West German industrial companies had to spend 27.87 Euros per labour hour in 2005. Only in Norway (29.45 Euros) and Denmark (28.33 Euros) industrial labour cost were still higher. On the other hand, the major competitors on the world market such as Italy, Japan, the United States, Great Britain and France only had to pay between about 18 and 21 Euros per working hour in wages and social benefits. East German companies in the processing industry incurred 17.37 Euros per labour hour thereby at least presenting a cost advantage of about one third as compared to companies in West Germany.
Such are the findings presented by Mr Christoph Schröder in the 3/2006 “IW-Trends” journal on empirical economic research which is published every three months.
Schröder continues: It is true that labour costs in Germany rose only by 1 percent in 2005, whereas they increased by 3 percent in competitors´ countries. Nevertheless an industrial labour hour in West Germany is still more than 34 percent more expensive than the average cost of other industrialized countries. This disadvantage will hardly be smaller, if one includes the suppliers of the processing industry into the calculation. Taking into account this intermediate input combine, labour costs in Germany amount to 25.60 Euros per hour and are only 3.6 percent below those in the industry as a whole. 