Ah, the numbers! Alibis crumble one after the other.
The cost of labor in France is 36.6 euros and in Germany, it’s 34.6, a 2-euro difference (in 2012, it was 3.9 euros).
We were told for ages that the labor cost differential was the primary, if not exclusive, cause of Germany’s success compared to France, or, vice versa, France’s failure towards its powerful neighbor, and then when we look at the numbers, we realize that the difference is 5.7%, which, in terms of competition, is still not Everest!
In fact, if the French trade balance is largely in deficit and that of the German cousins strongly active, one should first analyze the CLUP, an acronym that means in English ‘the labor cost per unit produced’, which incorporates, in addition to salary and charges, skills, and productivity.
Innovation, the position of companies in the markets also play a role.
So, shouldn’t we rather focus on companies’ investment policies and the numerous blockages and delays in organization and functioning that influence the life of businesses?
In short, instead of constantly complaining, wouldn’t it be better to act in the right direction, that of reforms rather than defending obsolete achievements?
The hourly labor costs (excluding agriculture and public administration) in the European Union (EU) Member States ranged in 2017 from €4.9 in Bulgaria to €42.5 in Denmark.
The information delivered based on a study by Eurostat shows that France, with an hourly cost of €36, ranks fifth among the countries where labor cost proves to be the highest after Denmark, Belgium (€39.6), Luxembourg (€37.6), and Sweden (€36.6).
In industry, the average reached €27.4 in the EU and €33.4 in the eurozone compared to €26.6 and €29.3 in services.
Labor costs include wages and salaries as well as non-wage costs (France -32.8%- takes the lead among all the EU Member States).
Between 2016 and 2017, they increased by 2.3% in the EU and by 1.9% in the eurozone. The only decrease (-1.5%) in the eurozone was observed in Finland.
