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Europe – Labour costs lower in euro countries

17 September 2012

Hourly labour costs across Europe have risen further in the second quarter of the year and were slightly lower in the Eurozone than in all 27 EU member states, official figures show this morning.

The EU statistics office reported that year-over-year second-quarter labour costs rose by +1.6% in the euro countries, compared to +1.8% in all EU states.

Labour costs are mainly made up of wages and salaries, and so-called non-wage costs which include the employers’ social contributions and certain employment taxes.

In the euro area, employers paid more in hourly wages and salaries, which grew by +1.7%. The non-wage component of labour costs increased by +1.2%.

In all EU countries hourly labour costs were slightly higher. Hourly wages and salaries rose by +1.9% and non-wage costs were up +1.4%, when compared to a year ago.

No country saw a reduction in labour costs and many exceeded the average rates. The figures also show big discrepancies in the rise of labour costs, which ranged from the lowest in Ireland (+0.4%) to the highest rise seen in Latvia and Bulgaria (+4.8%). 

In Belgium, labour costs grew by +2.7% in the second quarter of the year, echoing arguments by Adecco CEO Patrick De Maeseneire who recently said that employers in the country should leave due to higher costs, such as the 13th month of pay staff are entitled to.

In Germany and France, hourly labour costs were marginally lower in the second quarter of the year with the former seeing a +2.5% rise and the latter a +2.0%.

Italy, the fourth-largest European economy, saw a +1.1% rise in labour costs while in the Netherlands this figure was lower at 0.5%, making it one of the countries with the lowest increase in labour costs. 

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