German labor costs rise faster than EU average | Business| Economy and finance news from a German perspective | DW | 07.09.2012
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German labor costs rise faster than EU average

The price for an hour of work in Germany rose faster than in most EU countries in 2011 as labor unions were able to push through higher wages on the back of robust economic growth. In 2012, the trend remains unbroken.

In 2011, private sector labor costs per hour of work in Germany surged by three percent, outpacing an average rise by 2.6 percent in the 27-nation European Union, Germany's Federal Statistics Office (Destatis) said Friday.

The price for an hour of work rose steeper only in Bulgaria at 10.5 percent, followed by two other relatively new EU members from eastern Europe, Romania and Slovakia, where labor costs jumped 7.1 and 5.5 percent respectively.

By contrast, Portugal reported a drop by 0.2 percent, while workers in Greece had cost employees a staggering 5.5 percent less in 2011, Destatis said, because of "noticeable impacts" of the two countries' debt crisis on national wages.

Despite the rise in 2011, labor costs in Europe's biggest economy, which stood at 30.10 euros ($38.03) per hour, were only the seventh highest in Europe. Belgium (39.30 euros), Sweden (39.10), Denmark (38.90), France (34.20), Luxembourg (33.70) and the Netherlands (31.10) reported higher labor costs, Destatis figures showed.

However, German labor costs were continuing to rise above average EU levels in 2012, Destatis said, as they climbed 1.5 percent in the second quarter of 2012, compared with the previous quarter.

In addition, the average price of an hour of work in the second quarter was 2.5 percent higher than in the same quarter a year ago, marking the fourth steepest quarterly rise in labor costs since records were first taken in 1997.

Sectors particularly affected by rising German labor costs were energy, plus 3.3 percent, as well as water utilities and the manufacturing industry, which saw increases of 3.1 and 3.0 percent respectively.

By contrast, Germany's social and medical services, as well as the entertainment industry experienced declining costs of about half a percentage point.

uhe/pfd (dapd, Reuters, dpa)