German labor costs experience steep rise | Business| Economy and finance news from a German perspective | DW | 11.03.2013
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Business

German labor costs experience steep rise

Higher wages in many industries in Germany have led to a significant rise in labor costs in the country. According to the latest statistical data, the jump was again much bigger than the EU's average.

The costs of labor in Germany rose significantly last year, a report by the National Statistics Office (Destatis) showed on Monday.

It said calendar-adjusted labor costs jumped by 2.6 percent last year, which was slightly lower than the rise in 2011 but still much higher than the 10-year average recorded for Germany.

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Wage hikes in many industries were the main driver of labor costs, the office explained. It said average gross earnings per working hours surged by 3 percent last year, the steepest rise since the start of relevant data collection back in 1996.

Good or bad?

German labor costs also grew above average, if compared with developments across the 27-member European Union. In the third quarter of last year, for instance, Germany recorded a 2.9-percent rise, while the EU average was put at plus 1.9 percent.

"This means that labor costs in Germany rose above the EU average for seven straight quarters," the Destatis report said.

The economic assessment of rising labor costs continues to split German pundits into two camps. While government adviser Peter Bofinger and others welcome big wage hikes as a means to fuel domestic consumption and with it growth, others such as German central bank chief Jens Weidmann argue the country's competitiveness is at stake.

hg/dr (dpa, Reuters)

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