Luxembourg labour cost remains highest in EU
At more than 50 euros per hour, the Grand Duchy remains the frontrunner despite huge increases in other countries.
Average labour costs of over €50 per hour in Luxembourg made it the country where employees were priciest in 2023, the German Federal Statistical Office revealed on Thursday.
The comparison of labour costs showed that salaries and non-wage labour costs in the EU are anything but uniform - especially when comparing the two extremes, Bulgaria and Luxembourg. While labour costs per hour worked were €9.30 in Bulgaria in 2023, they were €53.90 in Luxembourg, which is almost six times higher.
This makes the Grand Duchy the EU country with by far the highest labour costs in the manufacturing and service sectors last year, the bureau said. Denmark came in second with an hourly cost of €48.10.
Luxembourg’s labour market is slowing down
As in previous years, labour was cheapest in less developed EU economies like Bulgaria (€9.30) and Romania (€11.00).
However, with increasing industrialisation and the relocation of production from high-wage regions, labour costs are also rising in Eastern European countries. The highest rates of increase in 2023 were recorded in Hungary (+19.9%), Romania (+16.1%) and Poland (+15.9%). Sweden was the only country to record falling labour costs.
These labour costs are made up of gross earnings and non-wage labour costs, according to the statistics office. Gross earnings include remuneration for hours worked, special payments, capital-forming benefits, remuneration for days not worked (including holidays or public holidays) and benefits in kind.
Non-wage labour costs include employers' social security contributions (including sick pay), the costs of vocational training and further training, other expenses and taxes borne by the employer. Wage subsidies received reduce the labour costs.
(This article first appeared in the Luxemburger Wort. Translation by Tracy Heindrichs.)
