Internet address: http://www.bls.gov/flshome.htm USDL: 01-311 Technical information: (202) 691-5654 For Release: 10:00 A.M. EDT Media contact: (202) 691-5902 Tuesday, September 25, 2001 INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS FOR PRODUCTION WORKERS IN MANUFACTURING, 2000 Average hourly compensation costs in U.S. dollars for production workers in manufacturing in 28 foreign economies declined to 76 percent of the U.S. level in 2000 from 80 percent in 1999, according to the Bureau of Labor Statistics, U.S. Department of Labor. Compensation costs relative to the United States continued to decline in Canada and throughout Europe in 2000, while relative costs rose in Japan, Korea, Mexico, and Taiwan. The recent decline of relative compensation costs in 17 European economies studied resulted in higher compensation costs in the United States than in Europe for the first time since 1989. In 2000, average costs in the United States were 7 percent higher than for Europe, after being 7 percent lower in 1999. Costs in Canada continued to decline relative to the United States, down to 81 percent in 2000 from 90 percent in 1997, while costs in Japan increased to 111 percent of those in the United States. Average costs in the Asian newly industrialized economies (NIEs) of Hong Kong, Korea, Singapore, and Taiwan remained at approximately one-third of the U.S level. (See table 1.) Chart 1. Hourly compensation costs in U.S. dollars for production workers in manufacturing, 1975-2000 PRINTED COPY CONTAINS CHART AT THIS POINT. Compensation costs expressed in U.S. dollars In the United States, hourly compensation costs for production workers were $19.86 in 2000, a 3.9 percent increase from the 1999 level. Hourly compensation costs increased 1.9 percent in the combined 28 foreign economies during 2000, following a 4.9 percent increase in 1999. In Europe, costs declined 8.8 percent in 2000, whereas they increased 7.7 percent in the Asian NIEs during the same time period. Changes over time in compensation costs in U.S. dollars are affected by the underlying national wage and benefit trends measured in national currencies, as well as frequent and sometimes sharp changes in 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). BOX: A NOTE ON THE MEASURES The hourly compensation measures in this news release are based on statistics available to BLS as of June 2001. The 2000 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 of 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. See the Technical Notes for further information regarding definitions, sources, and computation methods and a description of the trade-weighted measures for economic groups. END OF BOX (A NOTE ON THE MEASURES) Table A. Hourly compensation costs, in national currency and in U.S. dollars, for production workers in manufacturing and exchange rates (U.S. dollars per national currency unit) Percent change, 1999-2000 Hourly Hourly Country compensation compensation or area national Exchange U.S. currency Rates dollars North America United States 3.9 - 3.9 Canada 3.3 .0 3.3 Mexico 16.6 1.0 17.7 Asia and Oceania Australia .4 -9.9 -9.6 Hong Kong SAR 1 2.0 -.4 1.7 Israel 6.4 1.5 8.1 Japan -.2 5.5 5.3 Korea 9.6 5.2 15.3 New Zealand 3.1 -13.7 -11.1 Singapore 6.0 -1.7 4.1 Sri Lanka - - - Taiwan 2.8 3.4 6.4 Europe Austria 2.8 -13.3 -10.9 Belgium 1.9 -13.3 -11.7 Denmark 3.1 -13.7 -11.0 Finland 5.5 -13.3 -8.6 France 5.1 -13.3 -8.9 Germany, former West 3.5 -13.4 -10.3 Germany 2 3.5 -13.4 -10.3 Greece - - - Ireland 6.1 -13.3 -8.2 Italy 1.8 -13.3 -11.7 Luxembourg 3.3 -13.3 -10.5 Netherlands 3.3 -13.3 -10.4 Norway 4.1 -11.4 -7.8 Portugal 2.5 -13.4 -11.2 Spain 3.4 -13.3 -10.4 Sweden 3.4 -9.8 -6.8 Switzerland 1.3 -10.9 -9.8 United Kingdom 2.8 -6.3 -3.6 Trade-weighted measures 3,4 All 28 foreign economies 4.1 -2.1 1.9 OECD 5 4.2 -2.6 1.5 less Mexico, Korea 6 2.3 -3.4 -1.3 Europe 3.3 -11.7 -8.8 Asian NIEs 5.2 2.3 7.7 1 Hong Kong Special Administrative Region of China. 2 Referred to as unified Germany in prior news releases. 3 Because data for Germany (referred to as unified Germany in prior news releases) are not available before 1993, data for the former West Germany only are included in the trade-weighted measures. 4 The 1999-2000 percent changes for the trade weighted measures are based upon the changes for the countries or areas for which 2000 data are available. 5 OECD refers to the Organization for Economic Cooperation and Development. 