A report issued by Eurostat, the statistical office of the European Communities, reveals that eurozone labour costs in the first quarter of 2005 have gone up by 3.1% in nominal terms. This figure exceeds the 2.5% increase witnessed in the first quarter of 2004. In the EU-25, statistics from the first quarter of 2005 illustrate an annual rise of 3.4%, a noticeable increase up from 2.9% in the final quarter of the previous year.
Labour costs are a measurement of the total expenditure incurred by employers of employing the labour force. The figure includes employees' gross earnings (comprising direct remuneration and the value of any social contributions or income tax etc. payable by the employee) as well as indirect costs (comprising social contributions from employers to secure entitlement of employee social benefit and taxes connected to employment minus subsidies to refund cost of remuneration).
The report, released on 21 June, demonstrates small annual rises in Germany (1.2%), Luxembourg, Portugal (both with 1.9%) and Austria (2.5%). Larger increases were recorded in Lithuania (12.2%), Slovenia (11.5%) and Estonia (9.6%). The most significant annual change was observed in Latvia, where annual labour costs rose by 16.3%.
