German wage hikes lowest in Europe

(BERLIN) - Wages have risen less in Germany in the past 10 years than anywhere else in the European Union, the national statistics office said Wednesday, a trend that irritates some neighbouring countries.

Gross wages in the first quarter of 2010 were 21.8 percent higher on average than in 2000, while other labour costs were 18.9 percent greater, the Destatis office said.

It was the lowest rate of 21 countries for which Destatis published data.

The European Union posted an average wage increase of 35.5 percent over the same period, and a rise of 36.1 percent in labour costs such as contributions to unemployment funds.

Data from Belgium, Finland and Ireland were not provided, while figures from Denmark, Greece and Italy remained confidential but were used to calculate the EU average, Destatis said.

Wage moderation has helped Germany remain the biggest European economy and has contributed to strong growth seen in the first half of 2010.

Less competitive countries such as France have complained that German wage constraint undermines consumption and say Germany relies too heavily on exports to keep its economic engine humming along.

French salaries have risen by an average of 30.5 percent since 2000, while non-wage costs have gained 39.1 percent, the data showed.

German salaries are established by each branch following negotiations between bosses and worker representatives, and there is no generalised minimum wage in the country.