72

Italy ..............    73     83     59    117     94     94    100     96     92
Luxembourg .........   102    122     60    112    121    136    127     -      -
Netherlands ........   103    122     67    121    123    140    130    113    111
Norway .............   106    117     80    144    124    142    142    130    128

Portugal ...........    25     21     12     25     27     31     32     30     30
Spain ..............    40     60     36     76     68     75     76     67     65
Sweden .............   113    127     74    140    110    125    138    122    119
Switzerland ........    96    112     74    140    148    170    160    133    131
United Kingdom .....    53     77     48     85     76     80     80     85     89

Trade-weighted measures 2,3
All 28 foreign econ.    60     67     52     83     89     95     91     84     79
OECD 4 .............    67     74     57     90     96    103     98     90     85
less Mexico, Korea5     76     84     65    104    110    119    112    103     98
Europe .............    80    100     61    116    114    128    125    112    111
European Union .....    79    100     60    115    113    126    123    111    110
Asian NIEs .........     8     12     13     25     34     37     39     37     31


Dash means data not available.
1  Hong Kong Special Administrative Region of China.
2  Data for Germany relate to the former West Germany only.
3  For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
4  Organization for Economic Cooperation and Development.
5  Mexico joined the OECD in 1994, and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing,
29 countries or areas and selected economic groups, selected years, 1975-98


Country or area       1975   1980   1985   1990   1994   1995   1996   1997   1998


United States ...... $6.36  $9.87 $13.01 $14.91 $16.87 $17.19 $17.70 $18.21 $18.56

Canada .............  5.96   8.67  10.95  15.95  15.88  16.10  16.64  16.46  15.69
Mexico .............  1.47   2.21   1.59   1.58   2.47   1.51   1.54   1.78   1.83

Australia ..........  5.62   8.47   8.20  13.07  14.12  15.27  16.88  16.58  14.92
Hong Kong SAR 1 ....   .76   1.51   1.73   3.20   4.61   4.82   5.14   5.42   5.47
Israel .............  2.25   3.79   4.06   8.55   9.19  10.54  11.32  12.04  12.02
Japan ..............  3.00   5.52   6.34  12.80  21.35  23.82  20.91  19.37  18.05

Korea ..............   .32    .96   1.23   3.71   6.40   7.29   8.22   7.33   5.03
New Zealand ........  3.21   5.33   4.47   8.33   8.93  10.11  11.03  11.02   9.19
Singapore ..........   .84   1.49   2.47   3.78   6.29   7.33   8.32   8.24   7.77
Sri Lanka ..........   .28    .22    .28    .35    .45    .48    .48    .46    .47
Taiwan .............   .40   1.00   1.50   3.93   5.55   5.92   5.93   5.87   5.24

Austria ............  4.51   8.88   7.58  17.75  21.55  25.31  24.80  21.91  22.16
Belgium ............  6.41  13.11   8.97  19.17  23.07  26.65  25.89  22.82  23.11
Denmark ............  6.28  10.83   8.13  18.04  20.30  24.07  24.11  22.03  22.69
Finland ............  4.61   8.24   8.16  21.03  19.06  24.14  23.56  21.37  21.57

France .............  4.52   8.94   7.52  15.49  17.63  20.01  19.93  17.99  18.28
Germany, Former West  6.31  12.25   9.53  21.88  26.80  31.76  31.20  27.74  27.99
Germany, Unified       -      -      -      -    25.96  30.83  30.26  26.90  27.20
Greece .............  1.69   3.73   3.66   6.76   7.73   9.17   9.59   9.20   8.91
Ireland ............  3.03   5.95   5.92  11.66  12.39  13.57  13.85  13.55  13.33

Italy ..............  4.67   8.15   7.63  17.45  15.89  16.22  17.75  17.57  17.11
Luxembourg .........  6.50  12.03   7.81  16.74  20.33  23.35  22.55     -      -
Netherlands ........  6.58  12.06   8.75  18.06  20.80  24.02  23.08  20.61  20.57
Norway .............  6.77  11.59  10.37  21.47  20.97  24.38  25.05  23.72  23.70

