Non-wage labour costs

Wage labor costs is the name of the official German statistics for the indirect labor costs. The German official statistics used since 2004, Eurostat and the International Labour Organization ( ILO) common structure in gross wages and salaries on the one hand (direct labor costs ) and non-wage labor costs on the other (indirect labor costs ) to.

The concept

Non-wage labor costs include the cost elements:

• Employers' social contributions, including Statutory employer contributions to social security
• Wage and Salary payments
• Imputed social contributions for pensions and health care officials
• Employers' social contributions for apprentices
• Other voluntary social benefits, including: Grants the employer for sick pay
• Aid for the costs of medical services and treatments
• Dentures

• Recruitment costs
• Provided by the employer workwear
• Moving expense reimbursements
• Establishment support in settings

Classification of non-wage labor costs

Depending on your perspective employer contributions to social security of employees either as an additional gross income or seen as earmarked deduction from actually reasonable income. History applies to the second view. Social security was introduced to use inevitably become wage increases partially mandatory to protect against individual life risks.

The non-wage labor costs is, of course, compared to a benefit. Because the need for social insurance risks remain after elimination of employer contributions (or the total social security contributions ) are made, that is, a worker would have even after elimination of non-wage labor costs expend costs for the general risks of life.

Although a reduction in non-wage labor costs leads to a higher demand for labor and in the wider definition ( including the employee 's social security contributions ) to an increase in disposable net wages of workers. However, this does not necessarily lead to a revival of the economy and an increase in employment, because the contributions of employees and employers are also effective demand (eg as expenditure in the health sector, in nursing, as consumption expenditure of pensioners, etc. ). If the reduction of non-wage costs is associated with a reduction in social benefits ( pension, health insurance benefits and so on ), the aggregate demand may even fall.

Additional personnel costs

The contractor near the German Economic Institute speaks not of non-wage labor costs, but of additional personnel costs. In the definitions it relies on statistics from Eurostat. Accordingly, the labor costs per hour worked are composed of the direct hourly wage ( "direct pay" ) and the additional personnel costs. The direct wage, ie the so-called direct pay, consists of remuneration for work done, including overtime pay, shift differentials and premiums paid regularly.

The labor costs are made up of the other direct costs that are included in annual earnings and indirect costs together. The direct labor costs include, inter alia, the remuneration for non-working days (holidays and bank holidays), special payments (eg Christmas bonuses ), other cash grants and in kind.

Indirect labor costs, employers' contributions to social security, the continued payment of wages in case of illness, other expenses of a social nature and the cost of vocational training are referred to.

Situation in Germany

In Germany, wage labor costs are below the EU average. Among the non-wage labor costs in Germany include the following attributable to the employer's contributions:

The contributions fall to be shared on up to the respective income thresholds.

The employer's contribution lies around 21 % of gross salary of the employee if the salary does not exceed the income thresholds. For the portion of gross salary that exceeds the income threshold, there are no social security contributions.

The contribution rate to be determined by the federal government for all branches since January 1, 2009; the contribution to the health of the cash previously depended, chosen by the workers. The employee continues to bear 20.625 % of his gross salary in social security. In the long term care insurance to pay without children from the age of 23 is a surcharge of 0.25%. In Saxony, the contributory persons pay 1.475 % (1.95 %: 2 0.5 % ) of the contributory salary (up to the contribution ceiling). In addition, if necessary, even the mentioned supplement for those without children. Employers in Saxony pay for financial relief in place of the still existing holiday accordingly 0.475 % ( 1.95% 2 - 0.5%) of the contributing duty pay.

The social security contributions represent a liability insurance and can not be excluded by agreement between employer and employee, provided that a insurable employment relationship. The contribution of the employee will be withheld from wages. Both the employee's and the employer's share of the total social security contribution will be forwarded by the employer on a monthly basis to the relevant collecting agency ( health insurance ). The collecting agency distributes the total social security contribution on the individual social support.

The accident insurance contribution paid by the employer directly to the responsible insurer. This is a professional association in general.

Are in the image - as a share of GNI - the very bottom to the workers remaining net wages and salaries ( dark blue) depicted above are the so-called 'actual social contributions of workers, then about the actual social contributions. Together with the payroll taxes results in compensation of employees. Non-wage labor costs are therefore only part of the labor costs, which are represented by the compensation of employees.

Measures to reduce social costs in Germany

For the employer, provide non-wage labor costs a financial burden dar. employers' organizations criticize that these costs increase the cost of employment. For this reason, employers' organizations, market- liberal politicians and employer-friendly interest groups use erroneously the term "non-wage costs."

According to calculations by the German Federal Ministry of Health, the proportions of employers in the financing of social benefits by 39.1% have fallen to 33.7 % in the period from 1991 to 2003.

To ask the unemployed even more, the so-called Hartz concept was created and implemented inter alia, in the context of Agenda 2010, the red - green government ( in modified form ). It causes low-wage jobs, a reduction of social security contributions. For the instruments Minijob and Midi job created, which come next to the regular employment relationship. At the same time in 2010 further parts of the previously discharged as an employer and employee contributions social security costs were charged to the net income of the employee by the agenda, and cut on the expenditure side pension payments, health insurance benefits and unemployment benefits.

Critics fear that full-time jobs would be replaced by cheaper jobs by this action and no new jobs would arise, so that the social security system is weakened by loss of revenue further. The Hartz concept is based on a microeconomic point of view, the fade the macroeconomic impact.

You to consider that wage replacement benefits to support demand in times of economic weakness, they meet consequently, apart from ethical ( collective protection of life risks ) also economically meaningful tasks critic of the fixation on the level of non-wage labor costs. This Keynesian view criticizes you, they do not take into account the long-term development. However, it is noted that there is a constant demand weakening, the inside looks to the future development. In contrast, the assessment of those economists who generally assume a stability of the market system and the claim that the current unemployment rate is not based on a demand problem. Nor were the non-wage the decisive factor, but unit labor costs and unit profits. This would give information on the productivity and competitiveness of an economy.

Situation in Switzerland

Non-wage labor costs in Switzerland share currently as follows:

The applied by the employer wage costs are thus depending on the industry and age of employees between approximately 7.7% and 16.2%. Approximately the same proportion will be deducted from the gross salary to the employee. Because there is no income threshold as in Germany for the AHV, the percentage of social security at low wages are not higher than at higher wages, if the per capita premium of statutory health insurance not included borne by the worker himself. In addition, the contribution rates in Switzerland are lower and more stable than in Germany.

Wage labor costs compared to other European

Wage costs in 2010 relative to the gross wage as a percentage. Used the narrow definition (indirect costs incurred by the employer in addition to the gross wage paid to the workers' ). Source: Federal Statistical Office of Germany

* Value refers to the year 2009. Source: calculations by Destatis based on Eurostat online database of 24 March 2011