6 Mexico joined the OECD in 1994 and Korea joined in 1996. In Mexico, compensation costs in U.S. dollars increased by 17.7 percent, the largest percent increase among the 28 foreign economies studied. As in 1999, the Mexican peso remained stable relative to the U.S. dollar, and a sharp upward trend in Mexican compensation costs in pesos led to the large increase. Despite increases in the past two years, Mexican compensation costs were only 12 percent of the U.S. level in 2000. (See table A and chart 2.) Continued weakening of the euro was primarily responsible for the lowest compensation costs in Europe since 1993. Average costs in Europe were $18.50 in 2000, dropping from $20.36 in 1999. Compensation costs in all the European countries fell in 2000, with the largest declines in Belgium and Italy (11.7 percent each), while costs in the United Kingdom, the European country with the strongest currency relative to the U.S. dollar in 2000, dropped only 3.6 percent. The former West Germany continued to have the highest compensation costs of the 28 foreign economies at $24.01, 21 percent higher than those in the United States. However, that gap has been narrowing dramatically in recent years; the compensation costs in the former West Germany were 84 percent higher than in the United States in 1995. In 1999, there were nine European countries whose hourly compensation costs were more than 10 percent higher than the United States; following steep declines in Europe in 2000, only Germany, the former West Germany and Norway had costs 10 percent or more above the U.S. level. (See chart 2.) In contrast to Europe, compensation costs in the Asian NIEs rose strongly in 2000 for the second consecutive year, increasing 7.7 percent. Compensation costs in Korea in 2000 rose faster than in any other foreign economy studied except Mexico, increasing 15.3 percent, following a 24.3 percent increase in 1999. Costs also increased in the remaining NIEs. Japanese costs increased 5.3 percent in 2000 due to the strength of the yen, resulting in costs 11 percent higher than in the United States. Chart 2. Indexes of hourly compensation costs in U.S. dollars for for production workers in manufacturing, 1999 PRINTED COPY CONTAINS CHART AT THIS POINT. Compensation costs expressed in national currencies For U.S. competitors, compensation costs in national currency grew at a higher rate in 2000 than in 1999. The trade-weighted average cost increased 4.1 percent for all 28 foreign economies in 2000 compared with 2.8 percent in 1999, returning to the same rate of growth as in 1998. Excluding Mexico and Israel, both of which historically have had high rates of growth, the trade-weighted increase in compensation costs for the foreign economies was 2.8 percent in 2000. Although the 16.6 percent rise in Mexican costs was the highest increase of all countries in 2000, it was the lowest compensation increase in that country in five years. Compensation costs in Asia increased for every economy, with the exception of Japan. Costs grew fastest in Korea at 9.6 percent. In Singapore, costs increased 6.0 percent, partially offsetting a 7.0 percent decline in 1999 that was due to a sharp reduction in employer contribution rates to the national pension plan. Compensation costs in Japan decreased by 0.2 percent, the second consecutive year in which costs have declined in that country. Compensation costs grew in Europe at a rate of 3.3 percent in 2000, rising more than 3 percent for the first time in three years. Costs increased the most in Ireland, Finland, and France, at rates of 6.1, 5.5, and 5.1 percent, respectively. Compensation costs in Belgium, Italy, and Switzerland increased by less than 2 percent. Following the compensation cost growth rates in all regions in 1999, which were the lowest in the 25 years covered by this series, growth rates accelerated in 2000 and were pushed up to or above their 1998 levels. In particular, the Asian NIEs saw renewed growth in compensation costs for 2000, with costs rising 5.2 percent, following an increase of only 1.1 percent in 1999. The increase in Europe was less dramatic, with costs rising 3.3 percent, compared with 2.6 percent in 1999. Growth in the OECD countries was 4.2 percent in 2000, approximately one percentage point higher than in 1999. Exchange rates Appreciation of the dollar against the currencies of most foreign countries continued in 2000 and at a greater rate than in 1999. The trade- weighted value of the currencies of the 28 foreign economies declined 2.1 percent against the dollar in 2000. However, currencies in Mexico, Japan, Korea, Taiwan, and Israel increased in value. For Japan, Korea, and Taiwan, 2000 marked the second consecutive year of currency appreciation against the dollar. The currency values of the three largest U.S. trading partners in the study (as measured by trade weights) either improved or showed no significant change. The Japanese yen (the currency with the second largest trade weight) appreciated 5.5 percent, while the Mexican peso (with the third largest trade weight) increased in