Great differences in the cost of the hour of work between EU countries

In 2017, the average cost of an hour of work in the European Union (EU) -excluding agriculture and public administration- was 26.8 euros, according to the latest data provided by the European statistical office, Eurostat. In the case of the euro area countries, the average cost was slightly higher, standing at 30.3 euros.

However, what is most striking about Eurostat's analysis are the enormous differences that exist between the EU member countries in this matter. Thus, the lowest average labor cost was in Bulgaria (4.9 euros per hour), Romania (6.3 euros), Lithuania (8 euros), Latvia (8.1 euros), Hungary (9.1 euros) and Poland (9.4 euros). At the other extreme, in the high range, are Denmark (with an average cost per hour of work of 42.5 euros), Luxembourg (37.6 euros), Sweden (36.6 euros) and France (36 euros).

In Spain, the average cost last year was 21.2 euros, just over four euros below the EU average and 9.1 euros less than the average of the euro area countries.

The average cost of an hour of work increased by 2.3% in the EU as a whole and by 1.9% in the euro area in 2017. The most significant increases in the euro area occurred in the three Baltic countries: Lithuania (+9%), Estonia (+7.4%) and Latvia (+7%). Outside the euro area, in Romania the labor cost grew even more (+17.1%), and the increase in Bulgaria (+12%) was also remarkable. The only European country where labor cost decreased was Finland, with a drop of 1.5%.

The following graphs show the ranking of labor cost per hour in different European countries in 2017 and the evolution of each country in the period 2004-2017.

By sectors, the average labor cost in the industrial sector was 27.4 euros in the EU as a whole and 33.4 euros in the euro area. In services, it was 26.6 and 29.3 euros respectively, while in the construction sector it stood at 23.7 euros in the EU and 26.7 euros in the euro area.