Labour costs in Germany increased markedly in 2011. According to information from the Cologne Institute for Economic Research (iw), an employer in the former West Germany had to spend an average of €59,500 for a full time employee last year. This is 4.9 per cent more than in 2010. In the former East Germany the same employee cost an average of €39,170 – or 3.8 per cent more than in 2010. However, according to the Institute this marked increase had to be seen in connection with the crisis year of 2009, when industrial labour costs fell for the first time – due to the shortening of paid working time, working off accumulated overtime and short time working. In 2011 working time was roughly at the pre-crisis level again.

The increase in 2011 relates to higher special payments as a direct result of good economic growth. Christmas and holiday bonuses, anniversary payments and similar bonuses increased by 13 per cent per employee in Western Germany; wages and salaries by 4.7 per cent.