1. Home
  2. Studies
  3. An International Comparison of Industrial Labour Costs
Christoph Schröder IW-Trends No. 2 21. June 2019 An International Comparison of Industrial Labour Costs

In 2018, labour costs in German manufacturing were running at 41.0 euros per employee hour. This puts Germany in fifth place in the German Economic Institute’s comparison of labour costs in 42 countries and means that its costs are almost one-third higher than the average for industrialised countries.

Download PDF
An International Comparison of Industrial Labour Costs
Christoph Schröder IW-Trends No. 2 21. June 2019

An International Comparison of Industrial Labour Costs

IW-Trends

Download PDF

Share this article:

or copy the following link:

The link was added to your clipboard!

In 2018, labour costs in German manufacturing were running at 41.0 euros per employee hour. This puts Germany in fifth place in the German Economic Institute’s comparison of labour costs in 42 countries and means that its costs are almost one-third higher than the average for industrialised countries.

There are still large differences in cost levels between eastern and western Germany. At 27.8 euros per hour, eastern German industry produces 35 per cent more cheaply than its western counterpart (42.9 euros). Since the turn of the millennium, whilst worsening slightly compared with other foreign competitors, German labour costs have improved relative to the Eurozone. However, this development has been by no means continuous. Although Germany succeeded in continuously reducing its cost disadvantage vis-à-vis the rest of the Eurozone in the 2000s, after flattening out for four years its labour cost position deteriorated again and by 2018 had worsened by 5 percentage points. The country’s long-lasting boom has thus not only led to growth in employment, but also to an above-average increase in labour costs. German industry’s network of component suppliers and service providers means that manufacturing also involves other sectors, such as the transport sector. The German Economic Institute (IW) therefore also calculates the labour costs of the manufacturing sector including its intermediate consumption network. Taking this combined effect reduces labour costs in German industry in 2018 by a good 2 euros to 38.8 euros. This is the strongest effect in Europe, showing that German industry’s upstream suppliers have particularly favourable labour costs compared to manufacturing itself. Nevertheless, Germany still ranks sixth and is thus in the top group of this cost ranking as well.

 

Download PDF
An International Comparison of Industrial Labour Costs
Christoph Schröder IW-Trends No. 2 21. June 2019

Christoph Schröder:Industrielle Arbeitskosten im internationalen Vergleich

IW-Trends

Download PDF

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
The Costs and Benefits of Continuing Further Training
Susanne Seyda / Beate Placke IW-Trends No. 4 4. December 2017

The 9th IW Survey of Further Training

In 2016 some 85 per cent of companies in Germany were active in continuing vocational training, using a broad mix of methods.

IW

Read the article
IW Research Group Macroeconomic Analysis and Forecast IW-Trends No. 4 27. November 2017

Has the German Economy Reached its Limit?: Skilled Labour Shortages as a Brake on Growth

The German economy is performing significantly better than was expected in the first few months of this year. During the course of 2017, certain early fears – especially of a weakening of the global economy due to increasing protectionism – have proved ...

IW

Content element with id 8880 Content element with id 9713