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Relative levels and changes in manufacturing hourly
compensation costs and relative changes in manufacturing
labor productivity (output per hour) and unit labor costs can be
used to partially assess international competitiveness. These
data are available on a comparative basis only for the
manufacturing sector. Charts 3.1 and
3.2 compare the level
and trends of hourly compensation costs for production workers
in manufacturing. The data are adjusted to U.S. dollars at
market exchange rates. Changes over time in compensation
costs denominated in U.S. dollars reflect the underlying
national wage and benefit trends measured in national
currencies, as well as frequent and sometimes sharp changes
in currency exchange rates. The hourly compensation figures
in U.S. dollars provide comparative measures of employer labor
costs; they do not provide inter-country comparisons of the
purchasing power of worker incomes. Chart 3.3 depicts
employer social insurance expenditures and other labor taxes
as a percent of hourly compensation costs.
Charts 3.4 through
3.7 provide comparisons of manufacturing
productivity growth rates, the composition of productivity growth
in terms of changes in output and hours worked, trends in
unit labor costs, and shares of world manufacturing output. Unit labor costs are defined as the cost of
labor compensation per unit of output. Changes in unit labor
costs reflect the net effect of changes in hourly worker
compensation and in labor productivity. Unit labor costs rise
when compensation per hour rises faster than labor
productivity. Conversely, if labor productivity rises faster than
hourly compensation, unit labor costs decline.
The compensation costs indicators provide the most extensive
country coverage in this chartbook. Twenty-two economies
and the EU-15 are shown on those charts. For productivity, the
coverage is limited to 15 economies.
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