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DIHK warns of disadvantages due to high labor costs
Germany's high labor costs pose a location disadvantage - new figures reveal the challenges for companies. Experts warn of the effects.
DIHK warns of disadvantages due to high labor costs
Germany's high labor costs are becoming a serious disadvantage for companies compared to other European countries. Last year, companies in the manufacturing and service sectors in Germany paid an average of 41.30 euros per hour worked, which is the sixth highest value among the 27 EU member states. This number is around 30 percent above the EU average of 31.80 euros. However, the increase in labor costs in Germany, at 4.8 percent, was lower than the EU average of 5.3 percent.
According to Volker Treier from the German Chamber of Industry and Commerce (DIHK), the high labor costs are becoming a clear location disadvantage for Germany. Companies see labor costs as a business risk, and many are planning to invest abroad to save costs. The shortage of skilled workers, inflation rates and high tax burdens have contributed to an increase in wages, which has made the situation more difficult. The DIHK warns of the negative effects that this development could have on Germany's competitiveness and calls for the framework conditions for companies to be improved.
The Institute for Macroeconomics and Business Cycle Research (IMK), on the other hand, assesses Germany's competitive position in terms of labor costs as relatively stable compared to the previous year. Nevertheless, a slower increase in labor costs is expected for the current year, both in Germany and in other EU countries. This could not lead to a significant change in Germany's competitive position.
Particularly in the manufacturing sector in Germany, which faces strong international competition, labor costs amount to 46.00 euros per hour, which is 44 percent above the EU average. For private service providers, German labor costs are 39.80 euros per hour, around 25 percent above the EU average. Labor costs consist of gross earnings and additional wage costs, with various factors such as social contributions, training costs and taxes influencing the total costs. The discussion about the effects of high labor costs on Germany's competitiveness therefore remains the focus of economic experts.