Labor costs across the European Union (EU) saw a notable increase in 2024, reaching an average of €33.5 per hour, according to the latest data from Eurostat.
In the eurozone, the average labor cost was even higher, standing at €37.3 per hour. This marks a rise from 2023, when EU labor costs were recorded at €31.9 per hour and eurozone costs at €35.7 per hour.
The disparities in labor costs across the bloc remain stark, with Bulgaria maintaining the lowest labor costs in the EU at just €10.6 per hour. Romania followed closely behind at €12.5 per hour, while Hungary recorded an average of €14.1 per hour.
Conversely, Luxembourg topped the ranking with the highest labor costs in the EU, reaching €55.2 per hour. Denmark followed at €50.1 per hour, with Belgium rounding out the top three at €48.2 per hour.
Eurostat’s breakdown of labor costs indicates that they consist of wages and salaries as well as “accompanying costs,” which include employer contributions to social security, pensions, and healthcare.
In 2024, accompanying costs accounted for 24.7% of total labor costs in the EU, while the figure was slightly higher in the eurozone at 25.5%.
Among economic sectors, labor costs were highest in industry, averaging €33.9 per hour in the EU and €39.8 in the eurozone.
The construction sector had lower labor costs, standing at €30 per hour in the EU and €33.4 in the eurozone. Meanwhile, the services sector reported labor costs of €33.3 per hour in the EU and €36.4 in the eurozone.
Despite the overall upward trend, the pace of labor cost increases varied widely across member states.
The largest year-on-year increases were observed in Croatia and Romania, both of which recorded a 14.2% rise in labor costs. Bulgaria also experienced a significant surge of 13.9%, followed by Hungary at 13.6% and Poland at 12.8%.
At the other end of the spectrum, Belgium saw the smallest increase in labor costs at just 2.4%. Luxembourg and Finland followed with minimal increases of 2.1% and 1.8%, respectively.
Bulgaria, despite having the lowest labor costs in the EU, saw enough of an increase in 2024 to move up one position in the ranking. This shift comes after the country recorded a 14% rise in labor costs in 2023.
The rise in labor costs across Europe reflects broader economic trends, including inflationary pressures, wage growth, and structural changes in the labor market.
While higher labor costs can improve living standards and economic output, they also pose challenges for businesses that must balance competitiveness with increasing wage expenses.
As labor costs continue to rise, policymakers and employers will need to navigate the implications for employment, investment, and economic growth across the European Union.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members