Academic journal article Monthly Labor Review

International Comparisons of Manufacturing Compensation

Academic journal article Monthly Labor Review

International Comparisons of Manufacturing Compensation

Article excerpt

Japan and many Western European economies had higher manufacturing hourly compensation costs than the United States in 1994; the trade-weighted average for 24 foreign economies was 88 percent of the U. S. level

In 1994, hourly compensation costs for manufacturing production workers in Japan rose to a new high of 125 percent of the U.S. average. Costs in most of the 14 European countries for which 1994 data are available also rose relative to the United States, reaching a trade-weighted average of 115 percent of U.S. costs, about the same relative level as in 1991 but below the 1992 peak of 123 percent. Relative compensation costs in the Asian newly industrializing economies (NIE's) of Hong Kong, Korea, Singapore, and Taiwan rose to a new high of 34 percent of U.S. costs, while those in Canada declined to 92 percent. Costs in Mexico remained unchanged, at 15 percent of the U.S. level.

For the 24 foreign economies for which 1994 data are available, trade-weighted average costs increased to 88 percent of U.S. costs, 2 percentage points above the 1993 level, and matching the previous high in 1992.(1)

This article presents comparative data on manufacturing hourly compensation costs through 1994 for the United States and 24 foreign economies, as well as the most recent statistics for 4 additional countries for which 1994 data are not yet available. Table 1 presents hourly compensation costs for selected years for each of the 29 economies and for selected trade-weighted economic groups(2) indexed to the U.S. level. Table 2 shows average annual percent changes for selected countries and economic groups, and table 3 contains data on the structure of compensation. (Measures for the "foreign economies" are computed both including and excluding Mexico and Israel because the rapid rates of inflation in those two countries in earlier years distort the trade-weighted average percent changes measured in national currencies. Chart 1 shows the trend in hourly compensation in U.S. dollars over the period 1975-94 for selected countries and economic groups, and chart 2 shows the structure of compensation in 1994 for selected countries.

[TABULAR DATA 1 & 2 OMITTED]

Table 3
Pay for time worked, other direct pay, total
as a direct pay, and social insurance expenditures
as a percent of hourly compensation costs for
production workers in manufacturing, 29
countries or areas, 1994

Country            Pay for     Other     Total     Social
or area             time      direct    direct     insurance
                   worked       pay       pay      expenditures

United States       70.5        6.3      76.9         23.1
Canada              74.5        9.6      84.1         15.9
Mexico               -           -       88.7         11.3
Australia           73.5        9.9      83.5         16.5
Hong Kong            -           -       96.8          3.2
Israel               -           -       82.5         17.5
Japan               58.8       27.6      86.4         13.6
Korea                -           -       85.2         14.8
New Zealand         81.6       12.4      94.0          6.0
Singapore           65.3       18.2      83.6         16.4

Sri Lanka(1)        67.6       18.1      85.7         14.3
Taiwan               -           -       92.6          7.4
Austria             49.8       23.3      73.1         26.9
Belgium             52.3       20.3      72.6         27.4
Denmark             82.4       12.7      95.1          4.9
Finland             56.1       17.9      74.0         26.0
France              54.2       16.6      70.8         29.2
Germany(2)          55.3       20.5      75.8         24.2
Greece(3)           61.7       18.5      80.2         19.8
Ireland(1)          74.3       10.0      84.3         15.7

Italy               50.3       19.1      69.4         30.6
Luxembourg(4)       70. … 
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