November 23, 2004 (The Editor’s Desk is updated each business day.)

Hourly compensation in U.S. and foreign factories, 2003

In the United States, hourly compensation costs for production workers in manufacturing increased to $21.97 in 2003.

[Chart data—TXT]

Average costs in the United States were higher than those in all the economies covered outside Europe, but ten European countries had higher hourly compensation costs (expressed in U.S. dollars) than did the United States. 

The strength of the European currencies in 2003 drove costs in U.S. dollars up. Costs in the countries which use the euro as a currency rose the most, while costs in several of the European countries that do not use the euro (for example, the United Kingdom) rose less. The average for the 18 European countries in 2003 rose to more than $24 per hour. Costs in Germany nearly reached the $30 level. 

Compensation costs in U.S. dollars in Canada also grew. In contrast, Mexican costs dropped. The drop was associated with a weakening peso and an increase in compensation costs on a national currency basis that was lower than average. 

These data are from the Foreign Labor Statistics program. The Asian newly industrializing economies are Hong Kong, Korea, Singapore, and Taiwan. For more information, see International Comparisons of Hourly Compensation Costs for Production Workers in Manufacturing, 2003 (PDF) (TXT), news release USDL 04-2343. Hourly compensation costs include (1) hourly direct pay and (2) employer social insurance expenditures and other labor taxes.