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For release 10:00 a.m.

(EST) Wednesday, December 19, 2012

USDL-12-2460

Technical Information: (202) 691-5654 • ilchelp@bls.gov • www.bls.gov/ilc
Media Contact:
(202) 691-5902 • PressOffice@bls.gov

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
Norway

64.15

Switzerland

60.40

Belgium

54.77

Denmark

51.67

Sweden

49.12

Spain

28.44

New Zealand

23.38

Singapore

22.60

Greece

21.78

Israel

21.42

Germany

47.38

Korea, Republic of

Australia

46.29

Argentina

18.91
15.91

Finland

44.14

Czech Republic

13.13

Austria

43.16

Portugal

12.91

Netherlands

42.26

Slovakia

11.77

France

42.12

Brazil

11.65

Estonia

10.39

Ireland

39.83

Canada

36.56

Taiwan

9.34

Italy

36.17

Hungary

9.17

Japan

35.71

Poland

8.83

United States
States
United

35.53

Mexico

United Kingdom

30.77
0

20

40

U.S. Dollars

6.48

Philippines
60

2.01
0

20

40

U.S. Dollars

60

This relationship is illustrated in chart 2. dollars) Percent change in value of foreign currency relative to U. resulting in increases in U. Only Greece experienced a decrease in U. dollar-denominated hourly compensation costs. dollar. dollar.S.S.S.S. In 2011. Republic of Poland United Kingdom Canada Mexico Ireland United United States States Greece Argentina Singapore Switzerland Australia Brazil New Zealand Czech Republic Sweden Japan Norway Taiwan Estonia Slovakia Israel Hungary Portugal Germany Belgium Austria Denmark Italy France Finland Philippines Netherlands Spain Korea. where the bars in the right panel for each country can be summed to equal the bars in the left panel. most countries had increases in hourly compensation costs in national currency combined with larger appreciations in national currency relative to the U. 2010-2011 Percent change in hourly compensation (National currency) Percent change in hourly compensation (U. 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. dollar hourly compensation costs.-2- Changes in a country’s compensation costs in U. Chart 2. Republic of Poland United Kingdom Canada Mexico Ireland United States States Greece -30 -20 -10 0 Percent 10 20 30 -30 -20 -10 0 Percent 10 20 30 . dollar Argentina Singapore Switzerland Australia Brazil New Zealand Czech Republic Sweden Japan Norway Taiwan Estonia Slovakia Israel Hungary Portugal Germany Belgium Austria Denmark Italy France Finland Philippines Netherlands Spain Korea. Annual percent change in hourly compensation costs in manufacturing and exchange rates.S.S.S.

(2) Directly-paid benefits are primarily pay for leave time. Benefit components of hourly compensation costs as a percent of total compensation. and pay in kind. and Taiwan. separate measures of directly-paid benefits are not available. bonuses. and contractual social benefit costs. (3) For Republic of Korea. 2011 Social insurance expenditures 1 Directly-paid benefits 2 Sweden Belgium Brazil Mexico3 France Italy Czech Republic Slovakia Estonia Austria Spain United States States Hungary Greece Germany Netherlands Finland Canada Australia Portugal Korea. Republic of 3 Japan Argentina Norway 3 Israel Singapore Ireland United Kingdom Switzerland Taiwan3 Poland Denmark Philippines New Zealand 0 5 10 15 20 25 30 35 40 45 50 Percent (1) Social insurance expenditures are legally required.-3Chart 3. Norway. private. and labor-related taxes minus subsidies. 55 . Mexico.

