2011 EDITION U.S. D e p a r t m e nt o f L a b o r • B u reau of Labor Statistics 2011 EDITION Charting International Labor Comparisons U.S. Department of Labor Hilda L. Solis, Secretary U.S. Bureau of Labor Statistics Keith Hall, Commissioner August 2011 u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons iii preface W ith ever-expanding global markets, hourly compensation costs and productivity, and international labor statistics have assumed consumer prices. To increase country and indicator a greater role in assessing the relative coverage, data from other organizations also are performance of individual economies and included. (Notes are provided at the end of each in influencing both national and international policy section to detail sources used and to furnish helpful decisions. However, direct comparisons of statistics definitions.) across countries can be misleading, because This edition of Charting International Labor concepts and definitions often differ. To improve the comparability of international labor statistics, the Bureau of Labor Statistics (BLS) International Labor Comparisons (ILC) program adjusts data to a common conceptual framework. The BLS 2011 edition of Charting International Labor Comparisons features 2009 data, as well as trends over time, for the main indicators published by ILC: gross domestic product, labor force, manufacturing Comparisons updates the previous edition, with a revised set of countries and indicators. Country coverage varies by chart and is based primarily on data available from the ILC program. In recent years, ILC has improved its coverage of emerging economies; as a result, country coverage for many indicators has been expanded. For the latest ILC key indicators by country, see Country at a Glance. Contact ILC Division of International Labor Comparisons www.bls.gov/ilc | [email protected] | (202) 691-5654 For the latest updates, we invite you to join our email notification service by sending "subscribe" to [email protected]. iv Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Acknowledgments T his edition of Charting International Labor Comparisons was prepared by the BLS International Labor Comparisons (ILC) program, under the coordination of Elizabeth Crofoot and the overall guidance of Marie-Claire Sodergren and Chris Sparks. ILC team members are: Amy Bixler, Aaron Cobet, Rich Esposito, Jacob Kirchmer, Christopher Morris, Bradley Nicholson, and Andrew Petajan. Cover art and layout design were created by Bruce Boyd, and editorial services were provided by Monica R. Gabor, both of the Office of Publications and Special Studies. u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons v contents page Preface...................................................................................................................................................................................iv Acknowledgments..................................................................................................................................................................v Section 1 Gross Domestic Product Chart 1.1 Gross domestic product, selected countries, in U.S. dollars, 2009......................................................... 9 Chart 1.2 Share of world gross domestic product, selected economies, 1990–2009......................................... 10 Chart 1.3 Manufacturing output as a percent of gross domestic product, selected economies, 1970–2009.................................................................................................................................................. 11 Chart 1.4 Gross domestic product per capita and per employed person, selected countries, in U.S. dollars, 2009................................................................................................................................... 12 Notes Sources and definitions............................................................................................................................. 13 Section 2 Labor Market Chart 2.1 Labor force size, gender composition, and participation rates, selected countries, 2009................... 15 Chart 2.2 Labor force participation rates by sex, selected countries, 2009........................................................... 16 Chart 2.3 Labor force participation rates by age, selected countries, 2009.......................................................... 17 Chart 2.4 Working-age population by labor force status, selected countries, in percent, 2009.......................... 18 Chart 2.5 Employment-population ratios, selected countries, 2007 and 2009..................................................... 19 Chart 2.6 Employment growth, selected countries, average annual rates, 2000–2007 and 2007–2009........................................................................................................................................... 20 Chart 2.7 Part-time employment rates by sex, selected countries, 2009.............................................................. 21 Chart 2.8 Share of employment by sector, selected countries, 2009.................................................................... 22 Chart 2.9 Unemployment rates, selected countries, 2000–2009........................................................................... 23 Chart 2.10 Unemployment rates by age, selected countries, 2009......................................................................... 24 Chart 2.11 Unemployment rates by education, selected countries, 2008.............................................................. 25 Chart 2.12 Various measures of labor underutilization, selected countries, 2009.................................................. 26 Chart 2.13 UR6: A broad rate of labor underutilization, selected countries, 2007 and 2009................................. 27 Notes Sources and definitions............................................................................................................................. 28 Section 3 Competitiveness in Manufacturing Chart 3.1 vi Hourly compensation costs in manufacturing, selected countries, in U.S. dollars, 2009.................... 31 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov contents page Chart 3.2 Hourly compensation costs in manufacturing, selected countries and regions, in U.S. dollars, 2009................................................................................................................................... 32 Chart 3.3 Hourly compensation costs in manufacturing and exchange rates, selected countries, annual percent change, 2008–2009......................................................................................................... 33 Chart 3.4 Growth in manufacturing hourly compensation costs, selected countries, average annual rates, 2000–2007 and 2007–2009.................................................................................. 34 Chart 3.5 Hourly compensation costs in manufacturing, selected countries and regions, annual percent changes, 2004–2009....................................................................................................... 35 Chart 3.6 Components of hourly compensation costs in manufacturing, selected countries, in percent, 2009......................................................................................................................................... 36 Chart 3.7 Manufacturing productivity growth, selected countries, average annual rates, 2000–2007 and 2007–2009....................................................................................................................... 