Hourly labour costs in Malta in 2014 were estimated at €12.3 per hour, according to a Eurostat release last week.

This is €0.2 up on 2013, a 1.9% increase, but it still leaves the Hourly labour costs in Malta among the lowest in the EU, surpassed by countries like Greece, Spain and Cyprus.

In fact, only in Estonia, Slovakia, the Czech Republic, Croatia, Poland, Hungary, Latvia, Lithuania, Romania and Bulgaria are wages lower.

It may be consoling to get to know that Malta’s hourly wage increased whereas those in Cyprus (-2.8%), Portugal (-0.8%) and Ireland (-0.2%) decreased.

Labour costs are made up of wages & salaries and non-wage costs such as employers' social contributions. The share of non-wage costs in the whole economy was 24.4% in the EU and 26.1% in the euro area, with the lowest in Malta (6.9%) and Denmark (13.1%) and the highest in Sweden (31.6%) and France (33.1%).

Between 2013 and 2014, hourly labour costs in the whole economy expressed in euro rose by 1.4% in the EU and by 1.1% in the euro area so this means that labour costs in Malta rose by more than the EU’s average.

But the overall impression one gets is that it will take far more efforts to get Malta’s hourly labour costs up the EU scale.

In fact, from the date of Malta’s accession to the EU (2004) hourly labour costs rose just from €9.6 per hour to €12.3 per hour whereas those in comparable countries rose far more.

For instance hourly labour costs in Slovenia were €11.2 in 2004 but they rose to €15.6 by 2014, while those in Portugal were €11.3 in 2004 but rose to €13.1 by 2014, after decreasing from €13.2 in 2013.

The EA-18 average hourly labour cost was estimated at €29.2 in 2014, and the EU average at €24.6, so Malta is still significantly below the EU-18 and also the EU average.