Monday, May 03, 2021
Seventh place in the EU
Germany remains a high-wage country
Germany’s employers paid an average of 36.70 euros for one hour of work last year. In terms of labor cost levels, the Federal Republic of Germany is in the top third within the EU.
Working in Germany became more expensive again in the Corona year 2020 and is in the upper third of the EU comparison. Employers from industry and service providers paid an average of 36.70 euros for an hour worked, according to the Federal Statistical Office. This is three percent more than in 2019. On average in the European Union, there was an increase of 2.9 percent to 28.00 euros. This puts Germany in seventh place – behind Denmark (46.90 euros), Luxembourg, Belgium, Sweden, France and Austria. The lowest costs are found in Bulgaria (6.40 euros) and Romania (7.70 euros).
In manufacturing, which faces particularly strong international competition, an hour worked in Germany cost an average of EUR 41.60. As in 2019, Germany ranks third in an EU comparison. One hour of work in German industry was 46 percent more expensive than the EU average (28.50 euros). For services, the Federal Republic was in seventh place with 34.10 euros (21 percent above the EU average), after ninth place in 2019.
Labor costs are made up of gross earnings and ancillary wage costs. In 2020, employers in Germany paid an additional EUR 27 ancillary wage costs to industry and service providers for every EUR 100 gross earnings – and thus less than the EU average of EUR 32. For every 100 euros in wages in Sweden (47 euros), the highest non-wage costs were paid.
The corona aid from the individual governments has also had an impact on non-wage labor costs. In addition to short-term work regulations, subsidies and tax breaks were an essential element in cushioning the consequences of the corona crisis on companies and employees. “If these payments increase, the employers’ non-wage costs decrease proportionally,” explained the statisticians. In Ireland, therefore, the non-wage costs per 100 euros gross earnings have halved from 18 to 9 euros. In Malta there was even a negative value. The wage subsidies paid to companies exceeded the employers’ social contributions, so that overall negative ancillary wage costs were recorded.