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Christoph Schröder IW-Trends No. 4 19. January 2017 An International Comparison of Unit Labour Costs: No Excessive Wage Restraint in Germany
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No Excessive Wage Restraint in Germany
Christoph Schröder IW-Trends No. 4 19. January 2017

An International Comparison of Unit Labour Costs: No Excessive Wage Restraint in Germany

IW-Trends

German Economic Institute (IW) German Economic Institute (IW)

Unit labour costs in German manufacturing are still high. In 2015 average unit labour costs in selected countries were 11 per cent below the German level, while the Eurozone, with costs only 4 per cent lower than in Germany, had a more moderate advantage. Although the German productivity is above average, this is still not enough to compensate for high labour costs. From 1991 to 2015 – largely due to lower productivity growth – Germany’s unit labour cost position deteriorated slightly on a local currency basis relative both to the Eurozone and to the competition as a whole. Unit labour costs increased particularly steeply in the 1990s with the result that Germany introduced the euro to a struggling economy. From 1999 to 2007 German unit labour costs developed considerably more favourably than in other Eurozone countries. Since 2011, however, they have again risen more rapidly than in the Eurozone and than for the foreign competition as a whole, albeit the lower exchange rate for the euro since 2015 has brought German exporters some relief.

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No Excessive Wage Restraint in Germany
Christoph Schröder IW-Trends No. 4 19. January 2017

Christoph Schröder: Lohnstückkosten im internationalen Vergleich – Keine überzogene Lohnzurückhaltung in Deutschland

IW-Trends

German Economic Institute (IW) German Economic Institute (IW)

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The 9th IW Survey of Further Training

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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 ...

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