value by 1 percent. The largest trading partner in the study, Canada, saw the value of its currency remain essentially the same. The currencies of the Asian NIEs appreciated 2.3 percent on average against the dollar in 2000, the second consecutive year of appreciation following a 16.3 percent depreciation in 1998. The Korean won appreciated 5.2 percent, and the New Taiwan dollar appreciated 3.4 percent. Currencies in Hong Kong and Singapore declined in value, but only slightly. BOX: A NOTE ON EUROPEAN EXCHANGE RATES FOR 1999 AND 2000 On January 1, 1999, several European countries joined the European Monetary Union (EMU): Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. At the same time, currencies of EMU members were established at fixed conversion rates to the euro, the official currency of the EMU. Exchange rates between the national currencies of EMU countries and the U.S. dollar are no longer reported; only the exchange rate between the euro and the U.S. dollar is available. In this news release, exchange rates for 1999 and 2000 in national currencies are calculated for the EMU countries by taking the number of euros per U.S. dollar and then converting euros into national currencies at the fixed conversion rates. The following are the fixed conversion rates between national currencies and the euro for the EMU countries in this release: 1 euro = 13.7603 Austrian Schillings = 40.3399 Belgian Francs = 5.94573 Finnish Markkas = 6.55957 French Francs = 1.95583 German Marks = .787564 Irish Pounds = 1936.27 Italian Lire = 40.3399 Luxembourg Francs = 2.20371 Netherlands Guilders = 200.482 Portuguese Escudos = 166.386 Spanish Pesetas In 1999, 1 euro was equal to 1.0653 U.S. dollars. In 2000, 1 euro was equal to 0.9232 U.S. dollars. END OF BOX (A NOTE ON EUROPEAN EXCHANGE RATES FOR 1999 AND 2000) The European currencies continued to depreciate against the U.S. dollar in 2000, falling a trade-weighted average of 11.7 percent. As in 1997, 1998, and 1999, the British pound remained the strongest European currency in 2000, declining only 6.3 percent against the dollar. The currencies pegged to the euro declined a little more than 13 percent from 1999 to 2000; the largest decline in Europe occurred in Denmark (13.7 percent). The movements of the foreign currencies relative to the U.S. dollar in 2000 had a significant influence on hourly compensation costs measured in U.S. dollars. Hourly compensation costs on a national currency basis in the 28 foreign economies rose 4.1 percent, but, when adjusted for a 2.1 percent depreciation of the foreign currencies against the U.S. dollar, those costs increased only 1.9 percent. The effect that exchange rate changes can have on hourly compensation costs is particularly evident when comparing European labor costs with those of the Asian NIEs. On a national currency basis, the increase in hourly compensation costs in 2000 was only 2 percentage points higher in the Asian NIEs than in Europe. When costs are adjusted for changes in exchange rates in the two regions, however, costs in the Asian NIEs increased 7.7 percent, while costs in Europe declined 8.8 percent. Additional data available In addition to the compensation cost measures covered in this news release, data are available for comparative levels of hourly compensation costs, hourly direct pay, pay for time worked, and the structure of compensation in manufacturing for all years from 1975 through 2000. BLS also computes comparative measures for 39 component manufacturing industries. Data through 1998 are available upon request and via the Internet (http://www.bls.gov/flshome.htm). Data for the component industries are not included in this release; in general, the data limitations for them are greater than for total manufacturing. 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 release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; TDD message referral phone: 1-800-877-8339. This material is in the public domain and, with appropriate credit, may be reproduced without permission. It may be translated into foreign languages without permission, with a separate credit for the translation. BOX: REVISED MEASURES The hourly compensation measures are subject to revision in future updates. In this update, revisions of particular note were made for the following countries: Data for Belgium were revised back to 1993 with the incorporation of 1996 labor cost survey data. For Germany, data were revised back to 1993 (1975 for the former West Germany) to incorporate information available in a new earnings survey begun in October 1999. Additional revisions were made back to 1993 with the incorporation of new data on pay for time not worked and social insurance contributions. For Ireland, revisions were made back to 1975 with the incorporation of earnings data on a new industrial classification, NACE Rev. 1. For Luxembourg, revisions were made back to 1995 with the incorporation of new earnings data. BLS recently received 1996 labor cost survey data from the Statistical Office of the European Communities (EUROSTAT) and is in the process of reviewing the data for incorporation into a future news release. Because 1996 labor cost survey data were available earlier from national statistical offices, data for Germany and Ireland were incorporated in prior BLS updates, and data for Belgium were incorporated in this update. 