Cost of Labor Increased By 2.2 Percent in Euro-Area, Data Reveals



The European Central Bank in Frankfurt

The cost of labor was increased by 2.2 percent in Euro-area during the second quarter of 2018, according to data published by Eurostat.

This didn’t happen due to higher wages but mainly because of the increase in taxation of labor.

Across the Euro-area, wages increased by 1.9 percent and non-wage cost increased by 2.9 percent. This includes social security and taxation.

During the first quarter of 2018, the figures were pretty much the same: wages increased by 2.8 percent and taxation and social security by 2.8 percent.

If we don’t consider the increase in wages, this is the highest increase in labor cost since 2012.

Greece came in with an average increase of 5 percent.

The countries with higher increases than Greece were Romania with 15.9 percent, Latvia with 11.7 percent, Hungary with 10.2 percent, Lithuania with 9.8 percent and Slovakia with 7.9 percent.

The lowest percentage increase was found in Luxembourg with 0.6 percent and Spain with 0.7 percent.

The European Central Bank projects an inflation rate of 1.7 percent across the Euro-area.