37 Chart 3.8 Manufacturing output growth, selected countries, average annual rates, 2000–2007 and 2007–2009....................................................................................................................... 38 Chart 3.9 Growth in manufacturing hours worked, selected countries, average annual rates, 2000–2007 and 2007–2009....................................................................................................................... 39 Chart 3.10 Growth in manufacturing unit labor costs in national currency, selected countries, average annual rates, 2000–2007 and 2007–2009.................................................................................. 40 Chart 3.11 Growth in manufacturing unit labor costs in U.S. dollars, selected countries, average annual rates, 2000–2007 and 2007–2009.................................................................................. 41 Chart 3.12 Gap between productivity and real hourly compensation in manufacturing, selected countries, 1970–2009................................................................................................................. 42 Notes Sources and definitions............................................................................................................................. 43 Section 4 Consumer Prices Chart 4.1 Measures of consumer price inflation, selected countries, average annual percent changes, 2007–2009.................................................................................................................................................. 45 Chart 4.2 Harmonized indexes of consumer prices, selected countries, average annual percent changes, 2000–2007 and 2007–2009....................................................................................................................... 46 Chart 4.3 Manufacturing compensation and consumer price indexes, selected countries, average annual growth rates, 2007–2009................................................................................................ 47 Chart 4.4 Price of a basket of goods that costs one dollar in the United States, selected countries, 2009........................................................................................................................... 48 Notes Sources and definitions............................................................................................................................. 49 u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons vii 1 Section Gross Domestic Product G ross domestic product (GDP) is a measure of a country’s economic output. GDP per capita and GDP per employed person are related indicators that provide a general picture of a country’s well being. GDP per capita is an indicator of overall wealth in a country, and GDP per employed person is a general indicator of productivity. 8 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Gross domestic product, selected countries, in U.S. dollars, 2009 United States China Japan India Gross domestic product (GDP) was over 14 trillion dollars in the United States and exceeded 3 trillion dollars in only three other countries: China, Japan, and India. Germany United Kingdom France Brazil Italy Mexico Spain Korea, Republic of Canada Australia Poland Netherlands Argentina Belgium Sweden Switzerland Greece Philippines In addition to China and India, other large emerging economies, such as Brazil and Mexico, were among the 10 largest countries in terms of GDP. Austria Norway Czech Republic Portugal Singapore Israel Denmark Hungary Finland Ireland New Zealand Slovakia Estonia 0 1.1 1 2 3 4 5 6 7 8 9 10 11 Trillions of 2009 U.S. dollars NOTE: GDP is converted to U.S. dollars using purchasing power parities (PPP). See section notes. 12 13 14 15 The GDP of the United States was roughly 5 times larger than that of Germany, 10 times larger than that of the Republic of Korea, and 50 times larger than that of Norway. SOURCES: Bureau of Labor Statistics and The World Bank u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 9 Chart 1.2 China’s share of world gross domestic product (GDP) increased steadily during the past two decades, from approximately 5 percent in 1990 to 16 percent in 2009. By 2000, China’s GDP had surpassed Japan’s. Share of world gross domestic product, selected economies, 1990–2009 Percent 100 90 Rest of world 80 70 60 Europe 50 40 As a percent of world GDP, the United States, Europe, and Japan each declined slightly over the last two decades, due largely to China’s growth. 30 The rest of the world’s share of world GDP decreased during the 1990s but grew steadily from 2000 to 2009. 10 United States 20 China Japan 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 SOURCE: The Conference Board 10 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Manufacturing output as a percent of gross domestic product, selected economies, 1970–2009 Percent 45 Over the period, the manufacturing sector’s share of gross domestic product (GDP) declined at about the same rate in Japan, the European Union, and the United States. 40 China 35 30 Japan 25 European Union 20 U.S. manufacturing made up 11 percent of GDP in 2009, compared with 23 percent of GDP in 1970. United States 15 10 5 0 1970 1973 1976 1979 1982 1985 1988 1.3 1991 1994 1997 2000 2003 2006 2009 Manufacturing output as a share of GDP was about one-third in both China and Japan in 1970. The share decreased overall in Japan but rose and fell in China before returning to 1970 levels in 2009. SOURCES: Bureau of Labor Statistics and The World Bank u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 11 Chart 1.4 Norway had the highest gross domestic product (GDP) per capita and per employed person. Gross domestic product per capita and per employed person, selected countries, in U.S. dollars, 2009 Norway United States Ireland Belgium France Singapore Austria Australia Sweden Netherlands GDP per capita in the United States was approximately 7 times larger than that of China. Singapore had the second highest GDP per capita, but only the sixth highest GDP per employed person—indicating a high employment rate in that country. United Kingdom Italy Canada Finland Spain Germany Denmark Japan Slovakia Korea, Republic of Hungary Czech Republic Poland GDP per capita GDP per employed person Mexico Brazil China 0 25,000 50,000 75,000 100,000 125,000 2009 U.S. dollars SOURCES: Bureau of Labor Statistics and The World Bank 12 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Section 1 Notes Section Gross domestic product Sources Definitions Data for most countries are based on the BLS report Gross domestic product (GDP) is the market value of International Comparisons of GDP per Capita and per all goods and services produced in a country. GDP Hour, 1960–2009. Data for the remaining countries per capita is GDP divided by population and is a and all purchasing power parities (PPP) are based on rough measure of a country’s overall wealth. GDP data in the World Bank database World Development per employed person is GDP divided by the number Indicators. A country or region’s share of world gross of employed persons and is a rough measure of a domestic product (GDP) is based on data in The country’s productivity. Purchasing power parities (PPP) Conference Board Total Economy Database. are currency conversion rates that allow output Each country prepares GDP measures in accordance in different currency units to be expressed in a with national accounts principles. To make common unit of value. A PPP is the ratio between international comparisons of levels of GDP, GDP the number of units of a country’s currency and per capita, and GDP per employed person, it is the number of U.S. dollars required to purchase an necessary to express GDP in a common currency equivalent basket of goods and services within each unit. BLS converts GDP from national currency units respective country. to U.S. dollars through the use of PPP. In this section, Europe includes 20 countries: Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 13 2 Section Labor Market L abor force statistics, such as employment and unemployment, are key indicators of the functioning of labor markets both within and across countries. Labor force levels and participation rates provide information on the supply of labor in an economy. Employment focuses on the extent to which people are engaged in productive labor market activities, while measures of labor underutilization, including unemployment, provide information on an economy’s unused or underused labor supply. 