This Sunday it becomes more expensive to employ people, what about in the EU?

If we rejoin the EU it could be even worse – latest EU data on Friday is not pretty

Montage © Facts4EU.Org 2024

As usual, the facts raise questions about why anyone wants to rejoin such persistent EU hypocrisy

On Sunday, Labour’s new tax regime for employing a person in the UK means employers will be facing an increase in the National Insurance Contributions (NICs) they pay on the wages of each person. This may be a decision deplored by all those who wish see far better economic growth than the UK is now experiencing, but at least it is a decision that can be made by the elected government of the people.

In the EU the trend has been firmly in the direction of harmonising such measures. Whilst this has not yet been achieved in the EU equivalent of National Insurance, it is clear this is the direction of travel. The evidence for this is in the Withdrawal Agreement which the EU imposed on the UK on its effective departure from the bloc on 31 December 2020, at the end of the ‘Transition Period’. In the course of the negotiations the EU tried to insist the UK could not diverge from its so-called ‘Level Playing Field’ – particularly in the area of employment.

The position on labour costs in the EU

The latest figures released on Friday afternoon (28 Mar 2025) by the EU Commission’s official statistics agency show the cost of employment across all 27 member countries. Not only do they show the huge disparity in average hourly wages between these member countries, they also reveal the extra labour cost per hour after stripping out the wages element.

Reminder of EU’s vitriolic negotiations with UK and EU's famous, illusory ‘level playing field’

At the beginning of the UK withdrawal process the EU set out with negotiating demands so absurd they were hard to tell apart from the demands of full EU membership which the UK was supposed to be leaving.

The EU’s insistence on the UK maintaining a ‘level playing field’ involved areas such as labour and social standards, competition and trade, state subsidies, nationalised industries, tax policy, environmental measures, and of course climate change.

Much of the talk was around the subject of ‘dynamic alignment’, which essentially meant keeping in lock-step. As a result of the EU’s stances, the compromise agreement - when eventually reached - favoured the EU. Certainly there is no remotely similar international agreement anywhere else in the World.

Remember the ‘level playing field’ pushed on the UK? The EU27 still can’t play on it themselves

Friday’s news – on the fundamental ‘playing field’ of labour costs – proved yet again that the EU cannot even maintain a level playing field on this core component of a business’s cost-base. We looked first at the total of those elements of the average labour cost per hour after stripping out the wage paid to the employee

France is costliest for the part of labour cost which never reaches the employee

Here, the disparity between the averages for different EU countries leaves the realms of ‘gaping divide’ (see the section on total labour costs per hour below) and stretches into a ‘yawning chasm’. To reiterate, this is the part of overall labour costs per hour which is the non-wage element.

This part costs a scarcely credible 23 times more in France (€14.00/hr) than it does in Romania (€0.60/hr). This very clearly shows up what is always said about France. Its economy is burdened with excessive payments for its bloated social state, which goes some way to explaining why France – the No.2 economy in the EU - is in increasing difficulties with its current deficit and therefore with the financial markets.

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The EU’s playing field is still at such a steep angle some of the EU27 might fall off the end

As the EU itself says, “The average hourly labour costs mask significant gaps between EU countries.” With the cost in Luxembourg 5.2 times as much as in Bulgaria, the ‘gap’ might be described as a gaping divide rather than as ‘significant’.

Taking the EU27 overall, as one entity, the average total hourly labour cost works out at €31.80 per hour. That said, given the massive disparities between the 27 EU countries, an average is meaningless. It is obvious at a glance that when it comes to ‘labour and social standards’, the EU has no such thing as a ‘level playing field’.

And visibly Emperor Macron can be said to be wearing no clothes.

[ Sources: EU Commission official statistics agency, Eurostat ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, Mon 31 Mar 2025

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