In 2021, average hourly labour costs in the whole economy (see methodological note) 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.
These estimates come from data on labour costs levels published by Eurostat today. This article presents only a handful of findings from the more detailed Statistics Explained article.
Lowest in Bulgaria, highest in Denmark
The average hourly labour costs mask significant gaps between the 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).
Hourly labour costs in the 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%).
Source dataset: lc_lci_lev
Hourly labour costs increased most in Lithuania
In 2021, compared to 2020, hourly labour costs at the 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 the 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 the government. Those schemes were generally recorded as subsidies (or tax allowances) with a negative sign in the non-wage component of labour costs.