14 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Labor force size, gender composition, and participation rates, selected countries, 2009 Women's share of the labor force (percent) 50 United States Europe 45 Canada China and India had the largest workforces, although China had the highest labor force participation rate, while India had the lowest. Australia China Brazil Korea, Republic of Japan Argentina 40 Philippines Mexico 35 2.1 Women made up less than half of the labor force in all countries and Europe, with India having, by far, the lowest proportion of women in the labor market. 30 India 25 20 0 0 55 60 65 70 75 80 Total labor force participation rate (percent) NOTE: Each bubble represents the size of the labor force for that country. Europe includes 21 countries. See section notes. SOURCES: Bureau of Labor Statistics and International Labour Office u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 15 Chart 2.2 Women’s participation rates in India and Mexico were among the lowest; these countries had the largest gender gaps. Labor force participation rates by sex, selected countries, 2009 China Norway Women's participation rate Canada Men's participation rate Male-female gap New Zealand — Sweden Switzerland Denmark Australia Brazil Netherlands United States Finland United Kingdom Portugal Estonia Ireland Labor force participation rates were higher for men than women in all countries, although the size of the gender gap varied considerably. The largest gaps were in Asian and Latin American countries. The highest participation rates for men were in large emerging economies: Brazil, India, Mexico and China. China also had the highest participation rate for women and, thus, a relatively low gender gap. Singapore Austria Argentina Germany Israel France Slovakia Korea, Republic of Philippines Spain Czech Republic Japan Belgium Poland Mexico Greece Hungary Italy India 0 10 20 30 40 50 60 70 80 90 Percent SOURCES: Bureau of Labor Statistics and International Labour Office 16 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov India 15–24 Mexico 25–54 Korea, Republic of 55–64 Philippines 65 and Israel older Italy Hungary Argentina Brazil Poland Ireland Greece United States Australia Japan Spain Singapore United Kingdom New Zealand Chart Labor force participation rates by age, selected countries, 2009 2.3 Participation rates were highest for persons ages 25 to 54 in all countries and lowest for those ages 65 and older in all countries except the Republic of Korea. Belgium In Argentina and the Philippines, more than one-third of persons ages 65 and older were still in the labor force. In contrast, many European countries had rates below 5 percent for this age group. Canada Norway Czech Republic Austria Estonia Finland Germany Portugal Slovakia France Netherlands Denmark Switzerland Sweden China 0 10 20 30 40 50 Percent SOURCE: International Labour Office u.s. Bureau of Labor Statistics | www.bls.gov 60 70 80 90 100 Participation rates among youth varied most across countries. The Netherlands and Australia had the highest participation rates (above 70 percent) while Hungary, the Republic of Korea, and Greece had the lowest rates (under 30 percent). august 2011 | Charting International Labor Comparisons 17 Chart 2.4 The workingage population is composed of those in the labor force— the employed and the unemployed— and those not in the labor force. Working-age population by labor force status, selected countries, in percent, 2009 Employed Unemployed Not in the labor force China Brazil New Zealand Canada Norway Switzerland Australia Denmark United States Netherlands Argentina Sweden Singapore Philippines Ireland United Kingdom Portugal Mexico Italy was the only country with less than half of its working-age population engaged in the labor force. Although Spain had average labor force participation, this masks its relatively low employment rate and high unemployment. Estonia, Ireland, and Slovakia also had relatively low employment but high unemployment. Estonia Korea, Republic of Finland Austria Slovakia Japan Spain Germany Czech Republic India Israel France Poland Greece Belgium Hungary Italy 0 20 40 60 80 100 Percent SOURCES: Bureau of Labor Statistics and International Labour Office 18 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Employment-population ratios, selected countries, 2007 and 2009 China Brazil Norway New Zealand 2.5 Employmentpopulation ratios decreased between 2007 and 2009 in 31 of the 36 countries, with the steepest declines in Estonia, Spain, Ireland, and the United States. Switzerland Australia Netherlands Canada Denmark Singapore Sweden Argentina United States Philippines Korea, Republic of United Kingdom Mexico Austria Portugal Japan Ireland Finland India In 2009, China and Brazil had the highest proportions of employed persons, while Hungary and Italy had the lowest. Czech Republic Germany Taiwan Israel Estonia Slovakia France 2007 2009 Poland Belgium Greece Spain Hungary Italy 0 20 40 60 80 Percent SOURCES: Bureau of Labor Statistics and International Labour Office u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 19 Chart 2.6 Employment grew from 2000 to 2007 in all countries except for Japan but decreased in almost half of the countries from 2007 to 2009. Employment growth, selected countries, average annual rates, 2000–2007 and 2007–2009 Estonia Spain Ireland United States Hungary Denmark 2000–2007 2007–2009 Japan Czech Republic Finland Greece Portugal Sweden United Kingdom Italy Taiwan, China Switzerland Canada New Zealand Belgium Between 2007 and 2009, the sharpest declines in employment were in Estonia and Spain, followed by Ireland and the United States. The largest gains in employment between 2007 and 2009 were in three Asian countries: Singapore, the Philippines, and India. Singapore and India were 2 of 3 countries (Germany was the third) that had more employment growth during 2007–2009 than during 2000–2007. 