The Structure of Labour Costs in the German Economy

Having already risen considerably in 2010, labour costs per full-time employee in manufacturing industry increased again substantially in 2011, climbing in western Germany by 4.9 per cent to 59,500 euro and in eastern Germany by 3.8 per cent to 39,170 euro. This significant increase needs to be viewed in the context of the crisis year 2009, when for the first time there was a fall in industrial labour costs. This was the consequence of a drop in paid working time due to overtime reduction and short-time work. In 2011 working hours more or less regained their pre-crisis level. The breakdown of costs has also normalised. On the one hand, the employers’ residual costs from short-time work have disappeared again. On the other, special payments, which were substantially reduced during the economic crisis, have increased perceptibly. Services, transport and distributive trades have shown themselves to have the lowest labour costs, at 42,930 euro and 44,120 euro respectively. By contrast, the cost levels for banking and insurance (76,290 euro) and professional, scientific and technical services (64,120 euro) were significantly higher than in manufacturing.