January 8, 2013

Manufacturing Compensation in USA versus Other Nations

The United States has a very large manufacturing industry which has been on the rebound in recent years.   While manufacturing has grown in China and other lower cost nations in many ways in recent decades, the manufacturing base in the US is still large.   Our wages and benefit costs for manufacturing are relatively high compared to many countries but still significantly cheaper than some nations.  In fact the compensation costs in the US are cheaper than 15 other nations.  

The data is from the BLS report INTERNATIONAL COMPARISONS OF HOURLY COMPENSATION COSTS IN MANUFACTURING, 2011   (PDF version)    Note that the numbers are more than just hourly wages.   The report covers compensation costs which include wages, benefits and some tax related costs too.   You can dive into the full BLS report for more details and a break down of benefit costs too.

Here are the hourly compensation figures per nation :

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You'll note that China and India are not on that chart.   The BLS report explains this is due to inconsistent or poor data from those nations but it does cover the compensation for them in 2007 or 2008 and its around $1-2 range.   Its likely grown since then as well, but they are both still quite low.

It may be more interesting to see how much each nation has changed from 1997 to 2011.  
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There we see the U.S. has increased less than everyone but Taiwan.   Costs in the U.S. are still high relative to most of the world but many nations are catching up while our costs grow slower.


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