"In Europe’s private-sector, the cost of labor—gross earnings plus employer-paid social contributions, pensions, disability, etc.—is marked by stunning differences."
"At the bottom of the spectrum is Bulgaria: the average private sector employee costs a company €3.70 per hour worked; in manufacturing even less, €2.90. Romania is right there at €4.50 and €3.80 respectively.
Near the top of the spectrum is Belgium at €40.40 and €41.90 per hour worked. But no one beats the Swedes: €41.90 and €43.80. Per hour worked, the average Swedish employee costs a manufacturer over 15 times more than an employee in Bulgaria."
"So, relocate all manufacturing plants from Sweden to Bulgaria? Or Romania? Even Greece would be a great place. The cost of labor there is only €14.70 per hour worked, about a third of what it costs up north. It’s the only country in the EU where the average cost of labor actually fell in 2012—and by 6.8%!"
Read more at http://www.nakedcapitalism.com/2013/03/wolf-richter-the-stunning-differences-in-european-costs-of-labor-or-why-competitiveness-is-a-beggar-thy-neighbor-strategy.html#OWcCOvKffIlpkrgg.99
So what about it? Is there likely to be a mass exodus of businesses from Sweden to Romania anytime soon? What's striking is that most of the countries higher on the list are the ones most people would rather live. As for companies, this chart also illustrates well why it's about more than low labor costs and why we have seen considerable "reshoring" over the last few years: the externalities that companies do get in many high wage countries more than make up for any rise in labor costs. Even if you can pay workers in Romania only one-tenth of in Sweden, does this big differential make up for the big drop in quality of things like the environment, an educated workforce, or the high levels of "social trust" many argue is present in Sweden?
No comments:
Post a Comment