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, 1975-2000 Country or area 1975 1980 1985 1990 1995 1997 1998 1999 2000 North America United States ......... 100 100 100 100 100 100 100 100 100 Canada ................ 94 88 84 107 94 90 84 82 81 Mexico ................ 23 22 12 11 9 10 10 11 12 Asia and Oceania Australia ............. 88 86 63 88 89 91 80 82 71 Hong Kong SAR 1 ....... 12 15 13 22 28 30 29 29 28 Israel ................ 35 38 31 57 61 66 65 62 65 Japan ................. 47 56 49 86 139 107 98 109 111 Korea ................. 5 10 10 25 42 43 31 37 41 New Zealand ........... 50 53 34 55 58 59 49 48 41 Singapore ............. 13 15 19 25 43 45 42 37 37 Sri Lanka ............. 4 2 2 2 3 3 3 2 - Taiwan ................ 6 10 12 26 35 32 28 29 30 Europe Austria ............... 71 90 58 119 147 120 120 114 98 Belgium ............... 101 133 69 129 161 131 131 125 106 Denmark ............... 99 110 63 121 140 121 122 120 103 Finland ............... 73 84 63 141 140 117 117 112 98 France ................ 71 91 58 104 116 99 98 94 83 Germany, former West.. 99 124 73 146 184 151 148 140 121 Germany 2 ............. - - - - 176 144 141 134 116 Greece ................ 27 38 28 45 53 50 48 - - Ireland ............... 48 61 46 79 80 76 73 71 63 Italy ................. 73 83 59 117 94 96 92 87 74 Luxembourg ............ 102 122 60 112 132 103 101 98 84 Netherlands ........... 104 122 67 121 140 114 115 112 96 Norway ................ 106 117 80 144 142 130 126 125 111 Portugal .............. 25 21 12 25 31 29 30 28 24 Spain ................. 40 60 36 76 75 67 65 63 55 Sweden ................ 113 127 74 140 125 122 119 113 101 Switzerland ........... 96 112 74 140 170 132 131 123 107 United Kingdom ........ 53 77 48 85 80 84 88 86 80 Trade-weighted measures 3,4 All 28 foreign economies 60 67 52 83 95 84 79 80 76 OECD 5 ................ 67 74 57 90 103 90 85 86 82 less Mexico, Korea 6 76 84 65 104 119 103 98 99 93 Europe ................ 80 100 61 116 128 112 111 107 93 Asian NIEs ............ 8 12 13 25 37 37 32 33 34 Dash means data not available. 1 Hong Kong Special Administrative Region of China. 2 Referred to as unified Germany in prior news releases. 3 Because data for Germany (referred to as unified Germany in prior news releases) are not available before 1993, data for the former West Germany only are included in the trade-weighted measures. 4 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, September 2001. Table 2. Hourly compensation costs in U.S. dollars for production workers in manufacturing, 29 countries or areas and selected economic groups, selected years, 1975-2000 Country or area 1975 1980 1985 1990 1995 1997 1998 1999 2000 North America United States ......... $6.36 $9.87 $13.01 $14.91 $17.19 $18.27 $18.59 $19.11 $19.86 Canada ................ 5.96 8.67 10.95 15.95 16.10 16.47 15.60 15.65 16.16 Mexico ................ 1.47 2.21 1.59 1.58 1.51 1.78 1.84 2.09 2.46 Asia and Oceania Australia ............. 5.62 8.47 8.20 13.07 15.27 16.58 14.92 15.66 14.15 Hong Kong SAR 1 ....... .76 1.51 1.73 3.20 4.82 5.42 5.47 5.44 5.53 Israel ................ 2.25 3.79 4.06 8.55 10.54 12.04 12.02 11.91 12.88 Japan ................. 3.00 5.52 6.34 12.80 23.82 19.54 18.29 20.89 22.00 Korea ................. .32 .96 1.23 3.71 7.29 7.86 5.67 7.05 8.13 New Zealand ........... 3.15 5.22 4.38 8.17 9.91 10.80 9.01 9.14 8.13 Singapore ............. .84 1.49 2.47 3.78 7.33 8.24 7.77 7.13 7.42 Sri Lanka ............. .28 .22 .28 .35 .48 .46 .47 .46 - Taiwan ................ .40 1.00 1.50 3.93 5.94 5.91 5.27 5.62 5.98 Europe Austria ............... 4.51 8.88 7.58 17.75 25.32 21.97 22.21 21.85 19.46 Belgium ............... 6.41 13.11 8.97 19.17 27.62 23.98 24.31 23.92 21.11 Denmark ............... 6.28 10.83 8.13 18.04 24.07 22.03 22.69 22.96 20.44 Finland ............... 4.61 8.24 8.16 21.03 24.10 21.32 21.66 21.33 19.50 France ................ 4.52 8.94 7.52 15.49 20.01 17.99 18.28 17.98 16.38 Germany, former West.. 6.29 12.21 9.50 21.81 31.58 27.54 27.43 26.76 24.01 Germany 2 ............. - - - - 30.26 26.36 26.28 25.64 22.99 Greece ................ 1.69 3.73 3.66 6.76 9.17 9.20 8.91 - - Ireland ............... 