20 France Austria Slovakia China Korea, Republic of Norway Netherlands Mexico Germany Poland Israel Brazil Australia Argentina India Philippines Singapore –5 –3 –1 0 1 3 5 Percent SOURCES: Bureau of Labor Statistics and International Labour Office Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Part-time employment rates by sex, selected countries, 2009 Netherlands Switzerland United Kingdom 2.7 The part-time employment rate for women was roughly 2 to 5 times higher than the men’s rate in most countries. Australia Germany Ireland New Zealand Japan Austria Belgium Italy The largest difference between men and women’s part-time employment rates was in the Netherlands, although it had the highest rate for both men (17.0 percent) and women (59.9 percent). Norway Canada Denmark France Spain Sweden United States Finland Part-time employment was least common for both men and women in three Eastern European countries: Slovakia, Hungary, and the Czech Republic. Korea, Republic of Men Women Greece Poland Estonia Czech Republic Hungary Slovakia 0 10 20 30 40 Percent 50 60 70 SOURCE: Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 21 Chart 2.8 More than half of employment was in the service sector in all countries. The Netherlands, the United States, and the United Kingdom had the largest shares of service employment (above 80 percent). Share of employment by sector, selected countries, 2009 Industry Services Agriculture Netherlands United States United Kingdom Denmark Canada Sweden Australia Norway Israel New Zealand Greece France Ireland Switzerland Belgium Finland The largest shares of industry employment (above 30 percent) were in five Eastern European countries. Poland, Mexico, Greece, and Portugal had the largest agricultural sectors. Korea, Republic of Austria Spain Japan Mexico Italy Germany Portugal Poland Estonia Hungary Slovakia Czech Republic 0 20 40 60 80 100 Percent NOTE: Agriculture includes hunting, forestry, and fishing. Industry is composed of mining and quarrying, manufacturing, construction, and for some countries, public utilities (electricity, gas, and water). Public utilities represent less than 3 percent of industry in all countries. SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development 22 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Percent 20 15 15 10 10 New Zealand Australia 5 Korea, Republic of Japan 0 01 02 03 04 05 06 07 08 09 Western Europe Percent 20 Mexico 0 00 01 02 03 04 05 06 07 08 09 15 Ireland Germany 10 10 France United Kingdom 5 5 Austria Switzerland 00 01 0 02 03 04 05 06 07 08 09 Southern Europe Percent 20 00 Finland Denmark Sweden Netherlands 01 02 03 04 05 06 07 08 09 Eastern Europe Poland Spain Slovakia Estonia 10 10 Italy 5 5 Portugal 0 Czech Republic Hungary 0 01 02 03 04 05 06 07 08 09 00 In 2009, Spain had, by far, the highest unemployment rate, and Norway had the lowest. 01 02 03 Unemployment rates were higher in 2009 than 2000 in a majority of countries, due in part to the effects of the global recession at the end of the decade. Unemployment rates increased in 11 countries between 2007 and 2008, and in all countries between 2008 and 2009. Poland recorded the highest unemployment rate of the period (20.0 percent in 2002), and Switzerland had the lowest (2.2 percent in 2001). 15 Greece 00 Norway Percent 20 15 2.9 Northern Europe Percent 20 15 0 United States Canada 5 00 North America Percent 20 Asia and Oceania Chart Unemployment rates, selected countries, 2000–2009 04 05 06 07 08 09 SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 23 Chart 2.10 Unemployment rates for teenagers and young adults are generally higher than those for adults, partly due to young people’s greater vulnerability to economic downturns and lack of experience. Slovakia had the largest difference between rates for teenagers and adults, and Germany had the smallest. Only Switzerland had a higher unemployment rate for young adults than for teenagers. Unemployment rates by age, selected countries, 2009 Switzerland Teenagers (15-19) Japan Young adults (20-24) Adults (25 and older) Netherlands Germany Norway Austria Korea, Republic of Denmark Israel Australia Canada New Zealand United States United Kingdom Portugal Poland Belgium Finland France Greece Czech Republic Sweden Ireland Italy Hungary Estonia Slovakia Spain 0 10 20 30 40 50 60 Percent NOTE: 2008 for Israel. Ages 16 to 19 instead of 15 to 19 for Canada, France, Norway, Spain, Sweden, the United Kingdom, and the United States. SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development 24 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov 2.11 Norway Chart Unemployment rates by education, selected countries, 2008 Less than high school Netherlands High school or trade school Denmark College or university In 23 out of 30 countries, college graduates had the lowest unemployment rates, followed by high school graduates; high school dropouts had the highest rates. New Zealand Australia Mexico Switzerland Austria Korea, Republic of Czech Republic United Kingdom Sweden Japan Italy Ireland Estonia United States Finland College graduates had the highest unemployment rate only in Mexico. Canada France Belgium Israel Brazil Poland Hungary Portugal Greece Germany Slovakia Spain 0 5 10 15 20 25 30 Percent NOTE: Data refer to persons ages 25 to 64. Data for less than high school are not available for Japan. 35 40 The unemployment rate gap between high school dropouts and high school graduates was generally larger than the gap between college graduates and high school graduates, reflecting the value of a high school education in seeking employment. SOURCE: Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 25 Chart 2.12 Long-term unemployment (UR1) was most prevalent in Slovakia and Spain. Various measures of labor underutilization, selected countries, 2009 Norway UR1 (long-term unemployment rate) Netherlands UR3 (unemployment rate) UR6 (broad rate of labor underutilization) Austria Japan Australia Denmark New Zealand Czech Republic Canada UR1 is the most restrictive rate of labor underutilization and consists only of the subset of the unemployed who were unemployed for at least 1 year. UR3 is the official unemployment rate and the most widely recognized. The broadest rate, UR6, includes the unemployed, the marginally attached, and persons who are employed but who worked fewer hours than they would like (i.e., the time-related underemployed). Spain had the highest UR3 and UR6. Although Australia had the second highest UR6, its UR3 was relatively low. United Kingdom Germany Belgium Italy Poland Finland Sweden France United States Greece Portugal Hungary Ireland Slovakia Spain 0 5 10 15 20 25 30 Percent NOTE: Long term is defined as 1 year or longer. UR6 includes the unemployed, the marginally attached, and the timerelated underemployed. See section notes. SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development 26 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov 2.13 Chart UR6: A broad rate of labor underutilization, selected countries, 2007 and 2009 Netherlands Norway 2007 2009 Czech Republic During the global recession, UR6 increased between 2007 and 2009 in all countries, except for Poland. The largest increases were in Spain, the United States, and Ireland. Austria Denmark Japan Belgium United Kingdom Poland Ireland New Zealand Greece Portugal Germany Canada Slovakia Hungary Finland France United States Sweden Italy Australia Spain 0 5 10 15 20 25 30 Percent NOTE: UR6 includes the unemployed, the marginally attached, and the time-related underemployed. See section notes. SOURCE: Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov UR6 is a broader measure of labor underutilization than the unemployment rate because it includes the marginally attached and those who are employed but who worked fewer hours than they would like (i.e., timerelated underemployed). This broader measure is popular during times of recession, when unemployment and other types of labor market difficulty are on the rise. august 2011 | Charting International Labor Comparisons 27 Section 21 Notes Section Sources Data for 10 countries for most indicators are based on the BLS report International Comparisons of Annual Labor Force Statistics, Adjusted to U.S. Concepts, 10 Countries, 1970-2010. To facilitate international comparisons, foreign-country data are adjusted to U.S. concepts. Data for the remaining countries and some indicators in their entirety— labor force participation rates by age, part-time employment