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March 2011, Vol. 134, No. 3
China’s employment and compensation costs in manufacturing through 2008
Judith Banister and George Cook
Judith Banister is a senior consultant with Javelin Investments. She is the former head of the International Programs Center at the U.S. Census Bureau. Dr. Banister may be reached by email at firstname.lastname@example.org. George Cook is an economist formerly in the Division of International Labor Comparisons, Bureau of Labor Statistics.
Despite large increases in recent years, hourly compensation costs in China’s manufacturing sector remained only 4 percent of those in the United States in 2008; that year, hourly compensation costs rose to $1.36, as China’s manufacturing employment continued to increase despite the beginning of the global economic downturn.
In 2006, China became the United States’ second-largest trading partner in manufactured goods behind Canada.1 Only 4 years later, China surpassed Japan as the second-largest economy in the world.2 Because of China’s growing importance to the U.S. and global economies, there has been great demand for statistics about China’s manufacturing sector, particularly employment statistics and comparable labor-cost measurements. In 2005, the Bureau of Labor Statistics sponsored a baseline research project to assess the quality of China’s data on employment and labor compensation in manufacturing. The resulting report contains estimates of compensation costs in China’s manufacturing sector for the base year of 2002.3
The data sources and estimation procedures used in that original work have been the basis for updates through 2006 and, in this article, through 2008.4 Building on the baseline report and subsequent articles, this article documents and analyzes changes in China’s manufacturing employment and hourly labor compensation costs on the basis of official data through 2008 and anecdotal reports from China since then.
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1 “TopTrading Partners - Surplus, Deficit, Total Trade,” U.S. Census Bureau, Foreign Trade Division, on the Internet at www.census.gov/foreign-trade/top/ (visited Feb. 7, 2011).
2 Tomoko A. Hosaka, “China surpasses Japan as world’s No. 2 economy,” Washington Post, Aug. 16, 2010, on the Internet at www.washingtonpost.com/wp-dyn/content/article/2010/08/15/AR2010081503697.html?hpid=topnews (visited Feb. 7, 2011).
3 For the original report on 2002 employment and labor compensation in manufacturing, see Judith Banister, “Manufacturing Employment and Compensation in China,” on the Internet at www.bls.gov/fls/chinareport.pdf (visited Feb. 7, 2011). See also two Monthly Labor Review articles based on this report: Judith Banister, “Manufacturing employment in China,” Monthly Labor Review, July 2005, pp. 11–29, on the Internet at www.bls.gov/opub/mlr/2005/07/art2full.pdf (visited Feb. 7, 2011); and Judith Banister, “Manufacturing earnings and compensation in China,” Monthly Labor Review, August 2005, pp. 22–40 on the Internet at www.bls.gov/opub/mlr/2005/08/art3full.pdf (visited Feb. 7, 2011).
4 The baseline research for the year 2002 was updated through 2004 in Erin Lett and Judith Banister, “Labor costs of manufacturing employees in China: an update to 2003–04,” Monthly Labor Review, November 2006, pp. 40–45, on the Internet at www.bls.gov/opub/mlr/2006/11/art4full.pdf (visited Feb. 7, 2011). Manufacturing employment and compensation estimates were extended from 2002 through 2006 in Erin Lett and Judith Banister, “China’s manufacturing employment and compensation costs: 2002–06,” Monthly Labor Review, April 2009, pp. 30–38, on the Internet at www.bls.gov/opub/mlr/2009/04/art3full.pdf (visited Feb. 7, 2011).
International Labor Comparisons
China's manufacturing employment and compensation costs: 2002–06.—Apr. 2009.
Labor costs of manufacturing employees in China: an update to 2003–04.—Nov. 2006.
Manufacturing earnings and compensation in China.—Aug. 2005.
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