Luxembourg blue collar labour costs lag that of neighbours

Yet overall hourly labour cost is second-highest in EU.

Employing industry and construction workers in Luxembourg costs less per hour than in neighbouring countries, even if the average hourly labour cost in the country is the second-highest in the European Union.

At €39 per hour, the average expenditure borne by employers for employing staff puts Luxembourg only behind Denmark, and – outside the EU – behind Norway as well, numbers for 2016 from Luxembourg’s statistics bureau STATEC showed on Tuesday.

But in the construction sector, the cost is only €26 per hour, below Luxembourg’s three neighbours France, Germany and Belgium. The same is true for the industrial sector, where it stands at €34 per hour.

The average cost in the EU – calculated as the sum of all labour costs divided by the number of hours worked – is €26 per hour worked, and €30 euros in the euro area, the numbers also showed.

Luxembourg’s economy is dominated by more expensive sectors, such as financial and insurance services, where the hourly cost is €71 and healthcare, where it stands at €39, far exceeding its neighbours.

Costs also exceed those of its three neighbours in the transport sector, where the hourly expenditure is €35. 

The public sector, one of the largest employers in Luxembourg, agriculture and apprenticeships are excluded from the cost calculation.

Growth in Luxembourg’s hourly average labour costs for the years 2012-2016 at 2.3% per year also far exceeds the EU average of 1.5% and the eurozone average of 0.9%.

This is mainly due to high growth in sector such as the financial sector and administrative and support services.

Last week, Eurostat also reported that Luxembourg’s workforce benefits from the highest hourly rate of compensation of any region in the European Union, alongside Brussels.

Luxembourg came out on top of the ranking, with workers clocking up €44 an hour of pay and benefits in 2016, the same as in Brussels.