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.