For release 10:00 a.m. (EST) Wednesday, December 19, 2012 USDL-12-2460
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INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS
IN MANUFACTURING, 2011
In comparison with 33 foreign countries covered, U.S. manufacturing hourly
compensation costs in 2011 ranked approximately in the middle at $35.53, the
U.S. Bureau of Labor Statistics reported today (see chart 1). In addition to
Australia, Canada, Italy, and Japan, countries with higher hourly compensation
costs were primarily in northern and western Europe. Countries with lower
hourly compensation costs were primarily in southern and eastern Europe, Asia,
and Latin America.
Between 1997 and 2011, compensation costs in manufacturing as a percent of
U.S. costs (see table 1) increased or remained the same in all economies
compared except Taiwan, improving U.S. cost competitiveness.
Chart 1. Hourly compensation costs in manufacturing, U.S. dollars, 2011
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 2011, most countries had increases in hourly
compensation costs in national currency combined with larger appreciations
in national currency relative to the U.S. dollar, resulting in increases
in U.S. dollar-denominated hourly compensation costs. Only Greece experienced
a decrease in U.S. dollar hourly compensation costs.
Chart 2. Annual percent change in hourly compensation costs in
manufacturing and exchange rates, 2010-2011
PDF CONTAINS CHART AT THIS POINT.
Chart 3. Benefit components of hourly compensation costs as a percent
of total compensation, 2011
PDF CONTAINS CHART AT THIS POINT.
Chart 3 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 Sweden, Belgium, and Brazil, 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, and Canada.
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 33 percent.
Find additional data.
Detailed time series tables of compensation costs in U.S. dollars, national
currencies, and annual indexes for 1996-2011 are available at
www.bls.gov/web/ichcc.supp.toc.htm.
Compensation costs for sub-manufacturing industries are also available at
www.bls.gov/ilc/ichcccountry.htm and www.bls.gov/ilc/ichccindustry.htm. Data
tables are available by country and industry.
Go to www.bls.gov/ilc/#compensation for additional information.
Analyze trends with interactive dashboard.
The time series data tables in Excel include an interactive dashboard that
displays charts from a custom selection of variables, countries, and time
periods at www.bls.gov/ilc/dashboards.htm.
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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. Data are available for China
through 2008 and for India through 2007.(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.
For India, BLS estimates of compensation costs refer to 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
formal sector counterparts. For this reason, employers' average compensation
costs in formal manufacturing overstate average compensation costs for Indian
manufacturing as a whole.(4)
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, March 2011, pp. 39-52, at
www.bls.gov/opub/mlr/2011/03/art4full.pdf.
(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, 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
and India, see www.bls.gov/ilc/china.htm and www.bls.gov/ilc/india.htm.
END OF BOX: China and India
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) 2011 1997 (1) 2011
Norway 25.84 64.15 112 181
Switzerland 30.42 60.40 132 170
Belgium 28.92 54.77 125 154
Denmark 23.70 51.67 103 145
Sweden 25.02 49.12 109 138
Germany 29.16 47.38 127 133
Australia 18.93 46.29 82 130
Finland 22.36 44.14 97 124
Austria 24.91 43.16 108 121
Netherlands 22.45 42.26 97 119
France 24.86 42.12 108 119
Ireland 16.69 39.83 72 112
Canada 18.49 36.56 80 103
Italy 19.76 36.17 86 102
Japan 21.99 35.71 95 101
United States 23.04 35.53 100 100
United Kingdom 19.30 30.77 84 87
Spain 13.95 28.44 61 80
New Zealand 12.06 23.38 52 66
Singapore 12.15 22.60 53 64
Greece 11.61 21.78 50 61
Israel 12.28 21.42 53 60
Korea, Republic of 9.22 18.91 40 53
Argentina 7.55 15.91 33 45
Czech Republic 3.25 13.13 14 37
Portugal 6.45 12.91 28 36
Slovakia 2.84 11.77 12 33
Brazil 7.07 11.65 31 33
Estonia NA 10.39 NA 29
Taiwan 7.04 9.34 31 26
Hungary 3.05 9.17 13 26
Poland 3.15 8.83 14 25
Mexico 3.47 6.48 15 18
Philippines 1.28 2.01 6 6
NA=data not available.
(1) With the exception of Estonia, 1997 is the first year
data for all countries are available to BLS.
Table 2. Average annual percent change in hourly compensation
costs in manufacturing and exchange rates
1997-2011 2010-2011
National Exchange U.S. National Exchange U.S.