rates, unemployment rates by education and measures of underutilization—are Labor Market data for differences that remain across countries in coverage and definitions that can affect international comparisons. See Labor Force Statistics in OECD Countries: Sources, Coverage and Definitions. For total unemployment rates, the OECD series used is the “harmonized unemployment rates” (HURs), which are adjusted to conform to the ILO guidelines in countries where deviations occur. For a full discussion of comparability issues, see the BLS article, “International unemployment rates: how comparable are they?” based on data from the International Labour Office Using multiple sources for an indicator to extend (ILO) or the Organisation for Economic Co-operation country coverage can introduce additional and Development (OECD). comparability issues, since each organization Labor force participation rates, employmentpopulation ratios, and employment growth are supplemented with data from the ILO database Key Indicators of the Labour Market (KILM). The KILM harmonizes data using econometric models to account for differences in national data and scope of coverage, collection and tabulation methodologies, and other country-specific factors, such as military service requirements. Although some differences remain between the KILM and ILC series, they do not materially affect comparisons across countries. Part-time employment rates, employment by employs different methods for harmonizing data, if adjustments are made at all. Users should use caution when making international comparisons using the actual values underlying these charts and are encouraged to review the methodological documents associated with each source. In this section, Europe includes 21 countries: Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland, and the United Kingdom. sector, unemployment rates, and measures of Definitions underutilization are supplemented with data Labor Labor market data are on a civilian basis (i.e., from the OECD database OECD.Stat. The OECD members of the Armed Forces are not included). generally uses labor force surveys and captures The labor force participation rate is the labor force as labor force statistics according to ILO guidelines, a percent of the working-age population; it is an which facilitate cross-country comparisons, because overall indicator of the level of labor market activity. these guidelines create a common conceptual The labor force is the sum of the employed plus the framework for countries. However, except for total unemployed; it provides an indication of the size unemployment rates, the OECD does not adjust of the labor supply. The working-age population is 28 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov the population ages 15 or 16 and older. (Lower age 35 hours in the United States) during the survey limits vary by country. See source documents.) reference week for economic reasons or (2) part-time The employed are persons who, during the reference week, did work for at least 1 hour as paid employees, worked in their own business, profession, or on their own farm, or as unpaid workers in an enterprise operated by a family member (at least 1 hour according to the ILO guidelines but at least 15 hours according to U.S. concepts). Definitions of the employed vary by country. See source documents. The employmentpopulation ratio is employment as a percent of the working-age population. Part-time employment refers to employed persons who usually work less than 30 workers who want but cannot find full-time work. For unemployment rates by education, the levels of educational attainment accord with the International Standard Classification for Education (ISCED) in its current version, known as ISCED 1997. Less than high school corresponds to “less than upper secondary education” and includes ISCED levels 0-3C. High school or trade school corresponds to “upper secondary and post-secondary education” and includes levels 3-4. College or university corresponds to “tertiary non-university and university” and includes levels 5-6. hours per week in their main job; in some countries, “actual” rather than “usual” hours are used. The parttime employment rate is the share of employment that is part time and is also referred to as the incidence of part-time employment. The unemployed are persons without work, actively seeking employment and currently available to start work. Definitions of the unemployed vary by country; see source documents. The unemployment rate is unemployment as a percent of the labor force; it is the most widely used measure of an economy’s unused labor supply. Persons marginally attached to the labor force are those who did not look for work in the past 4 weeks, but who wish to work, are available to work and, in some countries, have looked for work sometime in the past 12 months. Discouraged workers are the subset of the marginally attached who are not currently searching for a job because they believe none are available. The time-related underemployed are either: (1) full-time workers working less than a full week (less than u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 29 3 Section Competitiveness in Manufacturing T hree indicators of international competitiveness in the manufactured goods sector are: hourly compensation costs, labor productivity, and unit labor costs. Hourly compensation measures employers’ average hourly labor costs in the manufacturing sector. Labor productivity (output per hour worked) measures how effectively hours worked are converted into output. Unit labor costs measure the cost of labor compensation expended to produce one unit of output. Increases in labor productivity indicate that a country’s workers are becoming more efficient, while declines in unit labor cost indicate that an economy is becoming more cost competitive. 30 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov China India Philippines Chart Hourly compensation costs in manufacturing, selected countries, in U.S. dollars, 2009 Mexico 3.1 The 12 countries with the highest manufacturing hourly compensation costs were all in Europe, followed by Australia and the United States. Poland Taiwan Brazil Hungary Estonia Argentina Czech Republic Slovakia Portugal Korea, Republic of New Zealand Singapore Israel Greece Spain Canada Japan Costs in Norway were 1.6 times the U.S. level and roughly 50 times costs in China. United Kingdom United States Australia Italy Ireland Sweden Labor costs in China and India have been growing faster than those in the United States in recent years, but were still less than 4 percent of the U.S. level. France Netherlands Finland Switzerland Germany Austria Belgium Denmark Norway 0 10 20 30 40 50 60 U.S. dollars NOTE: Data for China and India refer to 2007 and are not directly comparable with each other or with data for other countries. See section notes. SOURCE: Bureau of Labor Statistics u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 31 Chart 3.2 Costs in Northern Europe were, on average, $12 higher than those in the United States, while costs in Latin America were $28 lower than the U.S. level. Eastern European countries, on average, had the lowest hourly compensation costs within Europe, at $36 below the Northern European level. Costs in China were only 5 percent of costs in other Asian countries. Hourly compensation costs in manufacturing, selected countries and regions, in U.S. dollars, 2009 China India Latin America (3) Eastern Europe (5) Asia (5) Southern Europe (4) United States Western Europe (8) Northern Europe (4) 0 10 20 30 40 50 U.S. dollars NOTE: Number in parenthesis refers to the number of countries in the regional grouping. Data for China and India refer to 2007 and are not directly comparable with each other or with data for other countries. See section notes. SOURCE: Bureau of Labor Statistics 32 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Hourly compensation costs in manufacturing and exchange rates, selected countries, annual percent change, 2008–2009 Poland United Kingdom Korea, Republic of From 2008 to 2009, currencies in all countries except Japan lost value against the U.S. dollar, causing widespread declines in dollardenominated compensation costs. Mexico Hungary Taiwan Sweden Canada New Zealand Czech Republic Norway Singapore Australia Israel France Estonia Germany Philippines Belgium Netherlands Portugal Italy Finland Percent change in hourly compensation costs in U.S. dollars Canada, Singapore, and Taiwan experienced currency depreciation along with declining compensation costs in national currency, leading to even larger drops in U.S.