EU – Baltic States, Labour-market, Modern EU, Wages

In 2016, average hourly labour costs in the whole economy (excluding agriculture and public administration) were estimated to be €25.4 in the EU-28 and €29.8 in the euro area.

However, this average masks significant gaps among the EU member states:

-         lowest hourly labour costs recorded in Bulgaria (€4.4), Romania (€5.5) and Lithuania (€7.3);

-          the highest are in Denmark (€42.0), Belgium (€39.2), Sweden (€38.0), Luxembourg (€36.6) and France (€35.6). That means that job’s remuneration is still 4-5 times lower in the Baltic States than that in the Nordic States, for example.  

The EU data cover enterprises with 10 or more employees. Total Labour Costs cover wage and non-wage costs less subsidies. They do not include vocational training costs or other expenditures such as recruitment costs, spending on working clothes, etc.

Therefore, lowest labour costs are in Bulgaria and Romania, while the highest are in Denmark and Belgium. 

Differences

Sectors

In industry, labour costs per hour were €26.6 in the EU-28 and €32.6 in the 19 euro area states, in services €25.8 and €28.7 respectively and in construction €23.3 and €26.1. In the mainly non-business economy (excluding public administration), labour costs per hour were €26.6 in the EU-28 and €29.7 in the euro area in 2016.

Labour costs are made up of wages & salaries and non-wage costs such as employers' social contributions. The share of non-wage costs in the whole economy was 23.9% in the EU and 26.0% in the euro area, ranging from 6.6% in Malta to 33.2% in France.

For the EU and euro area, labour costs in the business economy accounts for about 76% of the labour costs of the whole economy. It can be further broken down into:

- Industry, which includes: mining and quarrying; manufacturing; electricity, gas, steam & air conditioning supply; water supply, sewerage, waste management and remediation activities. Industry accounts for around 22% of the whole economy.

- Construction, which accounts for around 6% of the whole economy.

- Services, which include: wholesale and retail trade, repair of motor vehicles & motorcycles; transportation & storage; accommodation and food service activities; information and communication; financial & insurance activities; real estate activities; professional, scientific and technical activities; Administrative and support service activities. Services account for around 48% of the whole economy.

The mainly non-business economy (except public administration) for the EU and euro area accounts for about 24% of the labour costs of the whole economy. It includes: education; human health and social work activities; arts, entertainment and recreation, etc. service activities.

Wage and salary costs include direct remunerations, bonuses, and allowances paid by an employer in cash or in kind to an employee in return for work done, payments to employees saving schemes, payments for days not worked and remunerations in kind such as food, drink, fuel, company cars, etc.

Non-wage costs include the employers’ social contributions plus employment taxes regarded as labour costs less subsidies intended to refund part or all of employer’s cost of direct remuneration.

References: Full text available on EUROSTAT website at:

http://ec.europa.eu/eurostat/documents/2995521/7968159/3-06042017-AP-EN.pdf/6e303587-baf8-44ca-b4ef-7c891c3a7517

- http://europa.eu/rapid/press-release_STAT-17-892_en.htm?locale=en. Brussels, 6 April 2017.