ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, September 12, 1996 TAG: 9609130032
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
A decade ago, it cost factory owners across Europe much less for an hour's work than it did in America. Now, all but a few European countries have far higher hourly employee costs in U.S. dollars.
A U.S. factory owner pays an estimated $17.20 to get an hour's service from the average worker. In Germany, the cost is $31.88 an hour.
Of 17 European countries surveyed by the U.S. Labor Department, only Britain, Ireland, Spain, Greece and Portugal have costs lower than those in the United States.
``It's largely a matter of the dollar,'' said Mark Anderson, who studies international standards for the AFL-CIO. ``In 1985, the dollar was its peak. Now it's worth a lot less in many other currencies, so the same cost in marks or yen amounts to more dollars. In dollar terms, goods from other countries are more expensive than they were, and harder to sell in the United States. U.S. goods are cheaper and easier to sell in other countries.''
In 1985, it took nearly three West German marks to buy a dollar. In 1995, on average, the price was less than a mark and a half. A decade ago, a dollar cost 238 Japanese yen. In 1995, it averaged 94 yen.
Also, wages have risen faster in many other countries than in the United States, Anderson noted. The effect is magnified by the loss in the value of the dollar compared to currencies of some other industrialized countries.
The result is an advantage for U.S. producers that is not always reflected in trade figures. The trade deficit, now at $147 billion on an annual basis, has grown despite otherwise positive trends in the U.S. economy.
In 1985, average U.S. labor cost was $13.01 an hour, with Norway a distant second at $10.37, according to data from the Bureau of Labor Statistics. The figures reflect wages and all taxes and benefits paid by employers, as well as training and other per-worker costs.
Based on 1995 data, costs in other countries around the world, except for Japan, still trail those of the United States and most of Europe. The hourly cost in Mexico was $1.51.
After Germany, the highest costs are in other European countries - $29.28 an hour in Switzerland, $26.88 in Belgium, $25.38 in Austria and $24.78 in Finland. Cost of an hour's labor in Japan was $23.66, up from $6.34 in 1985.
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