-dollar costs. Brazil Greece Denmark Ireland Spain Percent change in national currency Austria Switzerland Argentina Percent change in exchange rate 3.3 Slovakia United States Japan –25 –15 –5 0 5 15 25 Percent –25 –15 –5 0 5 15 25 NOTE: Changes in compensation costs in U.S. dollars roughly equal the change in compensation costs in national currency plus the change in the value of the currency relative to the U.S. dollar. SOURCE: Bureau of Labor Statistics u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 33 Chart 3.4 Most countries experienced higher growth in compensation costs, on average, over the first 7 years of the last decade than they did over the last 2 years. The Republic of Korea, Argentina, Estonia, Hungary, and Taiwan had the largest differences in compensation cost growth across the two periods. In Canada and Taiwan, compensation costs declined in the latter period, a trend that is rarely seen. Growth in manufacturing hourly compensation costs, selected countries, average annual rates, 2000–2007 and 2007–2009 Taiwan Canada Korea, Republic of Japan 2000–2007 2007–2009 France Switzerland Germany United Kingdom United States Greece Italy Denmark Sweden New Zealand Belgium Portugal Australia Singapore Netherlands Norway Finland Czech Republic Hungary Ireland Israel Spain Austria Philippines Mexico Poland Estonia Slovakia Brazil Argentina –5 0 5 10 15 20 25 Percent NOTE: Growth rates are based on national currency-denominated compensation costs. SOURCE: Bureau of Labor Statistics 34 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Asia (5) 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 Western Europe (8) 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 United States 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 Northern Europe (4) 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 Southern Europe (4) 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 Latin America (3) 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 Eastern Europe (5) 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 Eastern Europe and Latin America also saw rapid increases in compensation, although cost growth in Eastern Europe slowed substantially from 2008 to 2009. 2004–2005 2005–2006 2006–2007 2007–2008 China –10 3.5 Manufacturing compensation costs in China grew the fastest, while costs in the rest of Asia and Western Europe grew at the slowest pace. 2004–2005 2005–2006 2006–2007 India Chart Hourly compensation costs in manufacturing, selected countries and regions, annual percent changes, 2004–2009 0 10 Percent 20 30 Asia experienced a slight decline in compensation costs between 2008 and 2009, a trend not shared with other regions of the world. NOTE: Percent changes are based on national currency-denominated compensation costs. Number in parenthesis refers to the number of countries in the regional grouping. See section notes. The latest available data for China and India refer to 2007–2008 and 2006–2007, respectively. SOURCE: Bureau of Labor Statistics u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 35 Chart 3.6 Total benefits (social insurance and directly paid benefits) surpassed 40 percent of compensation costs in 15 of 34 countries. Total benefits as a percentage of total costs were highest in Belgium, at 49 percent of costs, and lowest in New Zealand, at 17 percent. The ratio of benefits to total costs in the United States was 31 percent. For manufacturers in Brazil, Sweden, and France, social insurance costs made up approximately 33 percent of total compensation costs in 2009. Insurance in New Zealand, however, accounted for only 3 percent of total costs. 36 Components of hourly compensation costs in manufacturing, selected countries, in percent, 2009 Social insurance Directly paid benefits Pay for time worked (wages and salaries) Total direct pay New Zealand Philippines Denmark Singapore Taiwan Switzerland Ireland Poland Israel Argentina Korea, Republic of Japan Norway Portugal Canada Australia United Kingdom Finland Germany Netherlands United States Austria Hungary Spain Estonia Mexico Czech Republic Greece Slovakia Belgium Italy France Sweden Brazil 0 20 40 60 80 100 Percent NOTE: For Mexico, Norway, the Republic of Korea and Taiwan, pay for time worked and directly paid benefits are combined into total direct pay. See section notes. SOURCE: Bureau of Labor Statistics Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Manufacturing productivity growth, selected countries, average annual rates, 2000–2007 and 2007–2009 Japan Sweden Although manufacturing productivity (output per hour) grew for all countries from 2000 to 2007, productivity fell sharply in many countries from 2007 to 2009. Germany 2000–2007 2007–2009 Singapore Italy 3.7 France Finland Estonia Netherlands Hungary Austria United Kingdom Spain Slovakia Japan, Sweden, Germany, and Singapore experienced the largest productivity declines between 2007 and 2009. Canada Denmark Australia Norway Israel was the only country that had faster productivity growth during 2007 to 2009 than during 2000 to 2007. Belgium Korea, Republic of Czech Republic Taiwan United States Israel –10 –5 0 5 10 15 Percent SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 37 Chart 3.8 When output is growing faster than hours worked, productivity (output per hour) rises. Output declined between 2007 and 2009 in all countries except the Republic of Korea and Israel, driving declines in manufacturing labor productivity for most countries during the period. In contrast to the 2007 to 2009 period, output increased in most countries from 2000 to 2007. Manufacturing output growth, selected countries, average annual rates, 2000–2007 and 2007–2009 Estonia Japan Sweden Finland Italy 2000–2007 2007–2009 Germany Canada Spain Hungary Slovakia United Kingdom France Austria Netherlands United States Belgium Denmark Singapore Czech Republic Taiwan Norway Australia Israel Korea, Republic of –20 –10 0 10 20 Percent SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development 38 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Estonia United States Chart Growth in manufacturing hours worked, selected countries, average annual rates, 2000–2007 and 2007–2009 3.9 Hours worked in manufacturing declined between 2007 and 2009 in all countries except Singapore. In many countries, hours fell by more than 5 percent. Canada Japan Spain Finland Slovakia Italy Sweden Belgium United Kingdom Denmark Hungary Taiwan Germany Hours worked also decreased in almost all countries from 2000 to 2007, but not to the extent seen during 2007 to 2009. Israel Czech Republic Austria France 2000–2007 2007–2009 Norway Australia Netherlands