3.05 6.03 5.99 11.81 13.78 13.83 13.58 13.61 12.50 Italy ................. 4.67 8.15 7.63 17.45 16.22 17.57 17.11 16.60 14.66 Luxembourg ............ 6.50 12.03 7.81 16.74 22.62 18.74 18.70 18.65 16.69 Netherlands ........... 6.58 12.06 8.75 18.06 24.12 20.82 21.40 21.30 19.08 Norway ................ 6.77 11.59 10.37 21.47 24.38 23.72 23.50 23.91 22.05 Portugal .............. 1.58 2.06 1.53 3.77 5.37 5.38 5.48 5.35 4.75 Spain ................. 2.53 5.89 4.66 11.38 12.88 12.24 12.14 12.11 10.85 Sweden ................ 7.18 12.51 9.66 20.93 21.44 22.22 22.02 21.60 20.14 Switzerland ........... 6.09 11.09 9.66 20.86 29.30 24.19 24.38 23.56 21.24 United Kingdom ........ 3.37 7.56 6.27 12.70 13.67 15.42 16.39 16.48 15.88 Trade-weighted measures 3,4 All 28 foreign economies 3.83 6.59 6.74 12.35 16.38 15.30 14.75 15.27 15.16 OECD 5 ................ 4.25 7.30 7.39 13.48 17.74 16.46 15.88 16.48 16.31 less Mexico, Korea 6 4.82 8.30 8.48 15.54 20.39 18.80 18.23 18.83 18.52 Europe ................ 5.09 9.90 7.96 17.30 22.03 20.45 20.67 20.36 18.50 Asian NIEs ............ .52 1.17 1.65 3.72 6.41 6.83 5.91 6.29 6.79 Dash means data not available. 1 Hong Kong Special Administrative Region of China. 2 Referred to as unified Germany in prior news releases. 3 Because data for Germany (referred to as unified Germany in prior news releases) are not available before 1993, data for the former West Germany only are included in the trade-weighted measures. 4 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, September 2001. 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, 1975-2000 Country or area 1975- 1975- 1980- 1985- 1990- 1995- 1998 1999 2000 2000 1980 1985 1990 1995 2000 North America United States ......... 4.7 9.2 5.7 2.8 2.9 2.9 1.8 2.8 3.9 Canada ................ 4.1 7.8 4.8 7.8 .2 .1 -5.3 .3 3.3 Mexico ................ 2.1 8.5 -6.4 -.1 -.9 10.3 3.4 13.6 17.7 Asia and Oceania Australia ............. 3.8 8.5 -.6 9.8 3.2 -1.5 -10.0 5.0 -9.6 Hong Kong SAR 1 ....... 8.3 14.7 2.8 13.1 8.5 2.8 .9 -.5 1.7 Israel ................ 7.2 11.0 1.4 16.1 4.3 4.1 -.2 -.9 8.1 Japan ................. 8.3 13.0 2.8 15.1 13.2 -1.6 -6.4 14.2 5.3 Korea ................. 13.8 24.6 5.1 24.7 14.5 2.2 -27.9 24.3 15.3 New Zealand ........... 3.9 10.6 -3.4 13.3 3.9 -3.9 -16.6 1.4 -11.1 Singapore ............. 9.1 12.1 10.6 8.9 14.2 .2 -5.7 -8.2 4.1 Sri Lanka .............(2)2.1 -4.7 4.9 4.6 6.5 - 2.2 -2.1 - Taiwan ................ 11.4 20.1 8.4 21.2 8.6 .1 -10.8 6.6 6.4 Europe Austria ............... 6.0 14.5 -3.1 18.6 7.4 -5.1 1.1 -1.6 -10.9 Belgium ............... 4.9 15.4 -7.3 16.4 7.6 -5.2 1.4 -1.6 -11.7 Denmark ............... 4.8 11.5 -5.6 17.3 5.9 -3.2 3.0 1.2 -11.0 Finland ............... 5.9 12.3 -.2 20.8 2.8 -4.1 1.6 -1.5 -8.6 France ................ 5.3 14.6 -3.4 15.5 5.3 -3.9 1.6 -1.6 -8.9 Germany, former West .. 5.5 14.2 -4.9 18.1 7.7 -5.3 -.4 -2.4 -10.3 Germany 3 ............. - - - - - -5.3 -.3 -2.4 -10.3 Greece ................(2)7.5 17.2 -.4 13.1 6.3 - -3.2 - - Ireland ............... 5.8 14.6 -.1 14.5 3.1 -1.9 -1.8 .2 -8.2 Italy ................. 4.7 11.8 -1.3 18.0 -1.5 -2.0 -2.6 -3.0 -11.7 Luxembourg ............ 3.8 13.1 -8.3 16.5 6.2 -5.9 -.2 -.3 -10.5 Netherlands ........... 4.4 12.9 -6.2 15.6 6.0 -4.6 2.8 -.5 -10.4 Norway ................ 4.8 11.4 -2.2 15.7 2.6 -2.0 -.9 1.7 -7.8 Portugal .............. 4.5 5.4 -5.8 19.8 7.3 -2.4 1.9 -2.4 -11.2 Spain ................. 6.0 18.4 -4.6 19.6 2.5 -3.4 -.8 -.2 -10.4 Sweden ................ 4.2 11.7 -5.0 16.7 .5 -1.2 -.9 -1.9 -6.8 Switzerland ........... 5.1 12.7 -2.7 16.6 7.0 -6.2 .8 -3.4 -9.8 United Kingdom ........ 6.4 17.5 -3.7 15.2 1.5 3.0 6.3 .5 -3.6 Trade-weighted measures 4,5 All 28 foreign economies 6.2 12.5 1.0 12.8 5.7 .0 -3.9 4.9 1.9 less Mexico, Israel 6.6 13.0 1.7 14.1 6.4 -1.1 -4.7 4.1 .2 OECD 6 ................ 5.7 12.0 .1 12.4 5.1 -.1 -3.6 5.5 1.5 less Mexico, Korea 7 5.7 11.8 .7 13.3 5.4 -1.5 -3.2 3.4 -1.3 Europe ................ 5.4 14.5 -4.1 16.7 4.4 -2.8 1.4 -1.4 -8.8 Asian NIEs ............ 11.1 18.9 7.0 18.4 11.3 1.2 -12.6 7.5 7.7 Rates of change based on compound rate method. Dash means data not available. 1 Hong Kong Special Administrative Region of China. 2 1975-99 for Sri Lanka; 1975-98 for Greece. 3 Referred to as unified Germany in prior news releases. 4 Because data for Germany (referred to as unified Germany in prior news releases) are not available before 1993, data for the former West Germany only are included in the trade-weighted measures. 5 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. 6 Organization for Economic Cooperation and Development. 