Portugal ...........  1.58   2.06   1.53   3.77   4.60   5.37   5.58   5.38   5.48
Spain ..............  2.53   5.89   4.66  11.38  11.54  12.88  13.51  12.24  12.14
Sweden .............  7.18  12.51   9.66  20.93  18.62  21.44  24.37  22.23  22.03
Switzerland ........  6.09  11.09   9.66  20.86  24.91  29.30  28.34  24.19  24.38
United Kingdom .....  3.37   7.56   6.27  12.70  12.80  13.67  14.09  15.47  16.43

Trade-weighted measures 2,3
All 28 foreign econ.  3.83   6.60   6.75  12.36  15.00  16.37  16.06  15.24  14.69
OECD 4 .............  4.25   7.30   7.40  13.49  16.26  17.73  17.33  16.38  15.82
less Mexico, Korea5   4.82   8.30   8.48  15.55  18.56  20.38  19.85  18.74  18.20
Europe .............  5.10   9.90   7.96  17.31  19.27  22.00  22.05  20.42  20.67
European Union .....  5.03   9.83   7.85  17.09  18.99  21.64  21.72  20.20  20.47
Asian NIEs .........   .52   1.17   1.65   3.72   5.78   6.40   6.91   6.67   5.72


Dash means data not available.
1  Hong Kong Special Administrative Region of China.
2  Data for Germany relate to the former West Germany only.
3  For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
4  Organization for Economic Cooperation and Development.
5  Mexico joined the OECD in 1994, and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

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, 1975-98


Country or area       1975-98 1975-80 1980-85 1985-90 1990-95 1995-98   1996    1997    1998


United States ......     4.8     9.2     5.7     2.8     2.9     2.6     3.0     2.9     1.9

Canada .............     4.3     7.8     4.8     7.8      .2     -.9     3.4    -1.1    -4.7
Mexico .............     1.0     8.5    -6.4     -.1     -.9     6.6     2.0    15.6     2.8

Australia ..........     4.3     8.5     -.6     9.8     3.2     -.8    10.5    -1.8   -10.0
Hong Kong SAR 1 ....     9.0    14.7     2.8    13.1     8.5     4.3     6.6     5.4      .9
Israel .............     7.6    11.0     1.4    16.1     4.3     4.5     7.4     6.4     -.2
Japan ..............     8.1    13.0     2.8    15.1    13.2    -8.8   -12.2    -7.4    -6.8

Korea ..............    12.7    24.6     5.1    24.7    14.5   -11.6    12.8   -10.8   -31.4
New Zealand ........     4.7    10.7    -3.5    13.3     3.9    -3.1     9.1     -.1   -16.6
Singapore ..........    10.2    12.1    10.6     8.9    14.2     2.0    13.5    -1.0    -5.7
Sri Lanka ..........     2.3    -4.7     4.9     4.6     6.5     -.7      .0    -4.2     2.2
Taiwan .............    11.8    20.1     8.4    21.2     8.5    -4.0      .2    -1.0   -10.7

Austria ............     7.2    14.5    -3.1    18.6     7.4    -4.3    -2.0   -11.7     1.1
Belgium ............     5.7    15.4    -7.3    16.4     6.8    -4.6    -2.9   -11.9     1.3
Denmark ............     5.7    11.5    -5.6    17.3     5.9    -1.9      .2    -8.6     3.0
Finland ............     6.9    12.3     -.2    20.8     2.8    -3.7    -2.4    -9.3      .9

France .............     6.3    14.6    -3.4    15.5     5.3    -3.0     -.4    -9.7     1.6
Germany, Former West     6.7    14.2    -4.9    18.1     7.7    -4.1    -1.8   -11.1      .9
Germany, Unified....     -       -       -       -       -      -4.1    -1.8   -11.1     1.1
Greece .............     7.5    17.2     -.4    13.1     6.3    -1.0     4.6    -4.1    -3.2
Ireland ............     6.7    14.4     -.1    14.5     3.1     -.6     2.1    -2.2    -1.6

Italy ..............     5.8    11.8    -1.3    18.0    -1.5     1.8     9.4    -1.0    -2.6
Luxembourg .........  (2)6.1    13.1    -8.3    16.5     6.9      -     -3.4      -       -
Netherlands ........     5.1    12.9    -6.2    15.6     5.9    -5.0    -3.9   -10.7     -.2
Norway .............     5.6    11.4    -2.2    15.7     2.6     -.9     2.7    -5.3     -.1

