German labour costs exceed EU average by one-third

3741776281_7dfeb48039_o.jpg [Zukunft Industrie/Flickr]

The latest numbers show labour is more expensive in Germany than in many other EU member states, especially in the industrial sector, though the trend does not show any negative effects for the country’s competitiveness. EURACTIV Germany reports.

In 2014, employers spent an average of €31.80 per man-hour in Germany’s private sector economy. This ranks the country eighth among its EU counterparts, the Federal Statistical Office reported on Monday (4 May) in Wiesbaden.

In the manufacturing industry, which faces particularly high international competition, one man-hour costs €37 on average. Here, Germany ranked fourth in the EU-wide comparison.

Still, the country’s industry remains competitive internationally. This is largely due to high productivity, the GNP generated by each worker, a category where Germany performed above the EU average.

Europe’s highest labour costs in the private sector were found in Denmark. There, one man-hour costs €42 on average, according to the Statistical Office’s numbers, with €41.60 in the manufacturing industry.

Employers paid the least in Bulgaria with an average of €3.80 per man-hour in the private sector economy overall and €3.20 in manufacturing. Labour costs were calculated by combining gross income and incidental wage costs.

In 2014, employers in Germany’s private economy spent an average of €28 on incidental wage costs per €100 of gross income paid.

>> Read: European Parliament divided over German minimum wage regulation

These additional costs include social contributions, particularly payroll taxes for social security, expenses for occupational retirement benefits as well as wages and salaries paid by the employer in the event of illness.

As a result, Germany’s incidental wage costs were under the EU average of €31. In an EU-wide comparison, the Federal Republic was ranked near the middle, in 15th place.

French employers paid an average of €47 in incidental wage costs for every €100 of wages, Sweden ranked second with €46, and Belgium took up third with €44.

In Malta, employers pay the lowest amount for costs of this kind, at only €9 per €100 of wages.

On 1 January 2015, Germany introduced a general minimum gross salary of €8.50 per hour.

The wage floor will be readjusted yearly, starting in 2018. A minimum wage committee consisting of employer and employee representatives will decide on the adjustments made. Researchers will advise the committee. The German government can make the adjustment binding by regulation for all employers and workers.

Almost all EU member states - 21 of the 28 - have a legal minimum wage covering all sectors. The exceptions - besides Germany for the time being - are Denmark, Finland, Italy, Austria, Sweden and Cyprus.

>>Read: Merkel cabinet agrees on €8.50 minimum wage

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