PPP WAGE RATE GAPS FOR SELECTED DEVELOPED AND "EMERGING" ECONOMIES FOR ALL EMPLOYED IN MANUFACTURING WORKERS (1996 UP TO 2011).

Overall, seven out of the twelve countries in this assessment are better off in 2011 than in 1996, the first year available with hourly compensation cost data. Overall East Asian economies recorded the greatest gains in their wage-rate position. In contrast, Canada and Brazil have lost much ground whilst Australia, France and the UK have the same gap as in 1996. Most countries recorded their best position between '02 and '08. Canada, Brazil and France had their best equalisation index (Eq-Idx) in '96 or '98. Mexico, as in the case of production-line wage rates, had negligible change in 15 years and continues to have the worst position of all countries.

Since 2010 the international comparison of hourly compensation costs (hourly wage rates) between the U.S. and selected developed and "emerging" markets refers to all employed in the manufacturing sector and no longer will be available for production workers only. Production-line wage rates are on average 20% below wage rates for all employed in manufacturing, including production workers, for the 1996-2009 period, for all countries included in the assessment.

In 2011, Germany shows a competitive advantage of its wage rates over the rates of equivalent workers in the U.S. Germany's hourly wage rates have a purchasing power 20% stronger than the rates of their U.S. counterparts and is the only country in this assessment to have an advantage over the U.S. rate for all employed in the manufacturing sector. Based on Germany's PPP cost of living, workers in the manufacturing sector needed a rate of $39,59, to be at par (equalised) with the U.S. rate. Yet, its current nominal rate is 20% higher ($47,38) than what is required.

In contrast, all other economies recorded at least a small gap. France, Italy, Australia, Singapore, Canada and Spain recorded gaps between 2% and 20%, whilst the U.K, Japan and South Korea recorded gaps between 20% and 30% of their respective equalisation level. Far behind these economies, Brazil and Mexico continue to have huge gaps with their U.S. counterparts of 69% and 72% respectively.
Brazil remains far behind its best Eq-Idx of '96 in 2011. Mexico's track record since 1996 is the worst in this assessment. Thus, barring the Philippines, Mexico continues to have the worst position of the 31 countries in the three regions of our assessments.

Download the pdf file with the wage rate gap update for 12 economies (Germany, France, Italy, Canada, U.K., Spain, Japan, South Korea, Singapore, Brazil, Australia and Mexico).