Korea, Republic of Singapore –15 –10 –5 0 5 Percent SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 39 Chart 3.10 Manufacturing unit labor costs (compensation per unit of output) in national currency grew between 2007 and 2009 in all countries except Taiwan and Slovakia. Italy, Estonia, and Sweden experienced the largest growth. Only Canada and Israel had faster unit labor cost growth during 2000 to 2007 than during 2007 to 2009. Growth in manufacturing unit labor costs in national currency, selected countries, average annual rates, 2000–2007 and 2007–2009 Taiwan 2000–2007 2007–2009 Slovakia Israel Czech Republic United States Canada Denmark Korea, Republic of Singapore Belgium United Kingdom Australia Norway Spain Hungary Japan France Netherlands Austria Finland Germany Sweden Estonia Italy –5 0 5 10 Percent SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development 40 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov 3.11 Chart Growth in manufacturing unit labor costs in U.S. dollars, selected countries, average annual rates, 2000–2007 and 2007–2009 Korea, Republic of 2000–2007 2007–2009 United Kingdom To gauge international competitiveness, unit labor costs (compensation per unit of output) can be converted to U.S. dollars. Competitiveness increases as unit labor costs decrease. Taiwan Canada Hungary United States Norway Australia Sweden Israel Denmark Czech Republic Belgium Singapore Growth in manufacturing unit labor costs converted to U.S. dollars was faster from 2007 to 2009 than the growth between 2000 and 2007 in most countries. Japan and Slovakia had the sharpest increases in unit labor costs. Spain France Austria Netherlands Finland Germany Estonia Italy Slovakia Japan –15 –5 5 15 25 Percent SOURCES: Bureau of Labor Statistics and Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 41 Chart 3.12 In most countries, the growth of productivity outpaced the growth of real hourly compensation in manufacturing throughout much of the period from 1970 to 2009, creating a compensationproductivity gap. By 2009, the gap was largest in the United States, Finland, and Sweden. The gap was smallest in Germany, Denmark, and Italy. Gap between productivity and real hourly compensation in manufacturing, selected countries, 1970–2009 — Productivity — Real hourly compensation Natural logarithm of indexes 7.0 United States 6.5 Natural logarithm of indexes 7.0 Sweden 6.5 Finland 6.0 6.0 5.5 5.5 5.0 5.0 4.5 70 80 7.0 90 00 09 70 Belgium 6.5 80 90 00 0970 80 Netherlands 90 00 09 4.5 7.0 Japan 6.5 6.0 6.0 5.5 5.5 5.0 5.0 4.5 70 80 7.0 90 00 09 70 80 France 6.5 90 00 0970 Canada 80 90 00 09 4.5 7.0 United Kingdom 6.5 6.0 6.0 5.5 5.5 5.0 5.0 4.5 70 80 7.0 90 00 09 70 80 Italy 90 00 0970 80 Denmark 90 00 09 4.5 7.0 Germany 6.5 6.5 6.0 6.0 5.5 5.5 5.0 5.0 4.5 70 80 90 00 09 70 80 90 00 0970 80 90 00 09 4.5 Year SOURCE: Bureau of Labor Statistics 42 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Section 31 Notes Section Sources Hourly compensation costs measure employers’ average hourly labor costs in the manufacturing sector. Average costs refer to all employees, are based on national establishment surveys, and are prepared for level comparisons. To permit meaningful Competitiveness in Manufacturing and are prepared for trend (rather than level) comparisons. Data for most countries are based on the BLS news release International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends and the related time series tables. Also, see the technical notes associated with the news release. level comparisons of employer labor costs across Data for the remaining countries are based on data countries, earnings data from national surveys are from the Organisation for Economic Co-operation adjusted to the BLS concept of hourly compensation. and Development (OECD) database OECD.Stat. Data for all countries are based on the BLS news Definitions release International Comparisons of Hourly Compensation Costs in Manufacturing, 2009 and the related time series tables. Also, see the technical notes and country notes associated with this release. Due to various data gaps and methodological issues, compensation costs for China and India are not directly comparable with each other or with data for other countries. Hourly compensation (labor cost) is the average cost to employers of using one hour of labor in the manufacturing sector. Compensation includes (1) pay for time worked, (2) directly paid benefits, and (3) employer social insurance expenditures and laborrelated taxes. Pay for time worked refers to wages and salaries for time actually worked, including basic wages, overtime pay, shift and holiday premiums, Average compensation costs for selected regions are and regular bonuses. Directly paid benefits primarily calculated by weighting each country’s compensation include pay for vacations and other leave, irregular cost value by its relative importance to U.S. trade. bonuses, and pay in kind. Social insurance expenditures The weights are calculated using the dollar value of are employer contributions to social benefit funds U.S. trade (exports plus imports) in manufactured on behalf of workers, such as for unemployment commodities with each country in 2007. Latin America insurance, workers’ compensation, health insurance, refers to Argentina, Brazil, and Mexico; Western and pension funds. Labor-related taxes are taxes on Europe to Austria, Belgium, France, Germany, payrolls or employment, net of subsidies. Total hourly Ireland, the Netherlands, Switzerland, and the United direct pay includes all payments made directly to the Kingdom; Northern Europe to Denmark, Finland, worker consisting of pay for time worked and directly Norway, and Sweden; Southern Europe to Greece, paid benefits. Italy, Portugal, and Spain; Eastern Europe to the Czech Productivity is real output per hour worked. Output is Republic, Estonia, Hungary, Poland, and Slovakia; and Asia to Japan, the Republic of Korea, the Philippines, Singapore, and Taiwan. defined as real value added. Hours refer to the hours worked by all persons engaged in the manufacturing process. Unit labor costs are nominal compensation Data on productivity, output, hours, and unit costs divided by real value-added output. Unit labor labor costs refer to all employed persons in the cost can be expressed in national currency and in manufacturing sector, are based on national accounts, U.S. dollars. u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 43 4 Section Consumer Prices C onsumer price indexes (CPI) and harmonized indexes of consumer prices (HICP) measure the change over time in the prices paid by consumers for a fixed selection, or market basket, of goods and services. Price indexes are used primarily to adjust income payments for changes in the cost of living and to compute inflation-adjusted measures of other economic series. 