Increase in wage costs slowing down

08/12/2003 10:00

Wage costs per labour-year rose by 3.3 percent in the third quarter of this year. This is the smallest increase since 1997.

Smaller wage cost increase in 2003

Companies and institutions paid nearly 56 billion euro in wage costs in the third quarter of 2003, 2.1 percent more than in the third quarter of 2002. In the period 2001–2002 (third quarter) wage costs increased by as much as 5 percent.

With the loss of jobs (labour-years) the average wage costs per labour-year have risen more quickly. The average wage costs per full-time job, nearly 9.8 thousand per quarter, were 3.3 percent higher in the third quarter of 2003 than twelve months previously. In the third quarter of 2002 they were 4.8 percent higher than twelve months before.

Average wage costs per labour year by sector, 2002 and 2003

Average wage costs per labour year by sector, 2002 and 2003

Largest increase in non-commercial services

The increase in wage costs per labour year was smaller in all sectors in the third quarter of 2003 than twelve months previously. The smallest increase was in agriculture and fishery and in commercial services. The largest increase was in non-commercial services. The latter sector has the highest wage costs per full-time job, namely more than 10 thousand euro per quarter. Agriculture and fishery has the lowest wage costs per labour-year.

Quarterly pattern

The wage costs graph has a specific quarterly pattern, with peaks in the second and fourth quarters. The high wage costs in the second quarter are connected with the payment of holiday allowances on top of regular wages. The smaller increase in the fourth quarter is caused by the payment of end-of-year bonuses, although not all employees receive these. In the second quarter of 2003 the wage costs per labour-year were nearly 23 percent higher than in the third quarter.

Average wage costs per labour-year by sector, 1995–2003

Average wage costs per labour-year by sector, 1995–2003

Hans Terpstra

Source: StatLine (Dutch only)