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Labor Market

Germany’s labor costs rising faster than EU average

For years, slow wage growth has bolstered Germany’s exports. But new data show since 2011, German labor costs have been rising faster than the EU average. Germany remains competitive thanks to high labor productivity.

Labor costs in Germany are increasing, bucking a years-long trend during which they grew more slowly than labor costs in other European Union countries, the Federal Statistical Office reported Monday.

Germany's businesses benefited from more than a decade during which increases in labor costs stayed well below the EU average. In 2011, that trend reversed. In 2013, employers in Germany spent 34 percent more per employee than the average in Europe as a whole.

German companies spent on average 31.70 euros ($43.61) per hour worked last year, according to the statistics office. Mean labor costs in the EU were 23.70 euros.

Long period of wage restraint

Overall, Germany ranked seventh among EU member states in terms of per-capita labor costs, which include gross earnings and non-wage costs such as contributions to social security and pension schemes.

In the manufacturing sector, an hour of a worker's time cost German employers 36.20 euros, the fifth highest rate in the EU and 48 percent higher than the bloc-wide average.

Gender wage gap in Germany

The relative wage restraint from which German businesses profited during the 2000s drew sharp criticism from weaker EU member states, who said Germany was using "wage dumpin"' to keep its export prices low. Experts believe Germany will remain competitive despite higher labor costs, thanks to the above-average productivity of workers in the country.

The highest labor costs in Europe were registered in Sweden at 43 euros per hour, and the lowest in Bulgaria at 3.70 euros.

cjc / js (dpa, epd)

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