In the manufacturing sector, highest hourly wages are found in the industrialized countries and lower wages are more usual for developing economies. Resulting wage disparities can be quite shocking. For example, the average hourly wage for a Brazilian textile worker is $1.73 as compared to $13.60 in the U.S. and $17.27 in Germany (Bureau of Labor Statistics, 2003).
Wages in the manufacturing sector rose in developing economies during the 1990s as a direct result of economic growth in those nations fueled by changes in government policies, trade output, and increased FDI. Where exports rose rapidly, wages also increased by 3% per year (Twice the workers, 1995). The rapid job and wage growth found in developing nations through the 1990s was offset by slow to no growth in manufacturing wages in the industrialized world. Among G-7 countries, real growth rates of total compensation per employee fell from 2.5% between 1961–1978 to 1% between 1988–94 (World Economic and Social Survey, 1995: 235).
Hourly Wage Changes in Advanced Economies
In 1985 the U.S. had the world's highest manufacturing wage rate, but it was fourth behind Germany, Japan, and France by 1995. By 1997, relative wage rates had changed yet again. According to Morgan Stanley figures reported in The Wall Street Journal (The outlook, 1998), average manufacturing declined in many industrialized nations between 1995 and 1997, but they increased in the U.S. from $17.19 to $18.17 per hour. Over the same period, declines were evident in Germany where hourly wage declines went from $31.85 to $27.81; Japan where it was from $23.66 to $19.01. France experienced an hourly wage decline from $19.34 to $16.91.
General conclusions about wages are:
wages are higher in the industrialized world than in the developing economies;
wages are higher for dominant groups than for women and minority groups;
in the manufacturing sector wages are rising in the developing economies and falling in the industrial economies;
total compensation per hour varies across the world and in ways we might expect: advanced economies pay more compensation per hour than developing economies. Part of this wage differential is due to the fact that workers in the advanced economies are more educated than those in developing economies.