January 05, 2007 (The Editor’s Desk is updated each business day.)

Labor costs in China’s manufacturing sector

In 2004, average hourly compensation in the manufacturing sector in China was a small fraction of that found in many of China’s largest trade partners, according to a recent study.

[Chart data—TXT]

Erin Lett and Judith Banister estimate that average hourly manufacturing compensation for China in 2004 was about 3 percent of the average hourly compensation costs of $22.87 for production workers in the United States for the same year. 

Employees in China’s urban areas were compensated at a higher rate ($1.19 per hour) than those employed in town and village enterprises ($0.45 per hour).

Data in the chart (except for China) are from the BLS Foreign Labor Statistics program and refer to manufacturing production workers. Compensation data for China are for all manufacturing employees and are not official BLS data; they are from the article, "Labor costs of manufacturing employees in China: an update to 2003–04," by Erin Lett and Judith Banister, Monthly Labor Review, November 2006.