What was the impact of the energy crisis and inflation on labor costs in Europe? How do the different countries of the European Union now rank? In a study, the German Statistical Office has just drawn up an inventory, distinguishing between services and industry.
Race report? It is in Luxembourg that an employee costs the most with an average cost of 53.90 euros gross per hour. And it is in Bulgaria that it is the least expensive, with an hour of work costing 9.30 euros.
France and Germany are among the most expensive countries. According to the Federal Office, the two nations rank fifth and sixth respectively out of the 27 countries of the European Union in terms of labor costs. In the space of a year, the Netherlands overtook France and Germany overtook Sweden.
In 2023, German companies in the production and service sectors paid on average 41.30 euros for an hour of work performed. Their French alter ego had to pay almost a euro more, at 42.20 euros per hour.
A significant gap with the European average
Compared to the European average (31.80 euros), German and French employers pay, all costs included, around 30% more for an hour of work. But the gap increases by another ten points when we focus on industry.
More interesting, due to high salaries in German automobiles, chemicals and machine tools, France falls behind Germany when we focus on industry. Across the Rhine, an hour of work cost on average 46 euros last year in industry compared to 44.6 euros in France.
A classification that is reversed in services
On the other hand, things are reversed in services. Labor costs last year were 39.80 euros per hour in Germany, compared to 42.30 euros in France. A difference probably linked to the legacy of the Hartz IV laws of the Schröder years and “mini-jobs” paid a little over 500 euros per month.
Across the European Union, labor costs per hour worked still vary considerably. Employees are most expensive in the Benelux and Denmark, with hourly costs ranging from 47.1 euros to 53.90 euros.
Especially since within the Benelux, costs soared last year with average increases of 8.2% in Belgium, 6.8% in the Netherlands and 6.1% in Luxembourg. It must be said that in the Netherlands, the minimum wage jumped by 10.15% on 1er January 2023. In the same way, the indexation of salaries to prices has been practiced in Belgium for more than a century, even if it is not a legal obligation.
A decline in wages in Sweden
In comparison, developments were more limited in France and Germany, with average increases of 3.6% and 4.8%. The lowest increases were seen in Italy and Denmark. “In Sweden, labor costs have even fallen,” emphasizes Destatis.
Based on Eurostat figures, the labor cost published by Destatis notably includes remuneration for hours worked and not worked, employers’ social contributions, training and taxes payable by the employer.