EconPapers    
Economics at your fingertips  
 

German labour costs have risen only moderately

Alexander Herzog-Stein (), Heike Joebges (), Torsten Niechoj, Ulrike Stein and Rudolf Zwiener

No 109e-2015, IMK Report from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: Based on Eurostat data the Macroeconomic Policy Institute (IMK) regularly analyses the development of labour costs and unit labour costs in Europe. This report presents labour cost trends in the private sector, disaggregated for private as well as public services and manufacturing industry, for a selection of European countries, the Euro Area and the European Union. In addition the development of unit labour costs in Europe is analysed, so allowing for labour productivity. Subsequently, the report examines the development of unit labor costs and the relationship between price competitiveness, export prices and unit labor costs.In 2014 hourly labour cost in the German private sector averaged 31.9 Euros. The German economy is in eighth position in the ranking of EU countries as in the previous year. With an annual rate of change of 1.8 %, the rise in labour costs in the German private sector was slightly above the European average. In the so-called European crisis countries hourly labour costs decreased again. Hourly labour costs in German manufacturing rose by 2.5 %. This is a slightly faster rate than in private services, where labour costs grew by 1.7 %. Consequently, the difference in labour costs between the two sectors diverged further and is now equal to 21 %, the largest intersectoral wage gap of all the EU countries.The adjustment process in the European crisis countries continued in 2014. Hence, the average rate of change in unit hourly labour cost in the Eurozone of 1.2 % was significantly below the ECB's inflation target of slightly below 2 % per annum. Therefore, the development of unit labour costs in the Euro Area as a whole does not comply with the ECB's inflation target. In Germany unit labour costs rose by 1.9 %. Overall, since the start of the currency union the rate of growth of unit labour costs in Germany was substantially below the ECB's inflation target. Therefore, wages in Germany should grow at an above average rate for several years to support the adjustment process in the European crisis countries.

New Economics Papers: this item is included in nep-eec
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.boeckler.de/pdf/p_imk_report_109e_2015.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imk:report:109e-2015

Access Statistics for this paper

More papers in IMK Report from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Nemitz ().

 
Page updated 2019-05-15
Handle: RePEc:imk:report:109e-2015