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  • The Pay Model - 3

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    People in the u.s. Complain about losing manufacturing jobs to Mexico, China, and other nations. The hourly wages For Mexican manufacturing work are about 11 percent of those paid in the United States. Manufacturing productivity in China is about 10 percent of that of U.S. Workers.

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    The Pay Model • 3

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    People in the u.s. Complain about losing manufacturing jobs to Mexico, China, and other nations. The hourly wages For Mexican manufacturing work are about 11 percent of those paid in the United States. Manufacturing productivity in China is about 10 percent of that of U.S. Workers.

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    28 views1 page

    The Pay Model - 3

    Uploaded by

    AnneXu
    People in the u.s. Complain about losing manufacturing jobs to Mexico, China, and other nations. The hourly wages For Mexican manufacturing work are about 11 percent of those paid in the United States. Manufacturing productivity in China is about 10 percent of that of U.S. Workers.

    Copyright:

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    of 1

    The Pay Model • 3

    China* 1 $0.57
    Mexico im $2.50
    Brazil FI~1 $3.03
    Czech Republic -••^.:. -,;;J$5.43
    Taiwan 1 1 $5.97

    Singapore .••.., - 1 $7.45


    Korea ; L,,,^ :, ,, :„-,,] $11.32
    Spain , . •„ 1 $17.10
    Italy „ : • .. :. • • • - ••- i$20.48
    Canada •••• ' - - ' •• - • ' 1 $21.42
    Japan " .... - .,... - ....($21.90
    Ireland : , , . 1 $21.94
    Australia „ . • -- . -. '•• ' '"-'• • .. 1 $23.09
    U.S. 1S23.17
    France . . "' ... 1 $23.89
    U.K. . . :. • -: 1 $24.71
    Sweden • • , " • 1 $28.42
    Netherlands . ' - • 1 $3U.7b
    Germany - "• - - "" • ' I $32.33
    Norway . -, • .. . _ J $34.64
    'Data on China's labor cost is an estimate from 2002 information, released by the China Labour Agency.
    Hourly Compensation Costs for Manufacturing Workers (in U.S. Dollars)
    Source: Bureau of Labor Statistics, April 2006.

    Some in a society attribute job losses (or gains) to differences in compensation. People in the United States
    complain about losing manufacturing jobs to Mexico, China, and other nations. Exhibit 1.1 reveals that the
    hourly wages for Mexican manufacturing work are about 11 percent ($2.50/hour) of those paid in the United
    States ($23.17). China's estimated 57 cents/hour is about 2.5 percent of the U.S. rate and 23 percent of Mexico's.
    However, the value of what is produced also needs to be considered. Manufacturing productivity in China is
    about 10 percent of that of U.S. workers, while Mexican worker productivity is 25 percent of U.S. workers.7

    7 U.S. Department of Labor, Bureau of Labor Statistics, "International Comparisons of Hourly Compensation Costs for Production
    Workers in Manufacturing, 2005"; Marie-Claire Guillard, "A Visual Essay: International Labor Market Comparisons," Monthly Labor
    Review, April 2006, pp. 33-40; www.bls.gov/fls/flsichcc.pdf; For a thorough discussion of quality and incompleteness of data, see
    Judith Banister, "Manufacturing Employment and Compensation in China," Monthly Labor Review, July 2005, www.bls.gov/opub/
    mlr/2005/07/art2full.pdf, and J. Banister, "Manufacturing Earnings and Compensation in China," Monthly Labor Review, August 2005,
    www.bls.gov/opub/mlr/2005/08/art3full.pdf. For Mexican manufacturing labor costs, see Hourly Compensation Costs for Production
    Workers in Manufacturing Industries: Mexico 1975-2004, U.S. Department of Labor, Bureau of Labor Statistics, Office of Productivity
    and Technology, May 19,2006. Also see Thomas Friedman, The World Is Flat (New York: Farrar, Straus & Giroux), 2006.

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