which usually occur once or twice per month.gov with “subscribe” in the subject line. and Brazil. Australia.htm. Send us your inquiries or feedback. dollars. Belgium.htm.gov/ilc/ichcccountry. Email ILCPR@bls. Detailed time series tables of compensation costs in U.gov or call (202) 691-5654.htm and www. social insurance makes up approximately one-third of total compensation costs.S.gov/ilc/ichccindustry. Compensation costs for sub-manufacturing industries are also available at www. dollars. and Canada. Analyze trends with interactive dashboard.) Economies are ordered based on social insurance expenditures as a percent of total compensation. such as Sweden.S. Feel free to email ILCHelp@bls. In countries with the highest ratio of social insurance costs. In contrast. and pay in kind.gov/ilc/#compensation for additional information. Total benefits surpass 40 percent in 15 countries.bls. The time series data tables in Excel include an interactive dashboard that displays charts from a custom selection of variables. while in the Asian countries social insurance is less than 20 percent. . Directly-paid benefits comprise pay for leave time. Find additional data.supp.gov/ilc/dashboards. 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). and annual indexes for 19962011 are available at www. bonuses.bls. (See table 3 for data in U. The total benefits portion of compensation costs can be seen by combining social insurance with directly-paid benefits.-4- Chart 3 shows the benefit components of manufacturing employers’ compensation costs as a percent of total costs. and time periods at www. The e-newsletter provides links to the latest ILC releases. Go to www. Directly-paid benefits are a relatively smaller portion of costs in countries such as the United States. Subscribe to ILC’s e-newsletter. We appreciate your inquiries and feedback.gov/web/ichcc.htm.bls.toc. Data tables are available by country and industry. In the United States.bls. national currencies. the ratio of benefit costs in the United States is about 33 percent. social insurance costs account for about 24 percent of total compensation.bls. countries.

bls. 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. at www. see Sincavage. the concepts and coverage of Chinese statistics on manufacturing employment and wages often do not follow international standards and can be difficult to understand.95 2005 0. rather than to total manufacturing in the country. “Labor costs in India’s organized manufacturing sector.bls. March 2011. 39-52. May 2010. compensation costs for China and India are not directly comparable to each other or with the data for other countries found in this release. employers’ average compensation costs in formal manufacturing overstate average compensation costs for Indian manufacturing as a whole. see Jessica R. 1. dollars. “Labor costs in India’s organized manufacturing sector.50 0. see www.36 2007 2007 1. For China.25 0. see Judith Banister and George Cook. in U. Largely because of these data gaps and challenges. BLS estimates of compensation costs refer to formal manufacturing only.75 1.25 0. and therefore are presented separately. Sincavage. (3) For a discussion of the limitations associated with comparing compensation costs for China and India.00 1.50 (1) For the most recent BLS work on China.pdf. (2) For the most recent BLS work on India.25 1. For this reason. Unorganized sector manufacturing workers account for approximately 80 percent of total manufacturing employment in India and earn substantially less than their formal sector counterparts.66 2003 0.91 2004 0.-5- China and India BLS has developed estimates of hourly compensation costs for employees in the Chinese and Indian manufacturing sectors.pdf.50 0. pp.85 2003 0. at www.62 0. .73 2004 1. 2 Due to various data gaps and methodological issues.17 2006 0.S.00 0.gov/opub/mlr/2010/05/art1full.” Monthly Labor Review.gov/opub/mlr/2011/03/art4full. “China’s employment and compensation costs in manufacturing through 2008. 3 Data are available for China through 2008 and for India through 2007. BLS estimates for China cannot be considered as robust as the manufacturing statistics for the other countries in this news release. pp.htm and www.00 1.htm.81 0.” Monthly Labor Review.00 0.50 0. 3–22. Further.75 0.81 2005 NA 2008 1.gov/ilc/india. 4 Hourly compensation costs in manufacturing for China and India.25 1.” (4) For additional information on employment and compensation costs in China and India.bls.gov/ilc/china. 2003-2008 India China 2008 1.06 2006 0. For India.bls.

