In 2021, average hourly labour costs in the whole economy were estimated to be €29.1 in the EU and €32.8 in the euro area, up compared with €28.6 and €32.4, respectively, in 2020.
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 (€7.0) and Romania (€8.5), and the highest in Denmark (€46.9), Luxembourg (€43.0) and Belgium (€41.6), EuroStat reports.
Hourly labour costs in industry were €29.1 in the EU and €35.1 in the euro area. In construction, they were €26.0 and €29.3 respectively. In services, hourly labour costs were €28.8 in the EU and €31.6 in the euro area. In the mainly non-business economy (excluding public administration), they were €30.3 and €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 € 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.
