The average hourly cost of labor both in the euro area and in the European Union as a whole, in 2022, shows large differences from one country to another, with the lowest cost standing at 8 euros and the highest at 51 euro per hour, according to Eurostat data, according to which the average hourly labor cost is EUR 34.5 in the euro area and EUR 30.5 in the EU, compared to EUR 32.8 and EUR 29 respectively in 2021.
Worker on a highway construction sitePhoto: Profimedia Images / Sergei Malgavko/TASS/Sipa USA
In Greece, in 2022, the average hourly wage stood at 14.5 euros per hour, significantly below the EU average and in the category of countries with the lowest cost, i.e. below 20 euros, note the Greek journalists from Oikonomikos Tachydromos, quoted by Rador.
The two extremes: Bulgaria and Luxembourg
The lowest hourly labor costs in the EU are recorded in Bulgaria (8.2 euros) and Romania (9.5 euros), and the highest in Luxembourg (50.7 euros), Denmark (46.8 euros) and Belgium (43.5 euros).
Lowest cost: in construction
In industry, the average hourly labor cost was 30.7 euros in the EU and 36.6 euros in the euro area; in construction, the cost was 27.3 euros and 30.8 euros, respectively; in services, the hourly labor cost was 30.2 euros in the EU and 33.3 euros in the euro area, and in the predominantly non-business economy (excluding public administration) the cost was 31.3 euros and, respectively , 34.8 euros.
The two main components of labor costs are wages and non-wage costs (eg employers’ social security contributions). The share of non-wage costs in total labor costs for the economy as a whole was 24.8% in the EU and 25.5% in the euro area respectively. The lowest shares of non-salary costs were recorded in Lithuania (5.4%) and Romania (5.3%), and the highest in France (32.0%), Sweden (31.9%) and Italy ( 27.8%).
In Bulgaria, the biggest increase
In 2022, compared to 2021, economy-wide hourly labor costs, expressed in euros, increased by 5.0% in the EU and by 4.7% in the euro area.
In the euro area, hourly labor costs increased in all member states. The biggest increases were recorded in Lithuania (+13.3%), Ireland (+9.3%) and Estonia (+9.1%).
For EU countries outside the euro area, hourly labor costs expressed in national currency increased in 2022 in all countries, with the largest increases recorded in Bulgaria (+15.3%), Hungary (+13.9%) , Romania (+12.2%) and Poland (+11.7%). At the opposite pole, the smallest increase was recorded in Denmark (+2.3%).
The impact of support measures during the pandemic
In 2022, most EU countries phased out support schemes introduced in 2020 and extended in 2021 to mitigate the impact of the pandemic on companies and workers. They mainly consisted of short-term work arrangements and temporary redundancies compensated in whole or in part by governments.
The schemes were generally recorded as subsidies (or tax breaks), minus the non-salary component of labor costs, Eurostat points out. Therefore, the phasing out of support programs related to COVID contributes positively to the increase in hourly labor costs, the European agency concludes.