currency rate dollar currency rate dollar
change change change change change change
(1) (2) (1) (2)
Argentina 16.7 -9.6 5.5 31.4 -5.2 24.5
Singapore 3.3 1.2 4.5 9.1 8.5 18.3
Switzerland 1.4 3.6 5.0 0.4 17.7 18.2
Australia 4.1 2.4 6.6 3.9 12.3 16.7
Brazil 6.9 -3.1 3.6 9.8 5.2 15.6
New Zealand 3.5 1.3 4.8 4.3 9.8 14.5
Czech Republic 6.0 4.3 10.5 4.9 7.9 13.2
Sweden 3.7 1.2 4.9 1.7 11.1 13.0
Japan 0.5 3.0 3.5 2.1 10.1 12.5
Norway 4.9 1.7 6.7 4.1 7.9 12.3
Taiwan 2.2 -0.1 2.0 4.1 7.2 11.6
Estonia NA NA NA 5.0 5.1 10.4
Slovakia 7.3 3.2 10.7 4.5 5.1 9.8
Israel 4.3 -0.3 4.1 4.6 4.5 9.3
Hungary 8.7 -0.5 8.2 5.6 3.4 9.2
Portugal 3.6 1.4 5.1 3.4 5.1 8.6
Germany 2.0 1.5 3.5 2.9 5.1 8.1
Belgium 3.1 1.5 4.7 2.8 5.1 8.0
Austria 2.4 1.5 4.0 2.7 5.1 7.9
Denmark 4.1 1.5 5.7 2.6 5.1 7.8
Italy 2.9 1.5 4.4 2.5 5.1 7.7
France 2.3 1.5 3.8 2.5 5.1 7.6
Finland 3.5 1.4 5.0 2.2 5.1 7.4
Philippines 6.1 -2.7 3.3 2.9 4.1 7.2
Netherlands 3.1 1.5 4.6 1.7 5.1 6.9
Spain 3.7 1.5 5.2 1.5 5.1 6.7
Korea, Republic of 6.4 -1.1 5.3 2.2 4.4 6.7
Poland 6.9 0.7 7.6 4.5 1.8 6.4
United Kingdom 3.5 -0.1 3.4 1.8 3.8 5.7
Canada 2.5 2.4 5.0 1.5 4.2 5.7
Mexico 8.0 -3.2 4.6 3.9 1.6 5.6
Ireland 5.3 1.1 6.4 -1.0 5.1 4.0
United States 3.1 0.0 3.1 2.1 0.0 2.1
Greece 3.8 0.8 4.6 -7.3 5.1 -2.6
NA=data not available.
(1) Exchange rates are value of foreign currency relative to the U.S. dollar.
(2) U.S. dollar changes are approximately equal to national currency changes
plus exchange rate changes for each country.
Table 3. Components of hourly compensation costs in manufacturing,
U.S. dollars, 2011
Hourly Compensation Costs
Direct Pay
Social Directly- Pay for
Insur- Paid Time
Total ance Benefits Worked
(1) (2) (3)
Norway 64.15 10.98 53.18(4)
Switzerland 60.40 9.25 11.24 39.92
Belgium 54.77 17.64 11.05 26.07
Denmark 51.67 4.97 7.54 39.15
Sweden 49.12 16.18 5.13 27.82
Germany 47.38 10.24 9.44 27.70
Australia 46.29 9.25 4.41 32.63
Finland 44.14 9.20 8.51 26.43
Austria 43.16 11.07 9.26 22.82
Netherlands 42.26 8.97 9.01 24.29
France 42.12 12.61 7.80 21.70
Ireland 39.83 6.39 6.00 27.43
Canada 36.56 7.49 3.59 25.48
Italy 36.17 10.47 5.27 20.43
Japan 35.71 6.46 9.02 20.23
United States 35.53 8.65 3.17 23.70
United Kingdom 30.77 4.73 4.05 21.98
Spain 28.44 7.22 5.57 15.65
New Zealand 23.38 0.99 2.69 19.70
Singapore 22.60 3.64 3.95 15.00
Greece 21.78 5.03 4.08 12.66
Israel 21.42 3.49 1.50 16.42
Korea, Republic of 18.91 3.70 15.21(4)
Argentina 15.91 2.77 2.23 10.92
Czech Republic 13.13 3.59 1.77 7.77
Portugal 12.91 2.54 2.49 7.88
Slovakia 11.77 3.19 2.20 6.38
Brazil 11.65 3.72 1.66 6.27
Estonia 10.39 2.69 0.98 6.73
Taiwan 9.34 1.35 8.00(4)
Hungary 9.17 2.16 1.81 5.20
Poland 8.83 1.25 2.23 5.35
Mexico 6.48 1.95 4.53(4)
Philippines 2.01 0.17 0.35 1.49
(1) Social insurance expenditures are legally required, private,
and contractual social benefit costs, and labor-related
taxes minus 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) Separate measures of directly-paid benefits and pay for time
worked are not available. 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 vary
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 www.bls.gov/ilc/ichcctn.pdf.
Definitions. Compensation costs include (1) direct pay (all
payments made directly to the worker, before payroll deductions of
any kind) and (2) social insurance expenditures (employer payments
to secure entitlement to social benefits for employees) and labor-
related taxes (minus subsidies).
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.
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
* Payments in kind
* Allowances for family events, commuting, etc.
* Payments to employees' savings funds
Employer Social Insurance Expenditures and Labor-related Taxes
* Retirement and disability pensions
* Health insurance
* Income guarantee insurance
* Pay for sick leave
* Life and accident insurance
* Occupational injury and illness compensation
* Unemployment insurance
* Severance pay
* Other social insurance expenditures
* Taxes (minus 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 annual
establishment surveys. Data on the other components of
compensation are typically obtained from periodic labor cost
surveys, employer confederations, and other sources.
For the United States, the methods and results differ somewhat
from those of other BLS series on U.S. compensation costs.
The statistics are adjusted, where possible, to account for major
differences in worker and survey coverage. More information on
exceptions to these methods, as well as data sources used, may be
found in "Country Notes and Data Sources" located at
www.bls.gov/ilc/ichccsources.pdf.
The compensation measures in this news release are based on
statistics available to BLS as of October 2012.
United States Department of Labor