or night work premiums Cost-of-living adjustments Bonuses and premiums paid each pay period Directly-Paid Benefits • • • • • Pay for time not worked (vacations. total compensation for each economy is calculated by adjusting earnings series to include items of direct pay. The selfemployed. social insurance. In general. except sick leave) Seasonal and irregular bonuses Payments in kind Allowances for family events. BLS makes adjustments in order to approximate compensation per hour worked. holidays. . etc. dollars using the average daily exchange rate for the reference year. Definitions. see www. employer confederations. For economies for which earnings data are not available on a per hour worked basis. Compensation Costs Direct Pay Pay for Time Worked • • • • • • Basic wages Piece rate Overtime premiums Shift. and other leave. including part-time and temporary workers. BLS compensation data include nearly all labor costs incurred by employers. Compensation costs are converted to U. 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. and workers in private households are excluded. BLS compensation data permit more meaningful comparisons of employer labor costs than data based solely on average earnings.pdf. and other sources.-6- TECHNICAL NOTES The international comparisons of hourly compensation costs in manufacturing are prepared to assess differences in employer labor costs among countries. unpaid family workers.S. For more detailed information. Below is a summary of the concepts used in this release. Compensation costs include (1) direct pay (all payments made directly to the worker. and labor-related taxes and subsidies not included in earnings. 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). 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. Earnings statistics are typically obtained from annual establishment surveys. contract workers.gov/ilc/ichcctn.bls. commuting. holiday. Data on the other components of compensation are typically obtained from periodic labor cost surveys. The data relate to all employees in manufacturing.

pdf. where possible.S. More information on exceptions to these methods. The compensation measures in this news release are based on statistics available to BLS as of October 2012.bls. compensation costs. The statistics are adjusted.gov/ilc/ichccsources. to account for major differences in worker and survey coverage. the methods and results differ somewhat from those of other BLS series on U.-7- For the United States. as well as data sources used. . may be found in “Country Notes and Data Sources” located at www.

=100 1997(1) 112 132 125 103 109 127 82 97 108 97 108 72 80 86 95 100 84 61 52 53 50 53 40 33 14 28 12 31 NA 31 13 14 15 6 NA=data not available.91 11.70 25.12 47. Hourly compensation costs in manufacturing.38 46.47 1.12 39.95 12.02 29.49 19.15 11.86 16.S.91 22.17 8.07 NA 7.78 21.67 49.04 19.-8- Table 1.44 23.39 9.26 42.04 3.69 18.14 43.S.05 3.38 22.99 23.91 15.45 2.16 42. and as a percent of costs in the United States Hourly Compensation Costs in U.48 2. (1) With the exception of Estonia.15 3.28 9.83 6.28 2011 64.83 36.56 36. dollars.65 10.84 7.77 28.40 54.25 6.17 35.92 23.77 51.77 11.84 30.71 35.15 60.13 12.76 21.91 13. U.42 18.S.29 44.53 30. 1997 is the first year data for all countries are available to BLS.06 12.22 7.61 12.34 9.42 28. dollars Norway Switzerland Belgium Denmark Sweden Germany Australia Finland Austria Netherlands France Ireland Canada Italy Japan United States United Kingdom Spain New Zealand Singapore Greece Israel Korea. Republic of Argentina Czech Republic Portugal Slovakia Brazil Estonia Taiwan Hungary Poland Mexico Philippines 1997(1) 25.93 22.01 U.16 18.45 24.36 24.30 13. 2011 181 170 154 145 138 133 130 124 121 119 119 112 103 102 101 100 87 80 66 64 61 60 53 45 37 36 33 33 29 26 26 25 18 6 .60 21.55 3.

