For release 10:00 a.m. (EST) Tuesday, March 8, 2011 USDL-11-0303
Technical Information: (202) 691-5654 ilchelp@bls.gov www.bls.gov/ilc
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INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
IN MANUFACTURING, 2009
Manufacturing hourly compensation costs in the United States in 2009 were
lower than in 12 European countries and Australia, but higher than in 20
other countries covered by the Bureau of Labor Statistics (see chart 1).
U.S. hourly compensation costs rose about 4 percent from the previous year
to $33.53.
The 8 countries with the highest costs in Europe were 30-60 percent higher
than the U.S. level, but costs in Canada and Japan were about 10 percent
lower than the United States (see table 1).
Chart 1. Hourly compensation costs in manufacturing, U.S. dollars, 2009
PDF CONTAINS CHART AT THIS POINT.
Changes in a country’s compensation costs in U.S. dollars are roughly
equivalent to the change in compensation costs in a country’s national
currency plus the change in the value of the country’s currency relative
to the U.S. dollar. This relationship is illustrated in chart 2, where
the bars in the right panel for each country can be summed to equal the
bars in the left panel. In 2009, modest increases or declines in hourly
compensation costs in national currency combined with depreciations in
national currency relative to the U.S. dollar produced declines in U.S.
dollar-denominated hourly compensation costs for 27 out of 33 foreign
countries.
Chart 2. Annual percent change in hourly compensation costs in
manufacturing and exchange rates, 2008-2009
PDF CONTAINS CHART AT THIS POINT.
BOX: China and India
BLS has developed estimates of hourly compensation costs for employees
in the Chinese and Indian manufacturing sectors.(1)(2) Due to various
data gaps and methodological issues, compensation costs for China and
India are not directly comparable to each other or with the data for
other countries found in this release, and therefore are presented
separately.(3)
For China, BLS approximates average hourly compensation costs in
manufacturing by filling important data gaps for hours worked per year
and for benefit components of labor compensation. Further, the concepts
and coverage of Chinese statistics on manufacturing employment and wages
often do not follow international standards and can be difficult to
understand. Largely because of these data gaps and challenges, BLS
estimates for China cannot be considered as robust as the manufacturing
statistics for the other countries in this news release.(4)
For India, BLS estimates of compensation costs refer to organized (or
formal) manufacturing only, rather than to total manufacturing in the
country. Unorganized sector manufacturing workers account for
approximately 80 percent of total manufacturing employment in India and
earn substantially less than their organized sector counterparts. For
this reason, employers’ average compensation costs in organized
manufacturing overstate average compensation costs for Indian
manufacturing as a whole.
Chart 3. Hourly compensation costs in manufacturing for China and India,
in U.S. dollars, 2003-2008
PDF CONTAINS CHART AT THIS POINT.
(1) For the most recent BLS work on China, see Judith Banister and George
Cook, "China’s employment and compensation costs in manufacturing through
2008," Monthly Labor Review, forthcoming March 2011, on the Internet at
www.bls.gov/opub/mlr.
(2) For the most recent BLS work on India, see Jessica R. Sincavage,
"Labor costs in India’s organized manufacturing sector," Monthly Labor
Review, May 2010, pp. 3-22, on the Internet at
www.bls.gov/opub/mlr/2010/05/art1full.pdf.
(3) For a discussion of the limitations associated with comparing
compensation costs for China and India, see Sincavage, "Labor costs in
India’s organized manufacturing sector."
(4) For additional information on employment and compensation costs in
China, see www.bls.gov/ilc/china.htm.
END OF BOX: China and India
Chart 4. Benefit components of hourly compensation costs as a percent
of total compensation, 2009
PDF CONTAINS CHART AT THIS POINT.
Chart 4 shows the benefit components of manufacturing employers’
compensation costs as a percent of total costs. (See table 3 for data
in U.S. dollars.) Economies are ordered based on social insurance
expenditures as a percent of total compensation. In countries with the
highest ratio of social insurance costs, such as Brazil, Sweden, and
France, social insurance makes up approximately one-third of total
compensation costs. In the United States, social insurance costs
account for about 24 percent of total compensation, while in the Asian
countries social insurance is less than 20 percent.
