Malta’s labour costs have gone up by €2.7 an hour in the 10 years since EU accession.

In 2004, Malta had the 11th cheapest labour costs per hour (€9.6), with Bulgaria having the lowest at €1.6, compared with the EU average at the time of €19.8.

By 2014, almost all the countries with lower costs had seen them increase, with Malta remaining in 11th place and Bulgaria still the lowest at €3.8. However, the EU average had increased by €4.8.

Since Malta joined the eurozone in 2008, its labour costs went up by €0.9, from €11.4 to €12.3, while the eurozone average went up €3.7.

When analysed by sector, Malta’s labour costs for the business economy were less than half the EU average, at €11.8 compared with €24.5. While costs were just 46 per cent of the EU average in industry and 44 per cent of those for construction, they were 50 per cent for the services sector and 57 per cent for the non-business sector, a category which excludes government and includes mostly education, health and social work, arts, entertainment and recreation.

Malta has the lowest share of non-wage costs in the EU, according to the report on labour costs issued by Eurostat. Non-wage costs are mostly made up of employers’ social contributions.

The share of non-wage costs in the whole economy was 24.4 per cent in the EU and 26.1 per cent in the eurozone, with the lowest in Malta (6.9 per cent) and the highest in France (33.1 per cent).

In 2014, average hourly labour costs in the whole economy (excluding agriculture and public administration) were estimated to be €24.6 in the EU and €29.2 in the eurozone.

However, this average masks significant gaps between EU member states, with the lowest hourly labour costs recorded in Bulgaria (€3.8) and the highest in Denmark (€40.3).

There were actually decreases in hourly labour costs between 2013 and 2014 in Cyprus, Portugal, Croatia and Ireland. Malta saw the hourly labour cost rise by €0.2.