Portugal ...........     5.6     5.4    -5.8    19.8     7.3      .7     3.9    -3.6     1.9
Spain ..............     7.1    18.4    -4.6    19.6     2.5    -2.0     4.9    -9.4     -.8
Sweden .............     5.0    11.7    -5.0    16.7      .5      .9    13.7    -8.8     -.9
Switzerland ........     6.2    12.7    -2.7    16.6     7.0    -5.9    -3.3   -14.6      .8
United Kingdom .....     7.1    17.5    -3.7    15.2     1.5     6.3     3.1     9.8     6.2

Trade-weighted measures 3,4
All 28 foreign econ.     6.4    12.5     1.0    12.8     5.6    -2.2      .3    -2.2    -4.1
less Mexico, Israel      7.0    13.0     1.7    14.1     6.3    -3.2      .1    -4.2    -4.8
OECD 5 .............     5.9    12.0      .1    12.4     5.1    -2.4     -.4    -2.6    -3.8
less Mexico, Korea6      6.1    11.8      .7    13.3     5.3    -3.1    -1.4    -4.5    -3.1
Europe .............     6.3    14.5    -4.1    16.7     4.4    -1.1     1.1    -5.6     1.4
European Union .....     6.4    14.6    -4.1    16.7     4.3     -.9     1.3    -5.2     1.5
Asian NIEs .........    11.3    18.9     7.0    18.4    11.3    -3.6     7.4    -2.7   -13.6


Rates of change based on compound rate method.
Dash means data not available.
1  Hong Kong Special Administrative Region of China.
2  1975-96.
3  Data for Germany relate to the former West Germany only.
4  Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas.
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5  Organization for Economic Cooperation and Development.
6  Mexico joined the OECD in 1994, and Korea joined in 1996.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

Table 4. Hourly compensation costs in national currency for production workers in manufacturing,
29 countries or areas, selected years, 1975-98


Country or area       1975   1980   1985   1990   1994   1995   1996   1997   1998


United States ......  6.36   9.87  13.01  14.91  16.87  17.19  17.70  18.21  18.56

Canada .............  6.06  10.13  14.95  18.62  21.69  22.10  22.69  22.80  23.29
Mexico .............    18     51    409   4440   8.34   9.69  11.68  14.12  16.78

Australia ..........  4.30   7.43  11.70  16.74  19.30  20.62  21.56  22.30  23.73
Hong Kong SAR 1 ....  3.73   7.50  13.46  24.91  35.65  37.30  39.74  41.99  42.39
Israel .............  1.44  19.42   4.79  17.24  27.66  31.73  36.14  41.52  45.67
Japan ..............   889   1245   1512   1856   2182   2238   2275   2345   2364

Korea ..............   157    583   1074   2623   5141   5620   6611   6973   7042
New Zealand ........  2.65   5.48   8.98  13.98  15.06  15.41  16.04  16.62  17.14
Singapore ..........  2.00   3.20   5.43   6.85   9.61  10.39  11.73  12.25  12.99
Sri Lanka ..........  1.97   3.58   7.58  14.05  22.32  24.45  26.49  26.86  30.10
Taiwan ............. 15.17  36.13  59.60 105.69 146.88 156.86 162.90 169.04 175.81

Austria ............ 78.46 114.78 156.75 201.07 245.88 255.11 262.64 267.50 274.39
Belgium ............235.10 382.88 532.39 640.60 771.23 785.47 801.77 817.19 839.25
Denmark ............ 36.00  60.98  86.18 111.65 129.00 134.77 139.86 145.60 152.11
Finland ............ 16.88  30.64  50.56  80.56  99.76 105.65 108.24 111.04 115.34

France ............. 19.34  37.73  67.49  84.38  97.76  99.77 101.97 105.05 107.88
Germany, Former West 15.48  22.23  28.04  35.37  43.48  45.47  46.95  48.12  49.26
Germany, Unified....   -      -      -      -    42.11  44.14  45.54  46.67  47.87
Greece .............    55    159    506   1071   1876   2124   2309   2514   2632
Ireland ............  1.36   2.89   5.55   7.03   8.28   8.46   8.66   8.94   9.36

