Downward trend in labour costs

Figures from Spain’s latest Quarterly Survey on Labour Costs have been released by the National Institute of Statistics (INE). The data show that labour costs have continued to fall in the second quarter of 2013, a trend begun in the second quarter of 2012. The figures also reveal significant differences in labour costs between different sectors and regions. Recent labour reforms mean some Spanish workers have accepted wage reductions in exchange for assurances of job security.

New figures

The results of Spain’s latest Quarterly Survey on Labour Costs (in Spanish) have been released. The Spanish National Institute of Statistics (INE) published the figures for the second quarter of 2013 in September.

According to the figures (in Spanish, 101 KB PDF), the average total gross monthly labour cost per worker for a Spanish employer was €2,583.24 in the second quarter of the year. This figure includes €1,928.72 in salary costs, made up of basic salary, allowances, overtime payments, and supplementary and late payments. The other €654.52 is made up of other costs, such as compulsory contributions to the Spanish social security system and severance pay.

Sectoral variations

Total labour costs differ significantly between economic sectors. The highest total monthly labour costs are for ‘manufacturing and other industry’ at €3,041.06 per worker. Next highest is the construction sector at €2,840.08, followed by ‘services’, at €2,475.84.

At subsector level, the highest total labour costs can be found in the energy supply industry and in financial services, with monthly rates of €6,514.78 and €4,509.76 per worker respectively.

The lowest labour costs are for administrative/support services (€1,736.41) and the hotel, restaurant and catering (HORECA) sector (€1,507.56).

Regional variations

Significant differences can be also seen between Spain’s regions. Those with the highest total monthly labour costs per worker are Madrid, the Basque region and Catalonia – €3,020.03, €2,957.24 and €2,782.28 respectively. The three regions with the lowest labour costs are Cantabria (€2,261.58 per worker per month), the Canary Islands (€2,164.60) and Extremadura (€2,133.81). The range of these regional differences is strikingly wide.

Downward trend

Total Spanish labour costs in the second quarter of 2013 dropped by 0.3% compared with the same period of 2012. Salaries decreased by 0.6%, while non-salary labour costs increased by 0.4%. This can be explained by the 0.5% increase in the compulsory social security contributions.

The figures confirm a continuation of decreasing Spanish total labour costs which began in the second quarter of 2012. Figure 1 shows the progressive long-term evolution of this decrease since 2008.

Figure 1: Rise and fall of total labour costs per worker, 2008–2013 (%)

Rise and fall of total labour costs per worker (%)

Source: INE, Quarterly Survey on Labour Costs

Commentary

The latest data from INE for the second quarter of 2013 confirm the downward trend in total labour costs. The situation is likely to have been influenced by the Labour Reform (1 KB PDF) passed in Spain in February 2012 (ES1202021I) which gives priority to the salary conditions agreed at enterprise level over those agreed at sector level. As a result, given the difficult economic context, many workers in Spain have accepted a reduction in salary in exchange for assurances of employment stability.

Iñigo Isusi, Ikei Research and Consultancy

Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Dodaj komentarz