Directly-paid benefits comprise pay for leave time, bonuses, and pay in
kind. The percentage of compensation that is directly-paid benefits
tends to be higher in many European countries (due in large part to
leave pay) and in Japan (where seasonal bonuses are a large portion of
costs). Directly-paid benefits are a relatively smaller portion of
costs in countries such as the United States, Australia, Canada, and
the United Kingdom.
The total benefits portion of compensation costs can be seen by
combining social insurance with directly-paid benefits. Total benefits
surpass 40 percent in 15 countries. In contrast, the ratio of benefit
costs in the United States is about 31 percent.
BOX: Changes in this news release
New country estimates for Estonia: For the first time, this news release
includes data for Estonia.
Revised estimates for Mexico: Compensation cost estimates for Mexico
in this release are significantly higher due to a change in the primary
data source used. This change was made to bring the employment coverage
of BLS estimates for Mexico more in line with that for other countries.
Additional indicators and time series data: Full time series of
compensation costs in U.S. dollars and in national currencies, indexes
of costs, and the components of compensation are available at
www.bls.gov/web/ichcc.supp.toc.htm.
Production worker and trade-weighted data: Compensation costs for
production workers and for trade-weighted country groupings are no longer
shown in this news release. These data are available in the time series
tables at www.bls.gov/web/ichcc.supp.toc.htm. 2009 is the final year for
which updated production worker data will be available.
END OF BOX: Changes in this news release
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Table 1. Hourly compensation costs in manufacturing, U.S. dollars,
and as a percent of costs in the United States
Hourly Compensation Costs
in U.S. dollars U.S.=100
1997(1) 2009 1997 (1) 2009
Norway 26.97 53.89 119 161
Denmark 24.64 49.56 109 148
Belgium 28.23 49.40 125 147
Austria 27.38 48.04 121 143
Germany 29.26 46.52 129 139
Switzerland 28.33 44.29 125 132
Finland 22.17 43.77 98 131
Netherlands 23.44 43.50 103 130
France 24.99 40.08 110 120
Sweden 25.11 39.87 111 119
Ireland 17.15 39.02 76 116
Italy 19.67 34.97 87 104
Australia 19.12 34.62 84 103
United States 22.67 33.53 100 100
United Kingdom 18.24 30.78 80 92
Japan 22.28 30.36 98 91
Canada 18.89 29.60 83 88
Spain 13.91 27.74 61 83
Greece NA 19.23 NA 57
Israel 12.32 18.39 54 55
Singapore 12.15 17.50 54 52
New Zealand 12.37 17.44 55 52
Korea, Republic of 9.42 14.20 42 42
Portugal 6.38 11.95 28 36
Slovakia 2.86 11.24 13 34
Czech Republic 3.24 11.21 14 33
Argentina 7.43 10.14 33 30
Estonia NA 9.83 NA 29
Hungary 3.05 8.62 13 26
Brazil 7.11 8.32 31 25
Taiwan 7.04 7.76 31 23
Poland 3.13 7.50 14 22
Mexico 3.30 5.38 15 16
Philippines 1.14 1.50 5 4
NA=data not available.
(1) With the exception of Estonia and Greece, 1997 is the
first year data are available for all countries.
