As in 2001, Japan and Taiwan continued to show the largest unit labor cost declines in 2002 (in U.S. dollar terms). The United States was the only other economy among the 14 studied with a decline in unit labor costs last year.
In 2002, the U.S. dollar depreciated against the currencies of most countries in this comparison, particularly against the Norwegian krone. This depreciation reversed a seven-year trend when the U.S. dollar recorded annual average appreciation against most other currencies.
As a result of the dollar's fall, most countries showed large increases in unit labor costs expressed in U.S. dollars, in particular Norway, the Netherlands, Italy, and Korea. The annual increase in Korean unit labor costs expressed in U.S. dollars was the largest since the Asian financial crisis in 1997.
Only the Japanese yen and the Canadian and Taiwanese dollars depreciated against the U.S. dollar in 2002.
For most of the economies studied, increases in unit labor costs expressed in national currencies were below their average annual growth rates of the last 30 years in 2002, but the depreciation of the U.S. dollar last year raised dollar-denominated unit labor cost increases above their historical growth rates.
These data are from the Foreign Labor Statistics program. For more information, see news release, "International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends, 2002" (PDF) (TXT), USDL 03-469. Unit labor costs are defined as the cost of labor input required to produce one unit of output. They are computed as labor compensation in nominal terms divided by real output.
Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Manufacturing unit labor costs lower in 2002 in U.S., Japan, Taiwan at https://www.bls.gov/opub/ted/2003/sept/wk3/art02.htm (visited February 23, 2024).