September 29, 2003 (The Editor’s Desk is updated each business day.)

Average foreign compensation stays in line with U.S. factories

On average, hourly compensation costs for production workers in manufacturing in 29 foreign economies remained at 66 percent of the U.S. level in 2002.

[Chart data—TXT]

Although overall compensation relative to the United States remained the same in 2002, relative costs in Europe rose, while relative costs declined in Canada, Japan, and several newly industrializing economies in Asia.

European compensation costs on a national currency basis increased at about the same rate as those in the United States, however, the strength of European currencies in 2002 drove their costs in U.S. dollar terms up more than 9 percent. 

Compensation trends in Asia in 2002 were very different than those in Europe. Costs in U.S. dollars in Japan and the newly industrializing Asian countries except Korea declined more than 2 percent. Moderate growth in costs in Mexico and Canada, which together comprise one-third of the trade-weighted compensation cost average, also helped offset the high growth in compensation costs in Europe.

These data are produced by the Foreign Labor Statistics program.  The Asian NIEs are Hong Kong, Korea, Singapore and Taiwan. There are more details available in "International Comparisons of Hourly Compensation Costs for Production Workers in Manufacturing, 2002" (PDF) (TXT), news release USDL 03-507.