Italy ..............  3048   6966  14563  20900  25591  26425  27394  29945  29714
Luxembourg .........   239    352    464    559    680    688    698     -      -
Netherlands ........ 16.59  23.93  29.04  32.90  37.84  38.52  38.91  40.26  40.81
Norway ............. 35.29  57.20  89.11 134.26 147.92 154.44 161.78 168.10 178.98

Portugal ........... 40.26 103.28 263.37 538.11 763.09 804.35 860.39 943.62 988.13
Spain ..............   145    422    792   1161   1545   1604   1712   1793   1814
Sweden ............. 29.73  52.91  83.12 123.98 143.64 153.14 163.46 169.97 175.22
Switzerland ........ 15.72  18.57  23.71  29.00  34.06  34.61  35.03  35.10  35.37
United Kingdom .....  1.52   3.25   4.84   7.12   8.36   8.66   9.03   9.44   9.91


For currency units, see note to table 6.
Dash means data not available.
1  Hong Kong Special Administrative Region of China.


Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

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, 1975-98


Country or area        1975-98 1975-80 1980-85 1985-90 1990-95 1995-98  1996    1997    1998


United States ......     4.8     9.2     5.7     2.8     2.9     2.6     3.0     2.9     1.9

Canada .............     6.0    10.8     8.1     4.5     3.5     1.8     2.7      .5     2.1
Mexico .............    34.6    23.2    51.6    61.1    16.9    20.1    20.5    20.9    18.8

Australia ..........     7.7    11.6     9.5     7.4     4.3     4.8     4.6     3.4     6.4
Hong Kong SAR 1 ....    11.1    15.0    12.4    13.1     8.4     4.4     6.5     5.7     1.0
Israel .............    56.9    68.3   200.9    29.2    13.0    12.9    13.9    14.9    10.0
Japan ..............     4.3     7.0     4.0     4.2     3.8     1.8     1.7     3.1      .8

Korea ..............    18.0    30.0    13.0    19.6    16.5     7.8    17.6     5.5     1.0
New Zealand ........     8.5    15.6    10.4     9.3     2.0     3.6     4.1     3.6     3.1
Singapore ..........     8.5     9.9    11.2     4.8     8.7     7.7    12.9     4.4     6.0
Sri Lanka ..........    12.6    12.7    16.2    13.1    11.7     7.2     8.3     1.4    12.1
Taiwan .............    11.2    19.0    10.5    12.1     8.2     3.9     3.9     3.8     4.0

Austria ............     5.6     7.9     6.4     5.1     4.9     2.5     3.0     1.9     2.6
Belgium ............     5.7    10.2     6.8     3.8     4.2     2.2     2.1     1.9     2.7
Denmark ............     6.5    11.1     7.2     5.3     3.8     4.1     3.8     4.1     4.5
Finland ............     8.7    12.7    10.5     9.8     5.6     3.0     2.5     2.6     3.9

France .............     7.8    14.3    12.3     4.6     3.4     2.6     2.2     3.0     2.7
Germany, Former West     5.2     7.5     4.8     4.8     5.2     2.7     3.3     2.5     2.4
Germany, Unified....     -       -       -       -       -       2.7     3.2     2.5     2.6
Greece .............    18.3    23.7    26.1    16.2    14.7     7.4     8.7     8.9     4.7
Ireland ............     8.7    16.3    13.9     4.8     3.8     3.4     2.4     3.2     4.7

Italy ..............    10.4    18.0    15.9     7.5     4.8     4.0     3.7     9.3     -.8
Luxembourg ......... (2) 5.2     8.1     5.7     3.8     4.2       -     1.5      -       -
Netherlands ........     4.0     7.6     3.9     2.5     3.2     1.9     1.0     3.5     1.4
Norway .............     7.3    10.1     9.3     8.5     2.8     5.0     4.8     3.9     6.5

Portugal ...........    14.9    20.7    20.6    15.4     8.4     7.1     7.0     9.7     4.7
Spain ..............    11.6    23.8    13.4     7.9     6.7     4.2     6.7     4.7     1.2
Sweden .............     8.0    12.2     9.5     8.3     4.3     4.6     6.7     4.0     3.1
Switzerland ........     3.6     3.4     5.0     4.1     3.6      .7     1.2      .2      .8
United Kingdom .....     8.5    16.4     8.3     8.0     4.0     4.6     4.3     4.5     5.0

