In 2021, average hourly labour costs in the whole economy (see methodological note) were estimated to be EUR 29.1 in the EU and EUR 32.8 in the euro area, up compared with EUR 28.6 and EUR 32.4, respectively, in 2020.
These estimates come from data on labour costs levels published by Eurostat today. This article presents only a handful of findings from the more detailed Statistics Explained article.
Lowest in Bulgaria, highest in Denmark
The average hourly labour costs mask significant gaps between EU Member States, with the lowest hourly labour costs recorded in Bulgaria (EUR 7.0) and Romania (EUR 8.5), and the highest in Denmark (EUR 46.9), Luxembourg (EUR 43.0) and Belgium (EUR 41.6).
Hourly labour costs in industry were EUR 29.1 in the EU and EUR 35.1 in the Euro Area. In construction, they were EUR 26.0 and EUR 29.3 respectively. In services, hourly labour costs were EUR 28.8 in the EU and EUR 31.6 in the Euro Area. In the mainly non-business economy (excluding public administration), they were EUR 30.3 and EUR 33.6 respectively.
The two main components of labour costs are wages & salaries and non-wage costs (e.g. employers’ social contributions). The share of non-wage costs in total labour costs for the whole economy was 24.6 % in the EU and 25.1 % in the euro area. The lowest shares of non-wage costs were recorded in Lithuania (3.7 %), Romania (4.9 %) and Ireland (8.7 %) and the highest in Sweden (32.0%), France (31.9 %) and Italy (28.3 %).
Hourly labour costs increased most in Lithuania
In 2021, compared to 2020, hourly labour costs at whole economy level expressed in EUR rose by 1.7% in the EU and by 1.2% in the euro area.
Within the euro area, hourly labour costs increased in all Member States except Italy (-1.6%) and Spain (-0.3%). The largest increases were recorded in Lithuania (+12.5%), Estonia (+6.5%), Cyprus and Slovenia (+6.2% each) as well as Latvia (+6.1%).
For Member States outside the euro area, the hourly labour costs expressed in national currency increased in 2021 in all countries, with the largest increases recorded in Bulgaria (+9.1%), Poland (+8.2%) and Hungary (+7.3%). They increased least in Sweden and Croatia (+3.0% each).
In 2021, most Member States extended the validity of support schemes introduced in 2020 to alleviate the impact of the COVID-19 pandemics on enterprises and employees. They mainly consisted of short-term work arrangements and temporary lay-offs fully or partly compensated by government. Those schemes were generally recorded as subsidies (or tax allowances) with a negative sign in the non-wage component of labour costs.
For more information:
- Eurostat Statistics Explained article on hourly labour costs
- Eurostat website section dedicated to labour cost statistics
- Eurostat database on labour costs
- Total Labour Costs refer to the total expenditure borne by employers in order to employ staff. They cover wage and non-wage costs less subsidies. They do include vocational training costs or other expenditures such as recruitment costs, spending on working clothes, etc. 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.
- Labour costs data presented in this news item cover enterprises with 10 or more employees (including apprentices). Estimates are obtained by extrapolating the 2016 Labour Cost Survey hourly labour cost data expressed in national currencies using the quarterly Labour Cost Index (LCI) transmitted by the Member States. In order to calculate monetary estimates in EUR and derive European aggregates, average annual exchange rates have been used. The LCI not adjusted for calendar effects is used, except for Denmark, Sweden Iceland and Norway where only calendar-adjusted data are available.
- Data for Austria, Denmark, Spain, Finland and Iceland are taken from national sources.
- In this publication, the whole economy includes all economic activities except NACE Rev. 2 sections : ‘A – Agriculture, forestry and fishing’, ‘O – Public administration and defence; compulsory social security’, ‘ T – Activities of households as employers; undifferentiated goods – and services – producing activities of households for own use’ and ‘U – Activities of extraterritorial organisations and bodies’.