4 5.7 15.3 1.-9- Table 2.6 7.3 4.3 -0.1 3.6 3.4 4.9 7. (1) Exchange rates are value of foreign currency relative to the U.5 -1.6 5.0 2.0 3.5 2.5 4.1 4.1 2.5 8.0 5.3 Exchange rate change(1) -5.5 1.5 1.7 4.0 1.9 2.2 1.0 2.5 4.3 4.1 8.2 8.1 2.9 2.3 4.7 2.6 10.5 2.2 -0.7 0.5 18.5 17.9 2.2 4.4 3.5 2.4 3.4 5.1 4.0 6.0 5.4 -3.5 4.0 7.1 5.S.9 1.1 4.1 -2.5 12.9 3.8 1.9 7.1 1.1 U.3 11.1 0.6 6.9 -1.5 1.7 1.9 6.3 7.7 6.8 7.3 3.1 3.0 4.3 18.2 13.6 3.7 2.5 6.1 5.2 6.1 10.2 3.1 5.1 0.5 1.4 -2.4 7.5 1.0 3.5 1.7 3.3 8.5 4.1 5.9 3.6 5.5 6.9 1.3 5.5 3.3 9.5 3.5 1.7 6.0 NA 10.4 4.1 5.1 0.6 4.7 5.2 5.7 -0.3 4.6 2.9 3. (2) U.1 5.0 5. dollar change(2) 24.4 9.4 5.S.8 4.1 4.7 3.5 5.9 9.8 2010-2011 U. Average annual percent change in hourly compensation costs in manufacturing and exchange rates 1997-2011 Argentina Singapore Switzerland Australia Brazil New Zealand Czech Republic Sweden Japan Norway Taiwan Estonia Slovakia Israel Hungary Portugal Germany Belgium Austria Denmark Italy France Finland Philippines Netherlands Spain Korea.6 4.3 3.1 5.4 1.1 6.5 6.8 9.7 1.1 -7.8 Exchange rate change(1) -9.8 10.6 National currency change 31.0 4.S.4 9.6 1.9 11.7 4.2 2. dollar.S.1 5.0 12.1 5.2 5.8 7.3 1.4 -3.8 2.6 5.7 6.5 4.2 9.4 3.6 2.8 3. Republic of Poland United Kingdom Canada Mexico Ireland United States Greece National currency change 16.7 2.1 4.4 2.6 3.1 5. dollar change(2) 5.2 NA 7.1 4.5 1.4 6.1 NA 3.2 5.2 1.8 5.1 0.7 4. dollar changes are approximately equal to national currency changes plus exchange rate changes for each country.0 0.0 3.1 5.1 2.5 2.6 14.1 7.8 4.4 1. .2 16.7 -0.7 5.1 3.5 1.1 3.1 8.2 8.6 2.7 12.6 8.6 NA=data not available.7 7.2 3.5 13.

44 4.61 6. and labor-related taxes minus subsidies.38 6.13 9.25 9.00 12.83 6.78 21.50 2.35 1.80 6.99 3.01 7.29 21. U.26 9.97 12.53(4) 39.77 11.18 10.91 11.71 35.S.05 5.81 2.77 7.00(4) 4.70 21.39 7.77 51. Data relate to total direct pay.16 1.12 39.65 10.13 12.20 1.70 27.82 24.01 10.72 2.92 26.54 5.57 2.77 3..67 49.17 Direct Pay Directly-Paid Benefits(2) 11.66 0.15 60.17 35.43 22.20 5.18(4) 15.98 15. and contractual social benefit costs.83 36.73 5.42 10.44 23.26 42.51 9.00 3.29 44.23 0.08 1.43 25.56 36.49 10.48 20. Components of hourly compensation costs in manufacturing.70 32.48 2.54 3.20 11. 2011 Hourly Compensation Costs Norway Switzerland Belgium Denmark Sweden Germany Australia Finland Austria Netherlands France Ireland Canada Italy Japan United States United Kingdom Spain New Zealand Singapore Greece Israel Korea.49 2.92 7.60 21.35 2. private.69 1.17 4.03 3.21(4) 8.10 - Table 3.95 0.39 9. (3) Pay for time worked is wages and salaries for time actually worked.77 28.97 16.47 6.40 54.38 46.23 1.25 1.64 4.27 6.91 13.15 27.88 6.12 47.53 30.70 2.64 5.98 9.70 15.69 3.34 9. .38 22.41 8.98 1. Republic of Argentina Czech Republic Portugal Slovakia Brazil Estonia Taiwan Hungary Poland Mexico Philippines Total Social Insurance(1) 64.35 Pay for Time Worked(3) 53.07 8. bonuses.24 9.27 9.59 5.05 7.25 17. (2) Directly-paid benefits are primarily pay for leave time.82 27.63 26.17 8.49 (1) Social insurance expenditures are legally required.49 3. and pay in kind. dollars.43 20.95 4.66 16.91 15.02 3.73 7.07 39.42 18.77 2.22 0.14 43.16 42.23 23.46 8.24 11.59 2. (4) Separate measures of directly-paid benefits and pay for time worked are not available.65 19.19 3.65 4.