Trade-weighted measures 3,4
All 28 foreign econ.    10.3    13.6    14.0    11.7     6.3     4.7     5.6     4.7     3.9
less Mexico, Israel      7.2    12.0     8.0     6.4     5.1     3.0     3.9     2.9     2.3
OECD 5 .............     9.7    12.8    12.3    11.7     5.9     4.6     5.3     4.7     3.8
less Mexico, Korea6      6.1    10.5     7.3     5.0     3.9     2.4     2.7     2.6     2.1
Europe .............     7.2    12.4     8.7     5.8     4.4     3.2     3.3     3.8     2.6
European Union .....     7.3    12.8     8.9     5.9     4.4     3.3     3.3     4.0     2.7
Asian NIEs .........    12.6    19.6    11.6    12.9    10.6     5.8     9.9     4.7     3.1


Rates of change based on compound rate method.
Dash means data not available.
1  Hong Kong Special Administrative Region of China.
2  1975-96.
3  Data for Germany relate to the former West Germany only.
4  Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5  Organization for Economic Cooperation and Development.
6  Mexico joined the OECD in 1994, and Korea joined in 1996.


Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

Table 6.  Exchange rates, 29 countries or areas, selected years, 1975-98
(National currency units per U.S. dollar)


Country or area        1975   1980   1985   1990   1994   1995   1996   1997   1998


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  1.366  1.373  1.364  1.385  1.484
Mexico .............. 12.50  22.97  256.9   2813  3.375  6.419  7.600  7.918  9.152

Australia ........... .7647  .8772  1.428  1.281  1.367  1.350  1.277  1.345  1.590
Hong Kong SAR 1 ..... 4.939  4.976  7.791  7.790  7.729  7.736  7.735  7.743  7.747
Israel .............. .6390  5.124  1.179  2.016  3.011  3.011  3.192  3.449  3.800
Japan ............... 296.7  225.7  238.5  145.0  102.2  93.96  108.8  121.1  131.0

Korea ............... 484.0  607.4  870.0  707.8  803.5  771.3  804.5  950.8   1400
New Zealand ......... .8254  1.027  2.010  1.677  1.685  1.524  1.454  1.509  1.865
Singapore ........... 2.371  2.141  2.200  1.813  1.527  1.417  1.410  1.486  1.672
Sri Lanka ........... 7.050  16.53  27.16  40.06  49.42  51.25  55.27  59.00  64.59
Taiwan .............. 38.00  36.02  39.85  26.92  26.47  26.50  27.47  28.78  33.55

Austria ............. 17.40  12.93  20.68  11.33  11.41  10.08  10.59  12.21  12.38
Belgium ............. 36.69  29.20  59.34  33.42  33.43  29.47  30.97  35.81  36.31
Denmark ............. 5.735  5.629  10.60  6.190  6.356  5.600  5.800  6.609  6.703
Finland ............. 3.665  3.719  6.197  3.830  5.234  4.376  4.595  5.196  5.347

France .............. 4.282  4.220  8.980  5.447  5.546  4.986  5.116  5.839  5.900
Germany, Former West  2.455  1.815  2.942  1.617  1.622  1.432  1.505  1.735  1.760
Germany, Unified .....  -      -      -      -    1.622  1.432  1.505  1.735  1.760
Greece .............. 32.29  42.62  138.1  158.5  242.6  231.7  240.7  273.1  295.5
Ireland ............. .4500  .4860  .9379  .6033  .6680  .6236  .6252  .6595  .7019

Italy ............... 652.4  855.1   1909   1198   1611   1629   1543   1704   1737
Luxembourg .......... 36.78  29.24  59.38  33.42  33.46  29.48  30.96     -      -
Netherlands ......... 2.523  1.985  3.318  1.822  1.819  1.604  1.686  1.953  1.984
Norway .............. 5.214  4.936  8.593  6.254  7.055  6.336  6.459  7.086  7.552

