German labour costs with second lowest increase in Europe

According to the Federal Statistical Office, in Europe labour cost increased the least in Malta and Germany in the second quarter of 2008. German private business employers paid 1.1% more wages and salaries per working hour in the second quarter of 2008 as compared to the same quarter in 2007. However, the two major components of labour costs developed differently: while gross wages and salaries increased by 1.6%, ancillary labour costs fell by 0.3%.

In particular the reduced contribution by employers (from 2.10% to 1.65%) to unemployment insurance was reflected by lower ancillary labour costs. As compared to the first quarter of 2008 labour costs remained unchanged.

There are also data on changes in labour costs in the first quarter 2008 available from other European countries. According to these, one labour hour became by 2.1% more expensive in Germany in the first quarter this year as compared to the first quarter last year. This increase was smaller in Malta only (+2.0%). Germany was followed by Sweden (2.2%), France (2.5%) and Luxembourg (2.7%). Labour costs increased most in Latvia with a plus of 33.3%. The average in the European Union was 4.3% which is significantly above the increase in Germany. GERMAN