Another significant rise in labor costs in Germany
The labor costs in Germany have again significantly increased in the previous year, although not as much as in 2022. The reason for this was mainly higher wages due to rising costs for energy and food, as the Institute for Macroeconomics and Business Cycle Research (IMK) of the Hans-Böckler Foundation announced on Tuesday. Labor costs per hour in the private sector in Germany were 41.90 Euro in 2023 according to IMK. This was an increase of 5.0 percent compared to the previous year and a "relatively high value" in the long-term comparison. In the EU, labor costs on average increased by 5.6 percent, in the Eurozone by 5.1 percent. To labor costs belong, besides the gross wage, employer contributions to social security, expenses for further training, and taxes that are considered labor costs.
Labor costs per employee increased by 6.6 percent forcefully and more than in the Eurozone (6.1 percent). A significant reason for this, according to IMK, was not only inflation but also the weak development in production. Labor costs relate to labor costs in the ratio to the productivity progress.
"Without significant increases in nominal wages, the record inflation in 2022 and 2023 would have severely damaged purchasing power in Germany for a longer period," said Sebastian Dullien, scientific director of the IMK. The increased labor costs showed that the room for maneuver for stabilizing purchasing power in the crisis had been used without "creating imbalances at other locations."
In 2023, Germany experienced an increase in labor costs per hour in the private sector, reaching 41.90 Euro, a 5.0% rise from the previous year. This trend was observed despite higher labor costs being more pronounced in 2022 within Germany, specifically in Europe and the Eurozone.