Portugal ............ 25.45  50.05  172.1  142.7  165.9  149.9  154.3  175.4  180.3
Spain ............... 57.39  71.64  170.0  102.0  133.9  124.6  126.7  146.5  149.4
Sweden .............. 4.142  4.229  8.603  5.923  7.716  7.141  6.708  7.645  7.952
Switzerland ......... 2.581  1.675  2.455  1.390  1.367  1.181  1.236  1.451  1.451
United Kingdom ...... .4501  .4300  .7708  .5605  .6528  .6335  .6407  .6106  .6034


1 Hong Kong Special Administrative Region of China.

Note:  National currency units are: United States, dollar; Canada, dollar;
Mexico, old peso (1975-92), new peso (1993-98); Australia, dollar; Hong
Kong, dollar; Israel, shekel (1975-84), new shekel (1985-98); Japan, yen;
Korea, won; New Zealand, dollar; Singapore, dollar; Sri Lanka, rupee;
Taiwan, dollar; Austria, schilling; Belgium, franc; Denmark, krone;
Finland, markka; France, franc; Germany, mark; Greece, drachma;
Ireland, pound; Italy, lira; Luxembourg, franc; Netherlands, guilder;
Norway, krone; Portugal, escudo; Spain, peseta; Sweden, krona;
Switzerland, franc; United Kingdom, pound.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

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, 1975-98


Country or area          1975-98 1975-80 1980-85 1985-90 1990-95 1995-98  1996    1997    1998


United States ........      -       -       -       -       -       -       -       -       -

Canada ...............    -1.6    -2.7    -3.1     3.2    -3.2    -2.6      .7    -1.5    -6.7
Mexico ...............   -24.9   -11.5   -38.3   -38.0   -15.2   -11.2   -15.5    -4.0   -13.5

Australia ............    -3.1    -2.7    -9.3     2.2    -1.0    -5.3     5.7    -5.1   -15.4
Hong Kong SAR 1 ......    -1.9     -.1    -8.6      .0      .1      .0      .0     -.1     -.1
Israel ...............   -31.5   -34.1   -66.3   -10.2    -7.7    -7.5    -5.7    -7.5    -9.2
Japan ................     3.6     5.6    -1.1    10.5     9.1   -10.5   -13.6   -10.2    -7.6

Korea ................    -4.5    -4.4    -6.9     4.2    -1.7   -18.0    -4.1   -15.4   -32.1
New Zealand ..........    -3.5    -4.3   -12.6     3.7     1.9    -6.5     4.8    -3.6   -19.1
Singapore ............     1.5     2.1     -.5     3.9     5.1    -5.4      .5    -5.1   -11.1
Sri Lanka ............    -9.2   -15.7    -9.5    -7.5    -4.8    -7.4    -7.3    -6.3    -8.7
Taiwan ...............      .5     1.1    -2.0     8.2      .3    -7.6    -3.5    -4.6   -14.2

Austria ..............     1.5     6.1    -9.0    12.8     2.4    -6.6    -4.8   -13.3    -1.4
Belgium ..............      .0     4.7   -13.2    12.2     2.5    -6.7    -4.8   -13.5    -1.4
Denmark ..............     -.7      .4   -11.9    11.4     2.0    -5.8    -3.4   -12.2    -1.4
Finland ..............    -1.6     -.3    -9.7    10.1    -2.6    -6.5    -4.8   -11.6    -2.8

France ...............    -1.4      .3   -14.0    10.5     1.8    -5.5    -2.5   -12.4    -1.0
Germany, Former West .     1.5     6.2    -9.2    12.7     2.5    -6.6    -4.9   -13.3    -1.4
Germany, Unified......     -       -       -       -       -      -6.6    -4.9   -13.3    -1.4
Greece ...............    -9.2    -5.4   -21.0    -2.7    -7.3    -7.8    -3.7   -11.9    -7.6
Ireland ..............    -1.9    -1.5   -12.3     9.2     -.7    -3.9     -.3    -5.2    -6.0

Italy ................    -4.2    -5.3   -14.8     9.8    -6.0    -2.1     5.6    -9.4    -1.9
Luxembourg ...........  (2) .8     4.7   -13.2    12.2     2.5      -     -4.8      -       -
Netherlands ..........     1.1     4.9    -9.8    12.7     2.6    -6.8    -4.9   -13.7    -1.6
Norway ...............    -1.6     1.1   -10.5     6.6     -.3    -5.7    -1.9    -8.8    -6.2

