Monday, January 21, 2013

U.S. Manufacturing Wages Are Stuck In Neutral

 And Are Not Nearly As Generous As Those In Other Industrialized Countries

By Richard A. McCormack

Manufacturing workers in the United States are not close to being the highest paid in the world. The average hourly compensation for a manufacturing worker in the United States in 2011 was $35.53, below what workers make in 17 other developed countries.
Compared to foreign rivals, American manufacturing workers are also not experiencing much by way of wage increases. Of the 34 countries that the Bureau of Labor Statistics' International Labor Comparisons (ILC) program follows, U.S. manufacturing employees ranked in 33rd place for the annual percent change in hourly compensation costs in 2011. The only country whose manufacturing workers received less of an increase in pay and benefits was Greece.
Moreover, over the course of the past 16 years, manufacturing workers in every country save for one (Taiwan) experienced large gains in compensation compared to American workers, "improving U.S. cost competitiveness," says the ILC program.
Manufacturing employers in Norway had the world's highest compensation rates for their workers: $64.15 per hour, far above the burden for U.S. manufacturing employers. Switzerland ($60.40), Belgium ($54.77), Denmark ($51.67) Sweden ($49.12) and Germany ($47.38) had workers earning far more than those in the United States. Even workers in Ireland, Canada, Italy and Japan receive greater compensation than Americans.
Compensation costs include direct pay, overtime premiums, cost of living adjustments, bonuses, payments in kind, allowances for commuting, payments to employee savings funds, retirement and disability pensions, health insurance, pay for sick leave, life and accident insurance, unemployment insurance, severance pay, all social insurance expenditures and taxes on payrolls.
Compared to other countries, U.S. employers are not very generous with hourly pay, which averaged $23.70 in 2011, compared to Switzerland at $39.92, Denmark at $39.15, and Australia at $32.63.
Compared to many countries, U.S. employers are also not overly generous with directly paid benefits for leave time, bonuses and payments in kind, averaging $3.17 per hour compared to places like Belgium ($11.05 per hour), New Zealand ($9.01), Austria ($9.26) and Ireland ($6.00).
In the area of social insurance, pensions, disability, pay for sick leave, life and accident insurance, occupational injury, all other social insurance and taxes on payrolls the United States (at $8.65 per hour) is not that expensive compared to other industrial economies such as Belgium ($17.64 pre hour), Sweden ($16.18) France (at $12.61) and New Zealand ($10.98).
The annual compilation of manufacturing wages and benefits also describes those of China and India. China's average hourly compensation costs for a manufacturing worker were $1.36 in 2008, the last year they have been reviewed. India's were $1.17 in 2007.

The study is here.

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