Table 2. Average annual percent change in hourly compensation
costs in manufacturing and exchange rates
1997-2009 2008-2009
U.S. National Exchange U.S. National Exchange
dollar currency rate dollar currency rate
change change change change change change
(1) (2) (1) (2)
Japan 2.6 0.5 2.2 9.2 -1.0 10.4
United States 3.3 3.3 0.0 4.1 4.1 0.0
Slovakia 12.1 8.1 3.8 3.3 6.0 -2.6
Argentina 2.6 14.5 -10.4 2.0 20.3 -15.3
Switzerland 3.8 1.3 2.4 1.2 1.7 -0.5
Austria 4.8 3.0 1.8 0.5 6.2 -5.4
Spain 5.9 4.1 1.7 0.4 6.1 -5.4
Ireland 7.1 5.7 1.3 -0.9 4.7 -5.4
Denmark 6.0 4.2 1.8 -1.0 4.2 -5.0
Greece NA NA 0.9 -1.8 3.8 -5.4
Brazil 1.3 6.7 -5.0 -1.9 7.0 -8.3
Finland 5.8 4.1 1.7 -2.0 3.5 -5.4
Italy 4.9 3.1 1.7 -2.2 3.3 -5.4
Portugal 5.4 3.6 1.7 -2.4 3.2 -5.4
Netherlands 5.3 3.5 1.8 -2.7 2.8 -5.4
Belgium 4.8 2.9 1.8 -2.8 2.7 -5.4
Philippines 2.4 6.6 -3.9 -3.1 4.3 -7.0
Germany 3.9 2.1 1.8 -3.5 1.9 -5.4
Estonia NA NA NA -5.0 0.0 -5.0
France 4.0 2.2 1.8 -5.1 0.3 -5.4
Israel 3.4 4.5 -1.1 -5.8 3.3 -8.8
Australia 5.1 4.5 0.5 -6.2 1.0 -7.2
Singapore 3.1 2.9 0.2 -7.2 -4.5 -2.8
Norway 5.9 4.9 1.0 -7.4 3.3 -10.4
Czech Republic 10.9 6.5 4.2 -8.1 4.3 -11.9
New Zealand 2.9 3.4 -0.5 -8.8 2.6 -11.1
Canada 3.8 2.2 1.6 -9.5 -3.1 -6.6
Sweden 3.9 3.9 0.0 -9.6 5.1 -14.0
Taiwan 0.8 2.0 -1.1 -10.7 -6.4 -4.5
Hungary 9.0 9.8 -0.7 -11.8 3.7 -14.9
Mexico 4.2 8.9 -4.4 -12.0 6.6 -17.5
Korea, Republic of 3.5 6.1 -2.4 -12.7 1.3 -13.8
United Kingdom 4.5 4.8 -0.4 -13.9 1.9 -15.6
Poland 7.6 7.1 0.4 -20.1 3.5 -22.8
NA=data not available.
(1) U.S. dollar changes are approximately equal to national currency changes
plus exchange rate changes for each country.
(2) Exchange rates are value of foreign currency relative to the U.S. dollar.
Table 3. Components of hourly compensation costs in manufacturing,
U.S. dollars, 2009
Hourly Compensation Costs
Total Direct Pay
Social Directly- Pay for
Insur- Paid Time
Total ance Benefits Worked
(1) (2) (3)
Norway 53.89 9.91 43.97(4)
Denmark 49.56 5.04 8.99 35.53
Belgium 49.40 14.72 9.68 25.00
Austria 48.04 12.16 10.17 25.72
Germany 46.52 10.37 9.24 26.90
Switzerland 44.29 6.57 8.97 28.75
Finland 43.77 9.45 8.69 25.62
Netherlands 43.50 10.05 8.36 25.09
France 40.08 12.51 4.99 22.58
Sweden 39.87 12.69 4.22 22.96
Ireland 39.02 5.96 5.36 27.70
Italy 34.97 10.63 5.15 19.19
Australia 34.62 7.13 3.27 24.22
United States 33.53 7.90 2.60 23.03
United Kingdom 30.78 6.46 3.18 21.14
Japan 30.36 5.42 7.56 17.39
Canada 29.60 5.99 2.92 20.69
Spain 27.74 7.29 5.47 14.99
Greece 19.23 5.31 3.54 10.38
Israel 18.39 2.98 1.39 14.02
Singapore 17.50 2.45 3.41 11.65
New Zealand 17.44 0.52 2.40 14.52
Korea, Republic of 14.20 2.52 11.68(4)
Portugal 11.95 2.41 2.09 7.44
Slovakia 11.24 3.22 1.93 6.10
Czech Republic 11.21 3.06 1.50 6.64
Argentina 10.14 1.77 1.42 6.96
Estonia 9.83 2.58 0.88 6.36
Hungary 8.62 2.24 1.58 4.81
Brazil 8.32 2.70 1.18 4.45
Taiwan 7.76 1.14 6.61(4)
Poland 7.50 1.18 1.77 4.55
Mexico 5.38 1.45 3.93(4)
Philippines 1.50 0.13 0.25 1.13
(1) Social insurance includes labor-related taxes net of subsidies.