Portugal .............    -8.2   -12.7   -21.9     3.8    -1.0    -6.0    -2.9   -12.0    -2.7
Spain ................    -4.1    -4.3   -15.9    10.8    -3.9    -5.9    -1.7   -13.5    -1.9
Sweden ...............    -2.8     -.4   -13.2     7.8    -3.7    -3.5     6.5   -12.3    -3.9
Switzerland ..........     2.5     9.0    -7.4    12.0     3.3    -6.6    -4.4   -14.8      .0
United Kingdom .......    -1.3      .9   -11.0     6.6    -2.4     1.6    -1.1     4.9     1.2

Trade-weighted measures 3,4
All 28 foreign econ.      -2.8     -.5    -9.4     2.9     -.4    -6.5    -4.9    -6.6    -7.6
less Mexico, Israel...     -.1     1.0    -5.8     7.3     1.2    -6.0    -3.8    -6.9    -6.9
OECD 5 ...............    -2.8     -.3    -9.6     2.8     -.6    -6.6    -5.3    -6.9    -7.2
less Mexico, Korea 6        .1     1.3    -6.1     7.9     1.4    -5.4    -4.0    -6.8    -5.0
Europe ...............     -.7     2.0   -11.7    10.3      .0    -4.3    -2.1    -9.1    -1.2
European Union .......     -.9     1.7   -11.9    10.3     -.1    -4.1    -2.0    -8.9    -1.2
Asian NIEs ...........    -1.1     -.5    -4.2     4.9      .7    -8.8    -2.3    -7.0   -16.3


Rates of change based on compound rate method.
1  Hong Kong Special Administrative Region of China.
2  1975-96.
3  Data for Germany relate to the former West Germany only.
4  Trade-weighted percent changes computed as the trade-weighted
average of the rates of change for the individual countries or areas.
For description of trade-weighted measures and economic groups,
see the Technical Notes preceding these tables.
5  Organization for Economic Cooperation and Development.
6  Mexico joined the OECD in 1994, and Korea joined in 1996.



Source:  U.S. Department of Labor, Bureau of Labor Statistics, January 2000.

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 of 
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 SAR.  Average of selected manufacturing industries.  The industries 
covered accounted for about 70 percent of all persons employed in manufacturing 
in 1988.  Compensation excludes overtime pay.  Hong Kong became a Special 
Administrative Region (SAR) of China in July 1997.

Austria.  Excludes workers in establishments considered handicraft 
manufacturers.  (All printing and publishing and miscel-laneous manufacturing 
establishments are classified in handi-crafts.)  In 1986, handicraft employment 
was about 35 percent of all manufacturing employment.  Average compensation per 
employee was about 10 percent lower in manufacturing including handicrafts than 
in manufacturing excluding handicrafts.

Finland.  Includes workers in mining and electrical power plants.  For 
comparability with other countries, compensation excludes some obligatory 
training and plant facilities costs; these costs would add 1.6 percent to 
average hourly compensation costs in 1994.

Germany.  Excludes workers in establishments considered handicraft 
manufacturers.  In 1990, handicraft employment in the former West Germany was 
about 25 percent of all manufacturing employment.  Average hourly earnings of 
production workers were about 3 percent lower in manufacturing including 
handicrafts than in manufacturing excluding handicrafts.

Ireland.  Data refer to September for 1975.

Norway.  For comparability with other countries, compen-sation 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 SAR, Korea, Singapore, 
and Taiwan.

The trade weighted measures relate to all the countries or areas covered in the 
series.  Data for Germany relate to the former West Germany.  Estimates are 
computed for missing country data using the average trend in other economies to 
estimate the missing data.  Trade weighted average percent changes for the 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 SAR 1      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 3                71.1
Finland               .2        Europe                23.4
France               3.2        European Union        22.1
Germany 2            5.4        Asian NIEs            12.2
1 Hong Kong Special Administrative Region of China.
2 Former West Germany.
3 Organization for Economic Cooperation and Development.


Data limitations

Because compensation is partly estimated, the statistics should not be 
considered as precise measures of comparative compen-sation 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 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.