44 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Chart Measures of consumer price inflation, selected countries, average annual percent changes, 2007–2009 Japan Ireland Consumer price index (CPI) Harmonized index of consumer prices (HICP) Switzerland 4.1 The two inflation rates were identical in 8 countries, and the difference between the two rates was greater than half a percentage point in just 5 of the 23 countries. Portugal Germany France Netherlands United States Austria Spain Italy Belgium Denmark Slovakia Sweden Finland Greece United Kingdom Norway Czech Republic Poland Hungary Estonia –1 0 1 2 3 4 5 6 Percent Ireland was the only country showing opposite trends between the two inflation rates, and the largest difference between the two rates was in the United Kingdom. The differing trends reflect differences in the market basket that is covered by the HICP and CPI for these countries. NOTE: HICP and CPI are two measures of consumer price changes. HICP are adjusted for comparability across countries, whereas CPI are not adjusted. Values for Japan are zero, indicating no change. SOURCES: Bureau of Labor Statistics, Eurostat, and Organisation for Economic Co-operation and Development u.s. Bureau of Labor Statistics | www.bls.gov august 2011 | Charting International Labor Comparisons 45 Chart 4.2 Harmonized indexes of consumer prices (HICP) are an internationally comparable measure of consumer price inflation. For a majority of countries—particularly Slovakia, Ireland, and Portugal—inflation was slower during the 2007 to 2009 period, when economies worldwide experienced recessionary pressures. Eastern European countries generally had the highest rates of inflation during both periods, while prices changed the least in Japan. Harmonized indexes of consumer prices, selected countries, average annual percent changes, 2000–2007 and 2007–2009 Japan 2000–2007 2007–2009 Ireland Portugal Germany France Netherlands Austria United States Spain Italy Belgium Denmark Slovakia Sweden Finland Greece Norway United Kingdom Czech Republic Poland Hungary Estonia –1 0 1 2 3 4 5 6 7 Percent NOTE: 2007–2009 value for Japan is zero, indicating no change. SOURCES: Bureau of Labor Statistics and Eurostat 46 Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Brazil Slovakia Estonia Chart Manufacturing compensation and consumer price indexes, selected countries, average annual growth rates, 2007–2009 4.3 The gap between the growth rates for hourly compensation costs and the consumer price indexes (CPI) indicates the degree to which manufacturing worker compensation has kept up with inflation. Poland Mexico Philippines Austria Spain Israel Ireland Hungary Czech Republic Norway Finland Netherlands Singapore Australia Portugal Belgium New Zealand Denmark Sweden Italy Greece United States United Kingdom Germany Hourly compensation costs Consumer price indexes Switzerland — Compensation-inflation gap France Japan Korea, Republic of Canada Taiwan –4 –2 0 2 4 6 8 10 Percent NOTE: Hourly compensation growth rates are based on national currency-denominated costs. SOURCES: Bureau of Labor Statistics, Organisation for Economic Co-operation and Development, and the national statistical offices of the Philippines, Singapore, and Taiwan u.s. Bureau of Labor Statistics | www.bls.gov Compensation growth outpaced inflation in most countries between 2007 and 2009. The compensation-inflation gap was largest in Ireland, Slovakia, and Brazil. Compensation growth rates lagged inflation in Taiwan, the Republic of Korea, Canada, the Philippines, and Hungary. august 2011 | Charting International Labor Comparisons 47 Chart 4.4 Low prices relative to the United States were found in Southern and Eastern Europe, Latin America, and East Asia. The cheapest basket of goods was in China. The price of foreign goods and services compared with their price in the United States is known as the relative price. A value higher (lower) than 1 indicates that prices in a particular country are higher (lower) than prices in the United States. Countries with high relative prices included countries in Northern and Western Europe, as well as Japan, Canada, and Australia. 48 Price of a basket of goods that costs one dollar in the United States, selected countries, 2009 Denmark Norway Finland Ireland France Japan Belgium Austria Netherlands Australia Sweden Germany Italy Canada United States Greece Spain United Kingdom Portugal Singapore Estonia Czech Republic Slovakia Hungary Korea, Republic of Poland Mexico Brazil China 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 U.S. dollars SOURCES: Bureau of Labor Statistics, International Monetary Fund, U.S. Federal Reserve, Organisation for Economic Co-operation and Development, and The World Bank Charting International Labor Comparisons | august 2011 u.s. Bureau of Labor Statistics | www.bls.gov Section 41 Notes Section Consumer Prices Sources The relationship between purchasing power parities Consumer price indexes (CPI) and harmonized (PPP) and market exchange rates can be used to indexes of consumer prices (HICP) for most estimate comparative, or relative, prices of goods countries are from the BLS report International and services in different countries. Relative prices Indexes of Consumer Prices 18 countries and areas, 1996-2009. Data for the remaining countries are based on data from the Organisation for Economic Co-operation and Development (OECD) database OECD.Stat, the European Commission database Eurostat, and national statistical offices (for the Philippines, Singapore, and Taiwan). are calculated by dividing PPP by market exchange Each country produces its own consumer price index using unique methods and concepts. For this reason, CPI data are not fully comparable across countries. Differences exist mainly in population coverage, frequency of market basket weight changes, and treatment of homeowner costs. The HICP is an internationally comparable measure of consumer price inflation. The HICP is the standard price index that European Union member states must produce for comparisons across countries. HICP data for the United States are an experimental BLS series. Although the HICP series for the United States broadly follows the European Union definitions, some differences remain in the frequency of market basket weight changes, aggregation methods, and quality adjustments. rates. The resulting values indicate the domestic price, expressed in U.S. dollars, of a basket of goods that would cost exactly one dollar in the United States. Consequently, values less than 1 indicate that prices in that country are relatively low, compared with the United States. Values greater than 1 indicate that prices in a particular country are relatively high, compared with the United States. Definitions Compensation costs refer to average hourly compensation costs for all employees in manufacturing. (See section 3 Notes.) Consumer price indexes (CPI) are a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services. CPI and annual percent changes are based on national CPI as published by each country. They have not been adjusted for comparability. Harmonized indexes of consumer prices (HICP) are an internationally comparable measure of consumer price inflation based on European Union definitions. The index represents urban and rural households in each Relative prices for most countries are from the BLS country and excludes the component for owner- report International Comparisons of GDP per Capita occupied housing costs. Purchasing power parities and per Hour, 1960–2009. Data for the remaining countries are based on PPP from OECD.Stat and the World Bank database World Development Indicators, and on market exchange rates from the U.S. Federal Reserve, the International Monetary Fund’s International Financial Statistics publication, and OECD.Stat. (PPP) are currency conversion rates that allow output u.s. Bureau of Labor Statistics | www.bls.gov in different currency units to be expressed in a common unit of value. A PPP is the ratio between the number of units of a country’s currency and the number of U.S. dollars required to purchase an equivalent market basket of goods and services within each respective country. august 2011 | Charting International Labor Comparisons 49 U.S. BUREAU OF LABOR STATISTICS Postal Square Building, Room 2850 2 Massachusetts Avenue, NE. Washington, DC 20212-0001
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