(2) Directly-paid benefits are primarily pay for leave time,
bonuses, and pay in kind.
(3) Pay for time worked is wages and salaries for time actually
worked.
(4) Data relate to total direct pay.
TECHNICAL NOTES
The international comparisons of hourly compensation costs in manufacturing
are prepared to assess differences in employer labor costs among countries.
BLS compensation data permit more meaningful comparisons of employer labor
costs than data based solely on average earnings. Definitions of average
earnings differ considerably by country and do not include many items of
labor cost that frequently make up a large portion of total cost. BLS
compensation data include nearly all labor costs incurred by employers.
Below is a summary of the concepts used in this release. For more
detailed information, see http://www.bls.gov/ilc/#compensation.
Definitions. Hourly compensation costs include (1) total hourly direct
pay (all payments made directly to the worker, before payroll deductions
of any kind) (2) social insurance expenditures (employer payments to
secure entitlement to social benefits for employees) and (3) labor-related
taxes.
The data relate to all employees in manufacturing, including part-time
and temporary workers. The self-employed, unpaid family workers, contract
workers, and workers in private households are excluded.
Hourly Compensation Costs
Pay for Time Worked
* Basic wages
* Piece rate
* Overtime premiums
* Shift, holiday, or night work premiums
* Cost-of-living adjustments
* Bonuses and premiums paid each pay period
Directly-Paid Benefits
* Pay for time not worked (vacations, holidays, and other leave, except sick leave)
* Seasonal and irregular bonuses
* Allowances for family events, commuting, etc.
* Payments in kind
* Severance pay explicitly not linked to a collective agreement
Employer Social Insurance Expenditures and Labor-related Taxes
* Retirement and disability pensions
* Health insurance
* Income guarantee insurance and sick leave
* Life and accident insurance
* Occupational injury and illness compensation
* Unemployment insurance
* Severance pay linked to a collective agreement
* Other social insurance expenditures
* Taxes (net of subsidies) on payrolls or employment
Methodology. In general, total compensation for each economy is calculated
by adjusting earnings series to include items of direct pay, social
insurance, and labor-related taxes and subsidies not included in earnings.
For economies for which earnings data are not available on a per hour worked
basis, BLS makes adjustments in order to approximate compensation per hour
worked. Compensation costs are converted to U.S. dollars using the average
daily exchange rate for the reference year.
Earnings statistics are typically obtained from establishment surveys.
Data on the other components of hourly compensation are typically obtained
from periodic labor cost surveys, censuses of manufacturers, employer
confederations, and other sources.
For the United States, the results and methods used differ somewhat from
those used for other BLS series on U.S. compensation costs.
The statistics are adjusted, where possible, 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. More information on exceptions to these methods, as well as
data sources used, can be found in “Country Notes and Sources” located at
http://www.bls.gov/ilc/#compensation.
Data availability. Detailed time series with data for all years from
1996 can be found at http://www.bls.gov/web/ichcc.supp.toc.htm.
The compensation measures in this news release are based on statistics
available to BLS as of December 2010. These measures may be subsequently
revised as data are collected to update compensation measures for
sub-manufacturing industries. Data for sub-manufacturing industries are
available at http://www.bls.gov/ilc/flshcaeindnaics.htm.
United States Department of Labor
