In 2012 unit labour costs in German industry increased by more than 4 per cent, making them 10 per cent higher than in 2007, the last year before the crisis. In 2012 foreign industry was 15 per cent less productive on average. Abroad, however, labour costs are also 19 per cent lower, giving Germany a high level of industrial unit labour costs. Overall, foreign countries have an advantage of 5 per cent lower unit labour costs – not least because they are almost one fifth lower in the USA. By contrast, unit labour costs in the member states of the European Union are almost 2 per cent higher, and over 3 per cent higher in the Eurozone. A long-term perspective shows that unit labour costs in both German and foreign industry are at present approximately as high as in the early 1990s. Neither the long- and short-term dynamics nor the current level of unit labour costs provide evidence of wage restraint having made German industry unduly competitive on price.
An International Comparison of Industrial Productivity and Unit Labour Costs
IW-Trends
German Economic Institute (IW)
Christoph Schröder: Produktivität und Lohnstückkosten der Industrie im internationalen Vergleich
IW-Trends
German Economic Institute (IW)
More on the topic
Pharmaceutical industry: Increasing pressure on the labor market
The shortage of skilled workers poses significant challenges for pharmaceutical companies in Germany and is expected to become increasingly problematic in the context of demographic changes. Concerning Germany's positioning in the international competition ...
IW
Industrial policy at the turn of the times
The current debate on industrial policy vacillates between the extreme positions of an orthodoxy of rejecting state action and a naive belief in the state's ability to control structural change.
IW