7 Mexico joined the OECD in 1994, and Korea joined in 1996 Source: U.S. Department of Labor, Bureau of Labor Statistics, September 2001. Table 4. Hourly compensation costs in national currency for production workers in manufacturing, 29 countries or areas, selected years, 1975-2000 Country or area 1975 1980 1985 1990 1995 1997 1998 1999 2000 North America United States ......... 6.36 9.87 13.01 14.91 17.19 18.27 18.59 19.11 19.86 Canada ................ 6.06 10.13 14.95 18.62 22.10 22.81 23.15 23.26 24.02 Mexico ................ 18 51 409 4440 9.69 14.12 16.84 19.98 23.30 Asia and Oceania Australia ............. 4.30 7.43 11.70 16.74 20.62 22.30 23.73 24.26 24.35 Hong Kong SAR 1 ...... 3.73 7.50 13.46 24.91 37.30 41.99 42.39 42.20 43.06 Israel ................ 1.44 19.42 4.79 17.24 31.73 41.52 45.67 49.32 52.50 Japan ................. 889 1245 1512 1856 2238 2367 2396 2375 2371 Korea ................. 157 583 1074 2623 5620 7471 7936 8391 9200 New Zealand ........... 2.60 5.37 8.80 13.70 15.10 16.29 16.79 17.26 17.80 Singapore ............. 2.00 3.20 5.43 6.85 10.39 12.25 12.99 12.08 12.80 Sri Lanka ............. 1.97 3.58 7.58 14.05 24.45 26.86 30.10 32.60 - Taiwan ................ 15.17 36.13 59.60 105.69 157.30 169.96 176.88 181.72 186.84 Europe Austria ............... 78.46 114.78 156.75 201.07 255.24 268.20 274.97 282.31 290.08 Belgium ...............235.10 382.88 532.39 640.60 814.04 858.84 882.83 905.68 922.54 Denmark ............... 36.00 60.98 86.18 111.65 134.77 145.60 152.11 160.49 165.50 Finland ............... 16.88 30.64 50.56 80.56 105.47 110.78 115.81 119.02 125.57 France ................ 19.34 37.73 67.49 84.38 99.77 105.05 107.88 110.71 116.37 Germany, former West 15.43 22.17 27.95 35.27 45.23 47.78 48.28 49.14 50.87 Germany 2 ............. - - - - 43.33 45.74 46.26 47.08 48.71 Greece ................ 55 159 506 1071 2124 2514 2632 - - Ireland ............... 1.37 2.93 5.62 7.13 8.59 9.12 9.53 10.06 10.67 Italy ................. 3048 6966 14563 20900 26425 29945 29714 30186 30739 Luxembourg ........... 239 352 464 559 667 670 679 706 729 Netherlands ........... 16.59 23.93 29.04 32.90 38.69 40.66 42.46 44.07 45.54 Norway ................ 35.29 57.20 89.11 134.26 154.44 168.10 177.46 186.67 194.35 Portugal .............. 40.26 103.28 263.37 538.11 804.35 943.62 988.13 1007.08 1032.05 Spain ................. 145 422 792 1161 1604 1793 1814 1891 1956 Sweden ................ 29.73 52.91 83.12 123.98 153.14 169.87 175.11 178.73 184.77 Switzerland ........... 15.72 18.57 23.71 29.00 34.61 35.10 35.37 35.45 35.90 United Kingdom ....... 1.52 3.25 4.84 7.12 8.66 9.42 9.89 10.19 10.48 For currency units, see note to table 6. Dash means data not available. 1 Hong Kong Special Administrative Region of China. 2 Referred to as unified Germany in prior news releases. Source: U.S. Department of Labor, Bureau of Labor Statistics, September 2001. 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, 1975-2000 Country or area 1975- 1975- 1980- 1985- 1990- 1995- 1998 1999 2000 2000 1980 1985 1990 1995 2000 North America United States ......... 4.7 9.2 5.7 2.8 2.9 2.9 1.8 2.8 3.9 Canada ................ 5.7 10.8 8.1 4.5 3.5 1.7 1.5 .5 3.3 Mexico ................ 33.2 23.2 51.6 61.1 16.9 19.2 19.3 18.6 16.6 Asia and Oceania Australia ............. 7.2 11.6 9.5 7.4 4.3 3.4 6.4 2.2 .4 Hong Kong SAR 1 ....... 10.3 15.0 12.4 13.1 8.4 2.9 1.0 -.4 2.0 Israel ................ 52.2 68.3 200.9 29.2 13.0 10.6 10.0 8.0 6.4 Japan ................. 4.0 7.0 4.0 4.2 3.8 1.2 1.2 -.9 -.2 Korea ................. 17.7 30.0 13.0 19.6 16.5 10.4 6.2 5.7 9.6 New Zealand ........... 8.0 15.6 10.4 9.3 2.0 3.3 3.1 2.8 3.1 Singapore ............. 7.7 9.9 11.2 4.8 8.7 4.3 6.0 -7.0 6.0 Sri Lanka ............(2)12.4 12.7 16.2 13.1 11.7 - 12.1 8.3 - Taiwan ................ 10.6 19.0 10.5 12.1 8.3 3.5 4.1 2.7 2.8 Europe Austria ............... 5.4 7.9 6.4 5.1 4.9 2.6 2.5 2.7 2.8 Belgium ............... 5.6 10.2 6.8 3.8 4.9 2.5 2.8 2.6 1.9 Denmark ............... 6.3 11.1 7.2 5.3 3.8 4.2 4.5 5.5 3.1 Finland ............... 8.4 12.7 10.5 9.8 5.5 3.6 4.5 2.8 5.5 France ................ 7.4 14.3 12.3 4.6 3.4 3.1 2.7 2.6 5.1 Germany, former West .. 4.9 7.5 4.7 4.8 5.1 2.4 1.0 1.8 3.5 Germany 3 ............. - - - - - 2.4 1.1 1.8 3.5 Greece ...............(2)18.3 23.7 26.1 16.2 14.7 - 4.7 - - Ireland ............... 8.6 16.4 13.9 4.9 3.8 4.4 4.5 5.6 6.1 Italy ................. 9.7 18.0 15.9 7.5 4.8 3.1 -.8 1.6 1.8 Luxembourg ............ 4.6 8.1 5.7 3.8 3.6 2 1.3 4.0 3.3 Netherlands ........... 4.1 7.6 3.9 2.5 3.3 3.3 4.4 3.8 3.3 Norway ................ 7.1 10.1 9.3 8.5 2.8 4.7 5.6 5.2 4.1 Portugal .............. 13.9 20.7 20.6 15.4 8.4 5 4.7 1.9 2.5 Spain ................. 11.0 23.8 13.4 7.9 6.7 4.0 1.2 4.2 3.4 Sweden ................ 7.6 12.2 9.5 8.3 4.3 3.8 3.1 2.1 3.4 Switzerland ........... 3.4 3.4 5.0 4.1 3.6 .7 .8 .2 1.3 United Kingdom ........ 