Real Hourly Wages in Europe
A follow-up on a post from last month; I managed to replicate the data on House of Commons research on changes in real hourly wages across Europe. What I wanted to check is whether the UK is an outlier in terms of hours worked.
The research commissioned by Labour looks at changes between 2010Q2 and 2012Q4, so I’ve done the same. The Eurostat data I’m using has had one quarter of revisions since the HoC report was written, so the results have minor differences; Germany has real wages growing +2% over this period rather than the cited +2.7%.
Real hourly wages are found using nominal hourly labour costs from the Labour Cost Index series, and deflated using the all-items HICP. This isn’t necessarily the best definition of real hourly wages; using the GDP deflator might be more interesting, but I’ve stuck with the HICP.
The table below compares the change in real hourly wages and the change in actual hours worked from the quarterly national accounts, between 2010Q2 and 2012Q4. It is sorted by the change in real wages, and I’ve included only countries with population >1m, sorry Malta et al, you are just not that interesting. The averages for the EU27 and Eurozone are also included. All figures non-annualized.
|Country||Change in real
|Change in total
|European Union (27 countries)||-1.9||-0.3|
|Euro area (17 countries)||-1.5||-0.7|
What does this say? The most astonishing aspect is surely the collapse of hours worked in Greece, Portugal and Spain. Remember this data looks at just an 18 month period, and yet hours worked fell nearly 17% in Greece.
Against all that, the UK does look like something of an outlier. In this group, of countries with falling real hourly wages, only the UK and the Netherlands had rising hours worked. The UK in fact has the fourth highest rise in total hours worked of the group, after Estonia, Germany and Hungary.