European Union


Research Reveals Huge Difference in Pay Across Europe

by Ray Clancy on March 31, 2015

Hourly rates of pay vary considerably across European Union countries with people paid the least in Bulgaria and the most in Denmark, new research shows.

Indeed, average rates in the EU ranged from €3.80 to €40.30 across Member States in 2014, according to data published by Eurostat.

EUROmoneyIn 2014, average hourly labour costs in the whole economy, excluding agriculture and public administration, were estimated to be €24.6 in the European Union and €29.2 in the Euro Area.

However, this average masks significant gaps between EU Member States, with the lowest hourly labour costs recorded in Bulgaria at €3.80, Romania at €4.60), Lithuania at €6.50 and Latvia at €6.60.

The data from the statistical office of the European Union also shows that the highest rate was in Denmark at €40.30, followed by Belgium at €39.10, Sweden at €37.40 and Luxembourg at €35.90.

Within the business economy, labour costs per hour were highest in industry at €25.50 in the EU and €32 in the Euro Area, followed by services at €24.30 and €28.20 respectively and construction at €22 and €25.80.

In the mainly non-business economy, excluding public administration, labour costs per hour were €24.70 in the EU and €29.10 in the Euro Area in 2014. Labour costs are made up of wages and salaries and non-wage costs such as employers’ social contributions.

The share of non-wage costs in the whole economy was 24.4% in the EU and 26.1% in the Euro Area, with the lowest in Malta at 6.9% and Denmark at 13.1% and the highest in Sweden at 31.6% and France at 33.1%.

The data cover enterprises with 10 or more employees and the data shows that between 2013 and 2014, hourly labour costs in the whole economy expressed in euro rose by 1.4% in the EU and by 1.1% in the Euro Area.

Within the Euro Area, the largest increases were recorded in Estonia with an increase of 6.6%, Latvia up 6%) and Slovakia up 5.2%. Decreases were 2.8% in Cyprus, 0.8% in Portugal and 0.2% in Ireland.

For Member States outside the euro area in 2014, and expressed in national currency, the largest increases in hourly labour costs in the whole economy between 2013 and 2014 were in Romania with growth of 6%), Lithuania and Poland both up 3.5% and Hungary up 3.3%.

The smallest increases were in Denmark with 0.9% and the United Kingdom at 1.3%. A decrease was recorded in Croatia of 0.8%.

A spokesman said that when comparing labour cost estimates over time, it should be noted that data for those Member States outside the euro area are influenced by exchange rate movements if analysed in euros.

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