8.0 16.4 8.3 8.0 4.0 3.9 5.0 3.0 2.8 Trade-weighted measures 4,5 All 28 foreign economies 9.7 13.6 14.0 11.7 6.3 4.3 4.1 2.8 4.1 less Mexico, Israel 6.8 12.0 8.0 6.4 5.1 2.7 2.4 1.0 2.8 OECD 6 ................ 9.2 12.8 12.3 11.7 5.9 4.4 4.0 3.1 4.2 less Mexico, Korea 7 5.7 10.5 7.3 5.0 3.9 2.1 2.0 1.0 2.3 Europe ................ 6.8 12.4 8.7 5.8 4.4 3.1 2.6 2.6 3.3 Asian NIEs ............ 11.9 19.6 11.6 12.9 10.7 5.5 4.5 1.1 5.2 Rates of change based on compound rate method. Dash means data not available. 1 Hong Kong Special Administrative Region of China. 2 1975-99 for Sri Lanka; 1975-98 for Greece. 3 Referred to as unified Germany in prior news releases. 4 Because data for Germany (referred to as unified Germany in prior news releases) are not available before 1993, data for the former West Germany only are included in the trade-weighted measures. 5 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. 6 Organization for Economic Cooperation and Development. 7 Mexico joined the OECD in 1994, and Korea joined in 1996 Source: U.S. Department of Labor, Bureau of Labor Statistics, September 2001. Table 6. Exchange rates, 29 countries or areas, selected years, 1975-2000 (National currency units per U.S. dollar) Country or area 1975 1980 1985 1990 1995 1997 1998 1999 2000 North America 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 1.373 1.385 1.484 1.486 1.486 Mexico ................ 12.50 22.97 256.9 2813 6.419 7.918 9.152 9.553 9.459 Asia and Oceania Australia ............. .7647 .8772 1.428 1.281 1.350 1.345 1.590 1.549 1.720 Hong Kong SAR 1 .... 4.939 4.976 7.791 7.790 7.736 7.743 7.747 7.759 7.792 Israel ................ .6390 5.124 1.179 2.016 3.011 3.449 3.800 4.140 4.077 Japan ................. 296.7 225.7 238.5 145.0 93.96 121.1 131.0 113.7 107.8 Korea ................. 484.0 607.4 870.0 707.8 771.3 950.8 1400 1190 1131 New Zealand ........... .8254 1.027 2.010 1.677 1.524 1.509 1.865 1.889 2.189 Singapore ............. 2.371 2.141 2.200 1.813 1.417 1.486 1.672 1.695 1.725 Sri Lanka ............. 7.050 16.53 27.16 40.06 51.25 59.00 64.45 70.64 - Taiwan ................ 38.00 36.02 39.85 26.92 26.50 28.78 33.55 32.32 31.26 Europe Austria ............... 17.40 12.93 20.68 11.33 10.08 12.21 12.38 12.92 14.91 Belgium ............... 36.69 29.20 59.34 33.42 29.47 35.81 36.31 37.87 43.70 Denmark ............... 5.735 5.629 10.60 6.190 5.600 6.609 6.703 6.990 8.095 Finland ............... 3.665 3.719 6.197 3.830 4.376 5.196 5.347 5.581 6.440 France ................ 4.282 4.220 8.980 5.447 4.986 5.839 5.900 6.157 7.105 Germany, former West 2.455 1.815 2.942 1.617 1.432 1.735 1.760 1.836 2.119 Germany 2 ............. - - - - 1.432 1.735 1.760 1.836 2.119 Greece ................ 32.29 42.62 138.1 158.5 231.7 273.1 295.5 - - Ireland ............... .4500 .4860 .9379 .6033 .6236 .6595 .7019 .7393 .8531 Italy ................. 652.4 855.1 1909 1198 1629 1704 1737 1818 2097 Luxembourg ............ 36.78 29.24 59.38 33.42 29.48 35.77 36.30 37.87 43.70 Netherlands ........... 2.523 1.985 3.318 1.822 1.604 1.953 1.984 2.069 2.387 Norway ................ 5.214 4.936 8.593 6.254 6.336 7.086 7.552 7.807 8.813 Portugal .............. 25.45 50.05 172.1 142.7 149.9 175.4 180.3 188.2 217.2 Spain ................. 57.39 71.64 170.0 102.0 124.6 146.5 149.4 156.2 180.2 Sweden ................ 4.142 4.229 8.603 5.923 7.141 7.645 7.952 8.274 9.174 Switzerland ........... 2.581 1.675 2.455 1.390 1.181 1.451 1.451 1.505 1.690 United Kingdom ........ .4501 .4300 .7708 .5605 .6335 .6106 .6034 .6184 .6598 1 Hong Kong Special Administrative Region of China. 2 Referred to as unified Germany in prior news releases. Note: National currency units are: United States, dollar; Canada, dollar; Mexico, peso; Australia, dollar; Hong Kong, dollar; Israel, shekel (1975-84), new shekel (1985-2000); 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, September 2001. 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, 1975-2000 Country or area 1975- 1975- 1980- 1985- 1990- 1995- 1998 1999 2000 2000 1980 1985 1990 1995 2000 North America United States ......... - - - - - - - - - Canada ................ -1.5 -2.7 -3.1 3.2 -3.2 -1.6 -6.7 -.1 .0 Mexico ................ -23.3 -11.5 -38.3 -38.0 -15.2 -7.5 -13.5 -4.2 1.0 Asia and Oceania Australia ............. -3.2 -2.7 -9.3 2.2 -1.0 -4.7 -15.4 2.6 -9.9 Hong Kong SAR 1 ....... -1.8 -.1 -8.6 .0 .1 -.1 -.1 -.2 -.4 Israel ................ -29.6 -34.1 -66.3 -10.2 -7.7 -5.9 -9.2 -8.2 1.5 Japan ................. 4.1 5.6 -1.1 10.5 9.1 -2.7 -7.6 15.2 5.5 Korea ................. -3.3 -4.4 -6.9 4.2 -1.7 -7.4 -32.1 17.6 5.2 New Zealand ........... -3.8 -4.3 -12.6 3.7 1.9 -7.0 -19.1 -1.3 -13.7 Singapore ............. 1.3 2.1 -.5 3.9 5.1 -3.9 -11.1 -1.4 -1.7 Sri Lanka ............(2)-9.2 -15.7 -9.5 -7.5 -4.8 - -8.5 -8.8 - Taiwan ................ .8 1.1 -2.0 8.2 .3 -3.2 -14.2 3.8 3.4 Europe Austria ............... .6 6.1 -9.0 12.8 2.4 -7.5 -1.4 -4.2 -13.3 Belgium ............... -.7 4.7 -13.2 12.2 2.5 -7.6 -1.4 -4.1 -13.3 Denmark ............... -1.4 .4 -11.9 11.4 2.0 -7.1 -1.4 -4.1 -13.7 Finland ............... -2.2 -.3 -9.7 10.1 -2.6 -7.4 -2.8 -4.2 -13.3 France ................ -2.0 .3 -14.0 10.5 1.8 -6.8 -1.0 -4.2 -13.3 Germany, former West .. .6 6.2 -9.2 12.7 2.5 -7.5 -1.4 -4.1 -13.4 Germany 3 ............. - - - - - -7.5 -1.4 -4.1 -13.4 Greece ...............(2)-9.2 -5.4 -21.0 -2.7 -7.3 - -7.6 - - Ireland ............... -2.5 -1.5 -12.3 9.2 -.7 -6.1 -6.0 -5.1 -13.3 Italy ................. -4.6 -5.3 -14.8 9.8 -6.0 -4.9 -1.9 -4.5 -13.3 Luxembourg ............ -.7 4.7 -13.2 12.2 2.5 -7.6 -1.5 -4.1 -13.3 Netherlands ........... .2 4.9 -9.8 12.7 2.6 -7.6 -1.6 -4.1 -13.3 Norway ................ -2.1 1.1 -10.5 6.6 -.3 -6.4 -6.2 -3.3 -11.4 Portugal .............. -8.2 -12.7 -21.9 3.8 -1.0 -7 -2.7 -4.2 -13.4 Spain ................. -4.5 -4.3 -15.9 10.8 -3.9 -7.1 -1.9 -4.4 -13.3 Sweden ................ -3.1 -.4 -13.2 7.8 -3.7 -4.9 -3.9 -3.9 -9.8 Switzerland ........... 1.7 9.0 -7.4 12.0 3.3 -6.9 .0 -3.6 -10.9 United Kingdom ........ -1.5 .9 -11.0 6.6 -2.4 -.8 1.2 -2.4 -6.3 Trade-weighted measures 4,5 All 28 foreign economies -2.6 -.5 -9.4 2.9 -.4 -4.0 -7.6 2.3 -2.1 less Mexico, Israel -.1 1.0 -5.8 7.3 1.2 -3.7 -6.9 3.1 -2.5 OECD 6 ................ -2.7 -.3 -9.6 2.8 -.6 -4.2 -7.2 2.5 -2.6 less Mexico, Korea 7 .0 1.3 -6.1 7.9 1.4 -3.6 -5.0 2.5 -3.4 Europe ................ -1.3 2.0 -11.7 10.3 .0 -5.7 -1.2 -3.8 -11.7 Asian NIEs ............ -.7 -.5 -4.2 4.9 .7 -4.0 -16.3 6.0 2.3 Rates of change based on compound rate method. Dash means data not available. 1 Hong Kong Special Administrative Region of China. 2 1975-99 for Sri Lanka; 1975-98 for Greece. 3 Referred to as unified Germany in prior news releases. 4 Because data for Germany (referred to as unified Germany in prior news releases) are not available before 1993, data for the former West Germany only are included in the trade-weighted measures. 5 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. 6 Organization for Economic Cooperation and Development. 7 Mexico joined the OECD in 1994, and Korea joined in 1996 Source: U.S. Department of Labor, Bureau of Labor Statistics, September 2001. 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 miscellaneous manufacturing establishments are classified in handicrafts.) In 1986, handicraft employment was about 35 percent of all manufacturing employment. Average compensation per employee was about 10 percent lower in manufacturing including handicrafts than in manufacturing excluding handicrafts. Finland. Includes workers in mining and electrical power plants. For comparability with other countries, compensation excludes some obligatory training and plant facilities costs; these costs would add 1.6 percent to average hourly compensation costs in 1994. Germany. 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, compensation excludes some obligatory training and plant facilities costs; these costs would add 2.2 percent to average hourly compensation costs in 1994. Trade-weighted measures The trade weights used to compute the average compensation cost measures for selected economic groups are relative importances derived from 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 below. 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. 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. Europe consists of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. 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. The trade-weighted average rates of change are computed as the trade-weighted arithmetic average of the rates of change for the individual countries or areas; the trade-weighted average hourly compensation costs are computed as the trade- weighted arithmetic average of cost levels for the individual countries or areas. Rates of change derived from the trade-weighted average hourly compensation cost levels need not be the same as the trade-weighted average rates of change. Data limitations Because compensation is partly estimated, the statistics should not be considered as precise measures of comparative compensation costs. In addition, the figures are subject to revision as the results of new labor cost surveys or other data used to estimate compensation costs become available. The comparative level figures in this report are averages for all manufacturing industries and are not necessarily representative of all component industries. In the United States and some other countries, such as Japan, differentials in hourly compensation cost levels by industry are quite wide. In contrast, other countries, such as 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.