June 30, 2016    Volume 23, No. 6

Home
Search Back Issues
Acronyms
Guest Editorials
Links
Trading Exchanges
Comments
About Us

Lean Machines Sixteen Case
Studies On Lean
Manufacturing
From Manufacturing &
Technology News

Free e-mail newsletter


By The Numbers: The U.S. Has 12 Million Manufacturing Workers; China Has Ten Times That Number -- 114 Million


By Richard A. McCormack
richard@manufacturingnews.com

The number of manufacturing workers in China continued on a massive, historic, upward trajectory through 2013, the latest year for which data is available.

While the number of manufacturing workers in the United States fell by 2,952,000 from 2002 through 2013, the number of manufacturing workers in China surged by an incredible 27,696,736, according to data compiled from China by The Conference Board.

At the end of 2013, there was an order-of-magnitude (10 times) more manufacturing workers in China (113,577,801) than in the United States (11,960,000).

Moreover, the vast majority of those Chinese workers are still not getting paid anything close to what American manufacturing employees are paid, despite widespread publicity about a supposedly quickly decreasing wage gap between American and Chinese workers.

Both narratives -- that China is losing manufacturing jobs and that the wage gap is almost closed between American and Chinese workers -- are far off the mark.

According to The Conference Board's International Labor Comparisons (ILC) program, the total compensation cost of Chinese manufacturing employees was only 11.3 percent of what American manufacturing workers made in 2013. In 2013, the total compensation cost of a Chinese manufacturing worker was $4.12 per hour. By comparison, the total hourly compensation cost for a manufacturing worker in the United States in 2013 was $36.34.

"It's the rate of growth that people are reacting to, not the level," says Elizabeth Crofoot, senior economist at the The Conference Board's ILC program. The Chinese compensation data is an average of rural and urban areas. "We don't have data for only urban areas, which have higher compensation costs, especially in the very large cities that are highly industrialized," says Crofoot. "So the levels in those specific areas might be catching up."

Compensation costs refer to the total hourly cost to the employer for a worker and includes direct pay, bonuses and overtime, social insurance, pension and health care costs and taxes.

Manufacturing employee compensation costs are even lower elsewhere in the world.

For a manufacturing worker in India, the total average hourly compensation cost in 2012, the most recent year for which data is available, was only 4.5 percent of the average American manufacturing worker. The total hourly compensation cost for an Indian manufacturing worker was $1.59, the same amount as in 2011.

Mexican manufacturing workers are also paid far less than American workers and their pay and benefits are going down. In 2015, the average hourly compensation cost of a Mexican worker was $5.90, down from $6.76 in 2014. A Mexican manufacturing worker's total compensation cost was only 16 percent of that of an American manufacturing worker, down from 18 percent in 2014.

Other countries have manufacturing compensation costs that are far lower than those of American employers. The hourly compensation cost for a worker in the Philippines in 2015 was $2.16 (6 percent of the American amount); in Turkey it was $5.81 per hour (16 percent of the U.S. amount); in Taiwan it was $9.51 (25 percent of the U.S. amount); and in Brazil it was $7.97 (21 percent of U.S. amount).

The ILC program has not determined the average hourly compensation costs of manufacturing workers in Vietnam, which are thought to be far lower than those in China.

There were seven countries in the world in 2015 that had higher hourly manufacturing worker compensation costs than the United States ($37.71). Switzerland had the highest hourly compensation costs in 2015 (though its hourly rate is not available); followed by Norway at $49.67; Belgium at $46.56; Denmark at $44.44; Germany at $42.42; Sweden at $41.68; Australia at $38.75; and Finland at $38.46.

The International Labor Comparisons program was adopted by The Conference Board from the U.S. Bureau of Labor Statistics in 2013, when the Obama administration decided that keeping track of foreign wages was not a government priority.

The Conference Board notes that data on manufacturing compensation costs and employees in China is not easily compared to data compiled from other countries. The number of manufacturing employees in China is broken down by "urban units" in urban areas and town and village enterprises (TVEs) in rural areas. These are only the "registered enterprises," and they represent "only the formal sector of the manufacturing economy captured by government registration records."

There could be more manufacturing employees in China than are officially counted. "Manufacturing workers in unregistered or informal manufacturing, who earn substantially less than their formal sector counterparts, are not included," notes the ILC program. "Further, urban unit data are highly skewed toward the state-owned sector, introducing further bias in the final estimates." The data sets are located at

https://hcexchange.conference-board.org/ilcprogram/index.cfm


Provide us with a comment on this article.

We'll notify you as issues and free stories like this one appear on this site. Sign up for a content-rich, e-mail newsletter. (You will NEVER receive spam.)

Please consider subscribing to Manufacturing & Technology News. You will have access to all back issues dating to 1998, plus receive the current issue electronically and via regular mail. It is all original reporting on the most important stories facing U.S. industry. No advertising. The cost of a new subscription is $495 per year.




[Home]
Scan Back Issues Comments | About Us | How To Order

Reproduction Rights 2016 Are Granted To This Story So Long As A Link Is Provided To This Source Of Original Content.