Compensation Costs For U.S. Workers Rise Vs Foreign Economies

The average hourly compensation costs in U.S. dollars for U.S. manufacturing production workers increased 3.9% in 2000, while declining in Canada and throughout Europe, according to newly released statistics from the U.S. Dept. of Labor. In fact, the average hourly compensation costs for workers across 28 foreign economies dipped to 76% of the U.S. level in 2000 from 80% in 1999. As a result, relative compensation costs in the United States are higher than in 17 European economies for the first time since 1989. In 2000 average costs in the U.S. were 7% higher than in Europe after being 7% lower in 1999. Compensation costs include pay for time worked, holiday and vacation pay, and employer expenditures for legally required insurance and benefit plans, and for some countries, labor taxes. The declining value of the euro is largely responsible for the lowest compensation costs in Europe since 1993. Hourly compensation costs for U.S. workers averaged $19.86 in 2000. In Mexico compensation costs in U.S. dollars increased by 17.7% in 2000, the largest increase among the 28 foreign economies studied. Despite the increase, Mexico's compensation costs were still just 12% of the U.S. level. Other highlights from the Dept. of Labor include:

  • The former West Germany continued to have the highest compensation costs of the 28 foreign economies at $24.01.
  • Compensation costs in U.S. dollars rose 15.3% in Korea in 2000, the largest increase outside of Mexico.
  • Japanese costs increased 5.3% in 2000 on the strength of the yen, resulting in compensation costs 11% higher than in the U.S.
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