March 09, 2005
Japan had the largest drop in unit labor costs in 2003 (in U.S. dollar terms). Taiwan and the United States were the only other economies among the 15 studied with a decline in unit labor costs in 2003.
In 2003, the dollar decreased in value against the currencies of all the other 14 economies compared, especially against the euro and other European currencies. This resulted in substantially higher unit labor costs in U.S. dollar terms for most of these economies.
Unit labor costs in U.S. dollars declined only where the U.S. dollar's depreciation was slight (Taiwan) or where the reduction in unit labor costs in national currency units was very large (Japan).
These data are from the Foreign Labor Statistics program. This article updates an item that appeared in The Editor’s Desk in 2004: "Manufacturing unit labor costs lower in 2003 in Taiwan". For more information, see news release, "International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends, Revised Data for 2003" (PDF) (TXT), USDL 05-308. 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.