Taiwan had the largest unit labor cost decline in 2002 (in U.S. dollar terms). The United States and Canada were the only other economies among the 14 studied with a decline in unit labor costs in 2002.
In 2002, the U.S. dollar depreciated against the currencies of most countries in this comparison, particularly against the Norwegian krone. This depreciation reversed a seven-year trend when the U.S. dollar recorded annual average appreciation against most other currencies.
Because of the dollar's depreciation, the unit labor costs of all European countries and of Korea increased more when expressed in U.S. dollars than in national currencies. In Sweden, a krona-denominated 4.1-percent decline in unit labor costs changed to a 2.0-percent increase in dollar terms when exchange rates were taken into account.
The European increases in dollar-denominated unit labor costs were all well above the average annual rates of increase since 1979. The increase in Korean unit labor costs, expressed in U.S. dollars, was the largest since 1995.
These data are from the Foreign Labor Statistics program. This article updates an item that appeared in The Editor’s Desk in 2003: "Manufacturing unit labor costs lower in 2002 in U.S., Japan, Taiwan". For more information, see news release, "International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends, Revised Data for 2002" (PDF) (TXT), USDL 04-488. Unit labor costs are defined as the cost of labor input required to produce one unit of output. They are computed as labor compensation in nominal terms divided by real output.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Manufacturing unit labor costs fell in 2002 in U.S., Canada, Taiwan at https://www.bls.gov/opub/ted/2004/mar/wk5/art04.htm (visited December 06, 2022).