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October 1995, Vol. 118, No.
10
Janet Kmitch, Pedro Laboy, and Sarah Van Damme
I n 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 the 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 several years for each of the 29 economies and for selected trade-weighted economic groups2 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.
This excerpt is from an article published in the October 1995 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 These comparisons are based on 1994 annual average
market exchange rates; therefore, they do not take account of
subsequent changes in relative exchange rates.
2 The trade weights used to compute the average compensation cost measures for the selected economic are the sum of U.S. imports of manufactured products for consumption (customs value) and U.S. exports of domestic manufactured products (f.a.s. value) in 1992 for each country or area and each economic group. A description of the trade weights and trade-weighted measures was published in International Comparisons of Hourly Compensation Costs for Production Workers, 1994, Report 893 (Bureau of Labor Statistics, June 1995).
International comparisons of compensation costs. August 1991.
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