High labor costs a threat to competitiveness? Economists give the all-clear

Berlin Higher wage agreements than in a long time and rising social security contributions – the price of work is causing unrest in the economy. In the latest economic survey by the German Chamber of Industry and Commerce (DIHK), 53 percent of companies named high labor costs as a business risk – more than ever before.

“Labor costs have always played an important role in personnel-intensive service areas such as gastronomy, cleaning services or transport companies,” says Ilja Nothnagel, member of the DIHK main management. What is new is that concerns about rising labor costs are now mentioned as a risk more frequently than in any previous DIHK survey, even among industrial companies.

But does the rising price of labor really threaten the competitiveness of the economy? Is Germany alone with the problem? And what role do crises like the corona pandemic and the Ukraine war play?